Find out: 3 banks, 2 NBFCs that Darashaw is betting on

Regan Homavazir of Darashaw expects the Nifty to hold at 5750-5850 levels. He told CNBC-TV18 that the extent of fall in the Nifty after reaching 6200 levels has reduced considerably. In 2008, the index fell 63 percent  after touching 6200, which reduced to 10 percent in 2012. He said Nifty is a good buying opportunity now.

Speaking on the Bank Nifty, he said that the private sector banks have performed better than the public sector ones. He placed his bets on HDFC, HDFC Bank, Karur Vysya Bank, Kotak Mahindra Bank.
He added that Shriram Transport Finance is a wealth creator and expected it to touch to Rs 1,200. In the auto sector, he preferred Maruti and Mahindra and Mahindra (M&M).
On the falling rupee, he said that it was independent of the market movement. He does not see the rupee falling beyond Rs 57.30 per US dollar. Also read: Remain short unless Nifty breaches 6010: Gaba Below is the edited transcript of his interview to CNBC-TV18. Q: We had an up and down kind of run. How are you feeling about the Nifty after the last couple of sessions?
A: First and foremost, look back at how the Nifty has performed whenever it has reached a level of 6200. We reached this level in 2008, 2010, 2012 and now in 2013. Every time you reach this level, you fall very significantly. The first time it was 63 percent, thereafter 20 percent and 10 percent.
The extent of the fall is reducing dramatically. We expect the Nifty to hold that about 5850 to 5750 which would be a higher base again. So the fall which has been recent; we would expect it to be a buying opportunity rather getting panicky about the Nifty fall. Q: What kind of call would you take for the series now? What kind of markers would you set on the index on either end?
A: As far as the markers on the index, we are very cautious about the Nifty moving past 6200. We want to see that happen this month itself. This month being the quarterly ending month, we want to see the Nifty trading above 6200.
In any case if the Nifty starts to go below 5750, we will start to worry. These are the two markers on the upside and on the downside. We have a positive bias on the Nifty. Q: The problem though is the Bank Nifty and the extent of the damage very early in these series. What have you made of that and the constituents within it?
A: The Bank Nifty has been a mixed bag. If one looks at the private sector banks, it is not all that bad. As far as the public sector is concerned, State Bank of India (SBI) has been the largest drag on the index. While SBI being a drag it is closer to a very key demand level so, 2000 is something which is very important for SBI to sustain above.
As far as private banks are concerned, we are looking at HDFC, HDFC Bank and Karur Vysya Bank being important. The new name that has just come in the stocks that we want to own is Kotak Bank. The other financial that I would like to talk about which could be a possible wealth creator is Shriram Transport Finance.
Shriram Transport Finance is very important and a wealth creator. We expect it to go to about Rs 1200 initially.
_PAGEBREAK_ Q: What would you do with some of the auto faces now? Over the last few days this sector is breaking down amongst rate sensitives?
A: In the autos, except for Maruti and Mahindra and Mahindra (M&M) there is no auto stock that we really like. Mahindra and Maruti both seem to be an outperformer. We would rank that in the top list and we are buyers there. Q: What is happening with the currency? We closed up series where we did okay but the rupee was down 5 percent. In dollar terms the Nifty actually returned nothing?
A: Yes. As far as this currency is concerned, we were at 5500 last time and the currency was at 53. Today the currency is closer to 57 and we are closer to 5900 or maybe 6000.
This seems to be some independent move. It is not linking with one and another. I would suggest that we would look at it very independently. The dollar as far as it is, 57.30 is the worst that we are looking at. So we expect rupee to start appreciating. Q: Which of the heavy weights would you point? Which one is most likely to take the market higher?
A: As far as the banks taking the market higher; HDFC, HDFC Bank will be the top bets. The second rung would be Kotak so these three banks we would really bet heavily on.