Jan 28, 2013, 07.49 PM | Source: CNBC-TV18
Post Friday run up, Nifty today ended the day on a flat note at 6074.80. The BSE Sensex ended that day at 20103.35.
Amisha Vora (more)
Joint MD, Prabhudas Lilladher | Capital Expertise: Equity - Fundamental
Meanwile, Amisha Vora, joint managing director, Prabhudas Lilladher, is of the view that the market has already discounted a rate cut of 25 bps and 25 bps rate cut will not have much impact on the market.
Below is the edited transcript of the interview.
Q: If we do see a 25 basis points rate cut tomorrow which the Street is expecting, which way do you think the markets will swing?
A: I think the market has already discounted 25 basis points rate cut. I don't think that it will have any major impact on the market.
Q: In context to a no surprise policy and a 25 basis point - how would you approach the rate sensitives from here on?
A: I think there are two sets of rate sensitives. Since the banking is midst of the dilemma of either slowing slippages but at the same time staring at extremely slow growth potential also for 13-14. I think they will have limited impact. To some extent rate sensitives would have an impact on real estate, auto and construction.
Construction makers of the impact of interest cost on their bottom line as the percentage is so huge. So 25 basis points - will not make any difference in some of these rate sensitives. They will still be dictated by some of the other larger concerns or optimisms in the market.
Q: What are you buying in this market because even in this earnings season, we have seen quite a bit of surprises both - on positive and negative sides if you talk about Infosys , HUL and Reliance. Post the earnings season, how would you recalibrate your portfolio to adjust for changes? What would you buy now?
A: The consumption engine which was keeping the whole environment, economy and market going is slowing down a bit. The investment engine which is to take over from here on is still waiting for some of the things to shape up which maybe in terms of interest rate scenario, some administrative decisions and speed of action in policy making. The whole market is on two legs.
First, solid global liquidity and second, policy change which is driving and concrete things on ground still need to happen. So in these circumstances we feel that we would still be very choosy and bottoms up in terms of stock selection. Policy changes will be important before giving any weight age to any particular sector.
Q: There are talks about a possible QIP for Axis Bank which could be launched sometime soon. How would you approach Axis Bank and if it goes through a QIP?
A: From private sector banks, any fund raising is definitely positive as they are book accretive, it that happen for example Axis Bank at 1.6-1.7 price to book or maybe little higher. That is positive for Axis Bank and also in light of the fact that till now they have weathered the fears of impact on their asset quality pretty well.
With this dilution, they will be closer to about 1.7 times price to book and probably closer to 2 so we will continue to be positive on Axis Bank . In today’s Bank of India results there are some surprises, first they have written off almost Rs 1000 crore.
While the provisions are looking little sobered in terms of their coverage ratio, they are more of less the same. Write off of assets is pretty high. The restructuring number also seems little higher unless it covers Suzlon where the market probably would like to have little more clarity.
Q: What is your view on ONGC ?
A: On ONGC, within the sector, we have highest preference for oil and second highest is for ONGC. We would not very aggressively pursue this stock after the run up which we saw in the stock post announcement or intention of announcements.
Q: Many midcaps like HDIL , Polaris , Reliance Communications , SREI Infra - most of them are down close to about 10 percent from last weeks level. Would you see some value in couple of these midcaps? If yes, which ones would you recommend at current levels?
A: In general, on a medium term we are bullish on United Phosphorous . In the auto ancillary space we are bullish on Amara Raja and Motherson . We pick Mahindra Holidays and in the real estate sector we like southern players. But we are now aggressively pursuing any of those names which you mentioned.
A: We continue to remain bullish on Maruti because some of their recently launched models have been doing reasonably well. If the difference between diesel and petrol gets slightly more bridged, that will revive the other sector which is not doing so well. The third biggest thing is the outlook on yen. We continue to remain slightly optimistic on Maruti. Comparatively, we are not as optimistic on Tata Motors.
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