Talking about the fantastic round of earnings this quarter has seen, Sanju Verma of HDFC Securities discusses stocks and sectors that have out performed and underperformed.

She says that autos, as a sector, have been a mixed bag. She says that while Mahindra and Maruti have clearly show good results, the two-wheeler space has been a bit disappointing. However, she does classify Hero Honda and Bajaj as interesting long term picks.

Excerpts from CNBC-TV18’s exclusive interview with Sanju Verma:

Q: 13,000 plus- where do we go from here?

A: I think we are certainly headed to 14,000 plus levels if not more over the next couple of months. Reason being that I believe the US economy is not going to be a very big determining factor.

There are talks about hard landing or a soft landing depending on whether the US economy grows at 2.5-3% or lower than that. Irrespective of how the US economy does, I think the key thing to notice is that India is an asset class in itself. I think clients are increasingly getting convinced that one cannot look at the P/E of the Sensex or of the broader indices in isolation.

But I think if one were to look at this in conjunction with the kind of earnings momentum that the September quarter numbers have reflected, and the earnings momentum for some of the key heavy weights that are likely to continue going forward, then the P/E certainly doesn’t look over valued. The economic momentum also looks buoyant for a couple of years down the line.

Q: One word on earnings that have come out from the auto space and how are you reviewing the two-wheeler lot now?

A: I think the auto space has been a bit of a mixed bag. Mahindra and Mahindra have posted spectacular numbers and Maruti Udyog to a large extent has certainly not disappointed. The two-wheeler space clearly seems to have been weighed down by the steep fall in operating margins. However, I continue to believe that both Bajaj Auto and Hero Honda to some extent certainly look like interesting long-term picks.

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