Hold Sesa Goa, says VK Sharma

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Hold Sesa Goa, says VK Sharma

VK Sharma of Anagram Stock Broking is of the view that one can hold Sesa Goa. Whatever is happening in the US in terms of infusion of money that will ultimately result into some kind of inflation and commodities will be the best play in this particular sector.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by VK Sharma See what other Experts & Brokerages are saying about Sesa Goa See messages about Sesa Goa Sesa Goa BSE | NSE 28/05/12 Are Mutual Funds betting on Sesa Goa?

VK Sharma of Anagram Stock Broking is of the view that one can hold Sesa Goa .

Sharma told CNBC-TV18, "There is a dichotomy in the sense that although the steel prices in China are at the lower levels and the last two months we have seen good figures coming out of India as far as the steel are concerned in the sector. So that gives you a feeling that the sector is doing well but are these signals of being well, will they continue? So my seen is the current buoyancy one is seeing in the steel stocks is essentially function of kind of expenditure that the government has done in order to finish off whatever the allocations were there ahead of the elections."

He further added, "After May it will be very difficult for this kind of buoyancy to continue either in cement or for that matter steel. So the cues for the commodity sector per se do not augur well for steel as a segment. But considering the fact that Sesa Goa, which has around Rs 40 per share in terms of cash, so affectively 50% of that is cash holding and it exports 95% of its ware, so essentially its tide down to the overall buoyancy of the global markets. So to that extent it will assured of the moment the newer prices are decided so it has some kind of buoyancy because most of the contracts are long-term in nature and because of the fact that the cost of production is almost USD 25 a tonne. So that gives a lot of elbowroom even weathering out any kind of a lower prices for iron ore sector also."

"My sense is the investors should hold on and whatever is happening in the US in terms of infusion of money that will ultimately result into some kind of inflation and commodities will be the best play in this particular sector. So in this scenario Sesa Goa is a hold and one should not get bothered about the day to day dips in prices."