See Nifty in 5300-5900 range for most of 2011: Anand Rathi

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 TCS BSE | NSE 29/05/12 Are Mutual Funds betting on TCS? Other Stocks in this news Infosys | VIP Industries | TTK Prestige | Tata Motors | Ashok Leyland | Maruti Suzuki India | Cera Sanitaryware | Kajaria Ceramics | Hind Rectifiers | Jubilant Foodworks |

Devang Mehta, Vice President and Head - Equity Sales, Anand Rathi Financial Services in an interview with CNBC-TV18 said that he sees some individual stocks and sectors doing well even when the market is predicted to be lackluster.

He expects market to bottom out at somewhere around 5,300-5,200 level because valuations tend to get attractive at those levels.

For the larger period of this year he sees market to be in 5,300-5,900 range, consumption and investment themes are expected to do very well over this period.

Below is the verbatim transcript of Mehta's interview with Latha Venkatesh and Anuj Singhal of CNBC-TV18. Also watch the accompanying video.

Q: We have had now several weeks, maybe months of the market moving in this narrow range. What is the sense you are getting? Is there a breakout on the upside at all?

A: My sense is that we are seeing a sense of consolidation in the market at this point of time which is surely going to be healthy for the market. This is because we had seen almost a runaway rally from 5,200 to 5,700 and post that we have corrected a little bit.

But the truth is that if we follow Nifty and Sensex at this point of time it is not going to lead us anywhere. But there are individual stocks, pockets and sectors which are really doing well in this situation also though volumes are less and the markets are being predicted to be lackluster.

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Q: So going forward as we enter the second half of the calendar year what's the kind of range that you are working with for the market?

A: The markets would tend to bottom out somewhere around 5,300-5,200 where we are seeing a great bit of support - not only the technical support but also valuation support. This is because we know that the valuations tend to get attractive around those levels and get a little expensive around 5,800-5,900.

So my guess would be - the markets would probably be in a range of 5,300-5,900 for a larger period of this year. But as I said - there are still consumption themes, there are still investment themes which could do very well over this period.

Q: Not much has come out by way of numbers in the bigger space in the heavyweight space except for a couple of IT stocks. Anything in the broader markets in terms of the numbers that impressed you?

A: We have been positively impressed by TCS since the last three to four quarters. We have always maintained that we prefer TCS over Infosys since the last four quarters and it has not surprised us.

TCS is now the new IT bellwether if you like to say it that way. So if somebody wants to own something in IT - TCS looks a better pick. The corporate profitability would bottom out in the next one or two quarters, the interest rate as well as inflation would peak out in the next two quarters.

So I guess it's the right time to start accumulating good stocks. Normally banking is always a good sector to buy whenever we feel such type of phenomenon happening.

Q: What about some of these highflying stocks like VIP , TTK Prestige - any of these stocks you track?

A: More reaction to VIP and TTK is seen because of their entry into the F&O segment. Though valuations seem quite ridiculously expensive at this point of time but this is what the consumption theme can do. We were out with a consumer sector report a month back and we have seen almost all stocks which we have mentioned are on fire. The Indian consumer is really maturing and we are seeing the effect of that.

Q: But they are already expensive - Jubilant , VIP. Would you still hang cling on to any of these stocks?

A: We should book profits in these stocks. One has to enter and if somebody wants to still play the valuation theme in the consumer sector - Nestle, Asian Paints, ITC, Marico, Pidilite - all these stocks look lot better than Jubilant or the stocks that you mentioned right now.

Q: These are small stocks - I don't know if you track them in the sense they are not always in the news but the two sanitary-ware stocks Cera as well as Kajaria tiles company but in the same space - these have been moving for the past couple of days, even Hind Rectifiers - any of these in this space that you like?

A: Yes, Kajaria Ceramics we do like. We had come up with a report on Kajaria Ceramics just two months back we are seeing good bit of profits for our clients. We are advising them to probably book partial profits but Kajaria Ceramics really looks good for the longer term point of view as well.

Q: Tata Motors - it has gone ex-dividend by about Rs 20 or so. Even factoring in that the stock is down a bit, easily one of the biggest losers in Nifty even if accounting for the ex-dividend component and even Ashok Leyland is down about 2%. Any thoughts on any of these two stocks?

A: For autos there will be short term pressures as the headwinds are still there. We know that there is global turbulence happening, higher interest rates, higher inflation, higher petrol prices, higher fuel prices.So one or two quarters still may be bad for these companies.

But come October-November maybe the festive season - demand would start and at least vehicle sales for the car companies, passenger cars would start improving. So I guess Maruti will be our top pick at this point of time rather than Tata Motors and Ashok Leyland which are more into the CV space as well.

Disclosures: The stocks that I have discussed, we could have recommended it to our clients and they might be holding them, I do not hold any personal positions in them.