Mkts may see 10-15% upside over six months: Dipan Mehta

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Dipan Mehta, Member, BSE & NSE said Infosys ' numbers were very impressive. The only negative was the de-growth in the top ten clients, he added.

Commenting on the markets, he said, the risk reward ratio was in favor of reward and while there could be a risk of about 4-5% correction, the upside could be 10-15% over a six month period.
Also read: See no positives for next 6 months: Dimensions Consulting
Here is a verbatim transcript of the exclusive interview with Dipan Mehta on CNBC-TV18. Also watch the accompanying video.

Q: Your take on the Infosys' numbers and are you a buyer at these levels and until what levels?

A: I think Infosys' numbers were very impressive. The key highlight according to us was the kind of a cost saving which they have managed despite lower utilization they were able to reduce the software development cost by 4.3%. I think part of the damage was also caused on account of tax. The fact that at the Earnings Before Tax (EBT) level they are able to maintain the profits despite appreciation of the rupee is quite impressive. The only negative fact was that the de-growth in the top ten clients. But I guess that is what the market and the environment is all about. So by and large extremely impressed with the numbers. Maybe not at these levels but certainly at declines Infosys would make sense to buy and if Infosys gives a bit of inclink of what is going to happen in the technology side then there are a whole host of midcap second line technology stocks which could be interesting, if this is the kind of performance that the industry can deliver for the current quarter.
Q: Unless I am emotionally attached to Infosys, is there any reason to buy it, is the stock reaching the top of the S-curve which is essentially the stock price which is not going to do your double jig etc, is there much more available in the market and should retail side of the market look at other things perhaps where there is about 100 or 50%, the next group of stocks to look at rather than Infosys, just in terms of returns because that's what we finally care about at the end of the day?

A: A stock like Infosys, Reliance or SBI for that matter is always a part of the core holding and usually in the top 3-4 in terms of percentage of holding in a portfolio. There are very few choices of stocks which one can put in the category of core holdings because they have to be largecap and that entire selection has to be slightly de-risked and more or less move in line with the market or the Sensex-Nifty atleast try and beat them if not at inline performance. So keeping that in mind I think there will be appetite for Infosys and there will be interest because this is not a stock which you buy in small quantity, in most portfolios you will find it as a very large proportion of it and keeping that in mind and the long term prospect the fact that this year we could have a flat performance. But then going forward as an when the US economy does improve, this is the company which can deliver 25% kind of profits.
Continued on next page ...