Recently, India has been one of the best performing markets and that is on the back of very strong revival in the flows, says Hemang Jani, Senior Vice President, Sharekhan. According to him, there is going to be a good buying opportunity in the midcap space.
Recently, India has been one of the best performing markets and that is on the back of very strong revival in the flows, says Hemang Jani, Senior Vice President, Sharekhan. Jani sees continuous flows over the next few weeks.
Below is a verbatim transcript of his interview with CNBC-TV18's Anuj Singhal and Latha Venkatesh. Also watch the accompanying video.
Q: What is the sense that you are getting, good to go more, do you think it’s only a matter of time and before the week is out 6,000 will be behind us?
A: We think that March has been a very good month for India. We have been one of the best performing markets. This has been on the back of very strong revival in the flows. What is surprising to see that the ownership amongst the investors both across F&O and the cash market is extremely low and most of the people were not expecting the market to go up so soon.
So, as we see continuous flows over the next few weeks. We think that the market could actually remain good. As the overall comfort is there in the broader market, which will also be reiterated by the quarterly numbers, we would see some risk appetite coming back. And that would be reflected in the way some of the midcaps stocks are performing. So, we think that there is going to be a good buying opportunity in the midcap space.
Q: Midcap space has been outperforming for last three-four days. As a theme you like some of these gas stocks like Petronet LNG and Gujrat Gas?
A: Yes, absolutely. Given the high crude oil prices and the fact that the domestic gas production is going to take a while because Reliance has indicated that it will take a while to scale up the production, we think that people will move towards the gas. So, companies like Petronet LNG will be benefited because of the higher import of the gas. Companies like Gujarat Gas and Indraprastha Gas, which have a distribution in place, would be benefited because of the higher volumes. So, we think that these are some of the good quality companies that one could look at.
Q: Infrastructure was not a great participant, only in the past week or so we saw some kind of interest returning and we saw most of those stocks in the green for the past four-five days. Is there anything in that pack that you like?
A: The entire space was re-rated for some genuine reasons. But we think that some of the companies, which a much stronger balance sheet and a better execution track record, would benefit in the current environment as we see more order inflows. So, companies like IRB Infra and IL&FS Transportation Network , both of them have a very strong balance sheet.
We think that the order inflow over the next two-three months would improve once NHAI starts giving orders. Some of the smaller players who are not able to tie up funds or who don’t have execution track record will actually not be able to participate, which is good news for some of these companies. So, we think that given the severe beating that these companies have got in the last about three months, there is the case for a 25-30% appreciation from current levels.
Q: Sharekhan has just came out with a note on cement sector and that’s one space, which has been also buzzing. Anything you like in that space?
A: We think that overall growth there is pretty strong, which is reflected in the dispatch numbers. We think that after the price hike we have seen in Northern markets, Western and Southern markets could see a hike of about Rs 10-15 per bag. So, some of the smaller companies like Orient Paper, Heidelberg Cement are the ones where we think that their valuation gap is actually very heavy and there could be some kind of an upmove there.
Q: Is there anything you like in the power stocks at all? Have you cast your eye over them? JSW Energy in the past three days or something has gained about 14% and that’s hardly the only one. Anything in the power space at all?
A: The smaller companies, I can’t think of anything. But BHEL, we think that given the very strong set of numbers that they have delivered and the company has underperformed in the broader market, there is a scope for another probably 8-10% upmove there.
Q: Any exposure, disclosures, you want to announce?
A: It would be safe to presume that I and my company have interest in the stocks that I have talked about.
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