SENSEX NIFTY
Dec 29, 2012, 04.05 PM IST | Source: CNBC-TV18

Mkt may peak in Jan, if fiscal cliff resolved: Baliga

Ambareesh Baliga, Independent Analyst believes resolution of the fiscal cliff issue will be a key for market to move up next week.

Ambareesh Baliga, Independent Analyst believes resolving the fiscal cliff issue will be a key for market to move up next week. In an interview to CNBC-TV18 he states, "If it is resolved then we will have an extremely good run from there and January should be extremely good. If not then we will have a small cut of possibly 100-150 points on Nifty."

Answering a query on whether diesel price hike would happen, he says, 'It is not a wishful thinking; I think they have to do it. They don’t have a choice. But one needs to see whether they can a rupee per month or higher. Because of that oil marketing companies (OMCs) may move up."

As a New Year shopping he recommends Greaves Cotton . The stock could go to Rs 120-125 in the next 8-9 months he says.

Below is the edited transcript of his interview on CNBC-TV18

Q: Next week is going to be all about the year-end bonhomie as we enter into the New Year etc. but overall it has been quite a positive run that we have seen in the last couple of days. Do you expect to see more follow through?

A: Hopefully yes because all of us live on hope. Next week the main thing is the fiscal cliff, and we need to see as to how that goes. If it is resolved then we will have an extremely good run from there and January should be extremely good. If not then we will have a small cut of possibly 100-150 points on Nifty. The peak could get delayed a bit but that would still happen towards the later part of January.

Q: Any thoughts on the oil and gas space? All this talk about a diesel price hike, in the staggered manner by the government, do you think it is just wishful thinking or is there some meat in that? Should one even venture into oil marketing companies (OMCs)?

A: It is not a wishful thinking; I think they have to do it. They don’t have a choice. But one needs to see whether they can a rupee per month or higher. Because of that OMCs may move up. From a trading point of view one can look at buying OMCs at this point of time. One could see an upside of possibly 5-6 percent.

Q: Any more stocks that one should be putting into their shopping bag as we start off in the New Year?

A: For the coming week my idea is Greaves Cotton, which is the largest manufacturer of diesel engines, the small variety. With the expected rise in demand for the small commercial vehicles (CVs), I clearly see this company doing decently well, going ahead over the next 2-3 years.

For FY13, I am looking at earnings per share (EPS) of Rs 6.5 and for FY14 about Rs 8-8.25. From that point of view I see this stock moving up from the current levels of about Rs 78-79 to about Rs 120-125 in the next 8-9 months.

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