Way2Wealth's view: Maruti, Century Textile, Shree Renuka

Ambareesh Baliga, COO, Way2Wealth doesn’t think there is much to be expected from the earnings season as already the expectations are quite tepid unless, the market has some major negative surprises like what we saw from Infosys.

“I don’t think there will be too much of an impact. Going ahead, it is the policy announcements which will have more impact on the market than anything else,” he adds.
Baliga gets stock specific and gives his trading calls on Maruti, Century Textile, PSU banks and Shree Renuka. Below is an edited transcript of his interview to CNBC-TV18. Q: How would you approach a stock like Maruti given all the news since last evening?
A: We have been quite positive on Maruti for a while now and the last time there was a solution to Manesar we thought that was it and it would be smooth going ahead but then what has happened yesterday clearly is a jolt and clearly calls for a review. At this point of time, I would surely stay away. Q: There was quite a flurry in some of the textile faces yesterday, anything that you are buying from that pocket?
A: Textile faces again those cozy reality plays which we have been looking at and clearly one of them is Century Textile where we still see that there could be some more upside infact we are looking at an upside of at least another Rs 35-40 from here. Q: Public sector banks have not been doing as nearly as well as the private sector banks. Do you see that dichotomy in performance persisting?
A: In case we have that diesel price hike which we are expecting towards this weekend and based on that in case we have that rate cut towards the end of this month, clearly I see at least the PSU banks outperforming post then. So this sort of a correction which we have seen in some of the PSU banks we should utilise that to buy right now. Q: Any of the commodities that you would be looking at now either hard metals or even sugar?
A: Not really because as far as metals are concerned, we are still bearish at least over the next two-three quarters but in case the market rallies, yes, you could see some sort of a bounce back but it is not worth buying metals from that point of view.
I would surely prefer to buy an infrastructure play or a capital goods play which would possibly outperform as compared to metals. Although on sugar prices we expect it to harden but as far as profitability for the sugar companies there, I don’t see that returning at least for the next two seasons. Basically from a bounce back angle something like a Renuka possibly can go to levels of about Rs 36-38 even if the market goes to levels of about 5,400, I think beyond that it is a bit difficult.