Feb 06, 2013, 10.42 PM IST | Source: CNBC-TV18

Midcaps may push Nifty; NTPC OFS for big investors: Experts

Sudarshan Sukhani, s2analytics.com, says that today there are indications that 5950 is holding. We saw an intraday dip but it bounced back, which indicates that support levels are holding. I think that maybe a three-day correction is over, but it will be confirmed if we move above 6000.

Sudarshan Sukhani, s2analytics.com, says that today there are indications that 5950 is holding. We saw an intraday dip but it bounced back, which indicates that support levels are holding. I think that maybe a three-day correction is over, but it will be confirmed if we move above 6000. Interestingly, some mid caps are slowly showing signs of life and that could be a precursor to Nifty rally.    

Meanwhile, Anand Tandon, CEO, JRG Securities, says that for very large institutional investor it maybe a good time to look at NTPC. The valuations are not particularly stretched at this moment and large stock will be available. Retail investor should remember that it a utility and it is likely to give utility like return.  

Soumendra Nath Lahiri, head - Equities, L&T Investment Management, says that today, we are in a mode where results have marginally outperformed our expectations. So to that extent, market will consolidate, given the fact that we have had a sharp run up post September when the first stage of reform started off.

Below is the edited transcript of his interview to CNBC-TV18.

Q: How have you read the sideways moves that we have seen in the market over the last three weeks?

Lahiri: Market over the last couple of months was running ahead of fundamentals. Expectations were down. Once numbers came through, we saw the first blip where some numbers were outperforming expectations. Today, we are in a mode where results have marginally outperformed our expectations. So to that extent, market will consolidate, given the fact that we have had a sharp run up post September when the first stage of reform started off.

Q: What is your assessment of how result season has panned out in the sense post the result season which are the stocks or sectors that you would be overweight on now and which are the ones that you would stay away from?

Lahiri: Results this quarter have been slightly better than expectations given the fact that the expectations were much lower. People had tempered down expectations given that growth has started coming off and most corporates were feeling the pressure of input cost hikes. So, to that extent, a number of 8.5-9 percent growth in earnings is reasonable and that is more or less in line with expectations.

Post results, sectors that have done well or have shown some positive surprise are sectors, which have underperformed earlier. The oil and gas space given the pace of reforms that has come through has been positive. Some of the software names have done well with better expectations of both volumes and margins coming through given that their end environment is seemingly improving.

We have seen some uptick in the media names, again there has been a structural shift with digitization coming through. So, there are pockets where there have been improvements.

Even in telecom space hopefully the competitive intensity is also coming off and we could see some up tick.

Q: You track cement space closely, some big numbers are expected tomorrow and this quarter has been quite lackluster both with respect to demand as well as cement prices, what do you expect to see tomorrow and are you a buyer in this space?

Lahiri: The demand has been lackluster through the last few months. So one needs to see how things pan out in the coming quarters given the fact that we have elections coming up. It is natural that spend for construction increases during these periods.

From valuation perspective, the mid-cap and small-cap cement offer more value for investors. So, at this point in time, given where the stock prices are of the larger-caps, one would be better of looking at the mid-cap and small-cap cement names.

One can't expect great numbers given the fact that most of these companies have seen sedate volumes and prices have also not moved up as demand has been sober in this period also adds to this point. Within the cement sector if one needs to look at it it would be better to look for more value in the small-cap and the mid-cap names.

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