Experts advise to buy on dips; suggest stocks

Dalal Street took a breather today, after last week's strong rally. The Nifty ended flat. It lost 8.9 points and ended at 5,870.95. The Sensex fell 34.58 points to close at 19,305.32.

In an interview to CNBC-TV18, market expert Ambareesh Baliga says it is best to be a bit cautious at this point of time and wait for some sort of a correction. "We could see some small correction and possibly utilise that to buy at lower levels," he adds. In the midcap space, Baliga is bullish on Talwalkars and Nelcast. "I have been recommending Talwalkars.  I still recommend at these levels, expect levels of about Rs 260-Rs 280. Right now, I am recommending Nelcast," he elaborates.  Meanwhile, Sudarshan Sukhani, s2analytics.com says the trend is very clearly up. "There will be an opportunity for the Nifty to begin a new rally from the current levels tomorrow morning. That’s the time when entry should be done," he suggests.  According to Sukhani, Mahindra & Mahindra (M&M) and Exide Industries are buying opportunities. He is also upbeat on Jaiprakash Associates and Ultratech. "I would be bullish on JP Associates as well as on Ultratech. The key is to buy it on dips," he asserts. Among the heavyweights, Sukhani says, L&T should be favoured. Also read: Fitch says Q2 GDP confirms slowdown, market sees deeper cut Below is the edited transcript of Ambareesh Baliga’s interview on CNBC-TV18. Q: Do you expect any surprise from Parliament this week? A: I don’t think so. We will be hearing a lot of noise over the next few days, but then I am very sure Congress would have done their homework before agreeing for voting on FDI. I don’t see any nasty surprise as such towards the end of voting. But a bit of a doubt is always there. So, it is best to be a bit cautious at this point of time and wait for some sort of a correction. We could see some small correction and possibly utilise that to buy at lower levels. Q: Any picks that you are recommending from the midcaps? A: We have been recommending a number of midcap picks in the past few weeks, which have done well. I had recommended Mahindra Holidays last week. It has moved up decently well. I have been recommending Talwalkars as well. I still recommend at these levels, expect levels of about Rs 260-Rs 280. There is one more stock in the auto ancillary, which I am recommending, right now, is Nelcast. That is quoting at about Rs 21.50- Rs 22. I expect some takeover news. So, that should make the stock move. Q: There is a deal brewing in the cement space, Ultratech Cement as well as JP Associates? Do you see a case for rerating of the cement sector, if this deal goes through? A: There could be some sort of move up, just when the deal goes through. The way things are the cement sector is already quite expensive. Most of the stocks are quoting at 52-week highs. So, at these levels, I will surely not go ahead and buy any of these stocks. _PAGEBREAK_ Q: Had a look at Mphasis latest acquisitions? Wt have you made of it? A: I think we will surely see some bump up because of this. We have already seen some move this morning. The way things are it can possibly move either Rs 15-Rs 20 more from here. But unless ofcourse we really see improvement in the bottom-line for Mphasis on a sustained basis, I don’t see a fresh up move in Mphasis. Q: Did you manage to hear comments from Fitch? What would you have made of the gross domestic product (GDP) estimates of 7 percent for FY14? A: I think it is slightly on the higher side. I am not that bullish, as of now, but then we surely will see an uptick from where we are. We are, more or less, bottomed out. But moving to those levels of what Fitch is talking of, I doubt whether we can move to those levels by FY14. Q: What are your thoughts on the aviation space? A: I think the news flow is already there in the prices. We have seen a major upmove in Spice and Jet. But as long as the basic business does not throw up profits and we have hardly seen profits in the past at least two to three years, at these levels, it does not make sense buying it from a fundamental angle, from an investment angle. But from a take over point of view, strategic point of view, yes, we could see some more up moves. But then it is only a trading play and not an investment play at this point of time. Q: What is your view on GMR Infra? A: After that negative news flow, there have been some positives today. We had the stay order. We could see some upmove because of that. But unless the investment board is set up for infra specifically, I don’t really see a major move in GMR or other infra stocks over the next few weeks. But once that is set up, it will be an impetus for the sector to move up and possibly because of that we could see GMR moving to levels of Rs 26- 27. But that will take a while. Q: What is your view on Tata Motors? November sales weren’t that great. They did have that plant shut down for third time in FY13 because of rationalisation of demand etc. How would you approach Tata Motors and the demand scenario that they are facing at this point? A: I think they could see one more month of weak numbers. Incase we see a correction in Tata Motors, although it has not corrected too much, but then if we see a correction to levels of about Rs 255-Rs 258, that is an opportunity to buy. In the next calendar year, I see an uptick as far as the sales are concerned. Q: What would your view be on Jain Irrigation and United Phosphorus? A: We had seen these stocks correcting quite a lot in the last 12 months. But being agro linked and I see agro business really doing well over the next couple of quarters, I see an uptick on these stocks. I see Jain Irrigation going back to those levels of Rs 90-Rs 100 and United Phosphorus to levels of closer to about Rs 145-Rs 150. Q: What would you peck the next resistance level for the Nifty at? If in case we would breach it, what would be the upside target that you would be looking at? A: The next level, I see, is about 5,950-6,000. Once we cross that, there will be a clear move to a new high. I see that happening possibly towards the end of this month, early January. But before that, we will see some consolidation, some small correction. People should utilise that to buy. Q: What is your view on SpiceJet and the Maran family further infusing money by raising their stake by 5 percent? A: I think that is positive. We have seen this stock move up because of that. There are talks of foreign airline investing, although it has been denied. We have seen this stock moving up. But, fundamentally I don’t see too much value at these levels. So, from a trading point of view, I suppose it can go to levels of about Rs 47-Rs 48. But then it does not make sense investing at this point of time.