Remain bullish on rate-sensitive sectors: Prime Sec

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 Prime Securitie BSE | NSE 25/05/12 Are Mutual Funds betting on Prime Securitie? Other Stocks in this news ICICI Bank | Container Corporation of India | Blue Dart Express | Aegis Logistics |

Inflation numbers released today for week ended Apri 5 are at 7.14%. Revised inflation for February 9 is at 4.98% versus 4.35%. The April 5 WPI (wholesale price index) for metals is up by 0.9%; for all commodities is up 0.3%.

Sonam Udasi, Head of Research of Prime Securities , said she continues to remain bullish on interest rates sensitives like certain realty and bank stocks. In the longer-term, business models of banks are too strong for interest rates cycles to affect them. She also sees lot of value in media stocks and in the logistics space.

Excerpts from CNBC-TV18's exclusive interview with Sonam Udasi:

Q: Lot of uncertainties around interest rates right now - what is your positioning on the interest rate sensitives - banks, real estate for now?

A: Longer-term, we continue to remain bullish on certain realty stocks and banks. Even if interest rates were to go up, CRR was to be hiked - it's already corrected quite a bit from hereon, even sentimentally short-term one may see a 5-10% blip, longer-term the business models are too strong for them even in higher interest rate cycle specially for banks; profitability keeps going up historically.

Q: Would you start buying them now or would you say you can wait for another 10% fall before picking them up?

A: If one looks at some banks like ICICI Bank or others they have been trading in this range, they have gone to Rs 750 come back to Rs 850 and so one cannot time; one has to keep a 1-1.5 year perspective and keep accumulating them. I see good value in them. 

Q: Do you see this market moving into a range for the better part of the earning season. They have been over the past few weeks as well. If so, what range are you watching out for?

A: Largely people are waiting for cues from a liquidity perspective. Last two weeks, data on FIIs has been encouraging. As more results come out and there is more clarity on where India Inc is headed. So far it's been pretty good. As there is more clarity on that, there should be more consolidation and more money flows coming in. That should take the market anyway higher. 

Q: What have you made of technologies and capital goods so far?

A: Technology is pretty interesting, but overall if one were to take a view all other sectors have corrected and if one were to take a 1.5-2 year call, I would be betting on other sectors where I see more value then technology.

Q: Such as?

A: We see a lot of value in media stocks - specific bottom up, lot of value in some realty stocks, lot of value in some private sector banks, lot of value in logistics space because logically all these sectors are growing at their own tandem. Historically, even if we were growing at 6-6.5% they have been able to tap 2-2.5% kind of growth. So I don't see a problem with that. 

Q: What do you recommend getting out of if people have to find money for new stocks?

A: Some of the stocks in the capital goods space historically have got good EV-EBITDA multiple, that needs to shrink a bit because you are putting in too much for forward numbers, some of the utility counters one may have to look at, but otherwise there is a lot of value overall on a bottom up space.

Q: What is your top pick in the logistics sector and why would you justify that pick?

A: We are very bullish on Container Corporation of India (CONCOR), Blue Dart and Aegis Logistic and from a returns perspective we are very bullish on Aegis. Our price target for it is around Rs 290-300

Q: What will be your pick from the financial pack?

A: From a risk reward perspective, I will pick ICICI Bank

Q: With regards to liquidity what is the retail sentiment at this point of time?

A: We don't deal with retail.