See near-term resistance for Nifty at 5300: Religare Cap

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Tata MF, Angel Broking stock/sector portfolio must-haves Nifty upside capped at 5200-5250: Sharekhan Markets to be range-bound in 2010: BoA ML 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 29/05/12 Are Mutual Funds betting on Nifty?

Q: Chartically, the automobile sector or the automobile index is quite clearly the best performer index in the past year or so, but IT has not lagged behind much, what is your view on IT space especially about the majors?

A: We have been maintaining positive stance on IT for quite sometime. We think that the buoyancy in global discretionary IT spending is here to stay at least for next few quarters. Large Indian IT players including Infosys which is our top pick within the sector will continue to benefit because of this buoyancy in IT spending.

Secondly, if you look at Infosys versus the other large peers, Infosys has underperformed the largecap peers and that is how we think that Infosys will perhaps outperform the largecap peers in the near-term.

Q: What would be your top midcap picks at Religare?

A; Within IT we like Patni Computers because two positive things are happening for the company. Their share of large deals is increasing in the overall topline and second the stock is still at a significant discount to largecap peers. So we think that this discount to largecap peers over a period of time should reduce and the PE multiple should re-rate upwards and that should provide. So our target is an upside of 25% from here and that is decent money to make from hereon.

Q: Midcaps outside IT?

A: We think stocks within the logistic space should be closely looked because they are also directly connected to economic expansions. So a stock like Gateway Distriparks is something that interest us.

Two things are playing out for the company. You have positive container volume growth since last three months. Second rail haulage business which was a drag on overall margins is picking up pretty well so in rail haulage margin which is about 9-10% till the last quarter are expected to improve 15-16% on the operating level. So that gives us good amount of comfort and we think that is a stock to watch.

Q: Rs 300-350 for NMDC would you advice retail investors to go and bid and if that then at what price, at lower end, upper end or between the price band? What would be your view on NMDC?

A: I think given the discount which the issue has been priced to the ruling market price, even at Rs 350 the retail investor will get 5% discount, so even at Rs 350 for a retail investor it makes a lot of sense. Being a monopoly in a sector which is going to do well, I think one should definitely go for the IPO.

Disclosures: All the stocks which we have discussed our clients would have position in all of them.