Use mkt fall to buy; bet on LIC Hsg, BHEL: Experts

Key equity benchmarks ended down Friday, with the market ignoring good earnings numbers from frontline companies like Maruti Suzuki, Hero Motocorp and ICICI Bank Brokers attributed the weakness to profit booking, as the market had risen around 6 percent over the last fortnight. The Sensex closed at 19286.72 down 120 points and the Nifty ended at 5871.45 down 45 points.

Sudarshan Sukhani of s2analytics.com advises investors to stay calm on the incremental loss caused by the market's sudden fall. "There is nothing to worry because this is normal. Markets correct after recording large gains. In fact, there will be nothing to worry if the market continues to go down because the market needs to trend - it is does not matter how it moves. If the losses persist for one more day, it is a sign that a deep correction is in store. But today's fall needs to be just ignored. Investors should assume that this is just another dip and start buying next week."
SP Tulsian of sptulsian.com offers his perspective on ICICI Bank's earnings. "I don’t think there is anything to complain about the earnings. The reduction in the gross non-performing assets has been slight while the net NPA remains constant. net interest margins (NIM) have beaten expectations while the PAT is very much on expected lines." Jet-Etihad deal brought the dynamics of the aviation sector to the fore and held sway at the broader markets during the week. While Jet Airways rose 20 percent during the week, SpiceJet also witnessed an upward trend. Dipan Mehta, member, BSE and NSE adds that though the Jet-Etihad is "fantastic", it was difficult to take a call on airline-stocks as most do not have a track record to talk home about. Broadly, I still hold a negative view on the sector."
For the entire May series, Tulsian holds a cautious-to-negative stance on the Bank Nifty. "The Bank Nifty has already moved to about 12,800. I don’t think there is any justification for the private sector banks- Axis Bank (at Rs 1,500), YES Bank (at Rs 500), IndusInd Bank (at Rs 460) and ICICI Bank (close to Rs 1,200)- to rally any further."
The market analyst is not optimistic about PSU banks either. “PSU-bank stocks will pull the Bank Nifty further down and I won’t be surprised to see the index falling to as low as 11,500 or below in the May series."
Regarding the fall in the market today, Tulsian adds that he holds a positive only up to May 3 when the RBI is to announce its monetary policy. He expects a cut of 15 bps on the repo and 25 bps on the CRR and says that this has been largely factored in by the market. “The only sector which merits a positive stance is IT with Tata Consultancy Services (TCS) and HCL Technologies witnessing a correction today. Wipro and Infosys are holding on as they have already corrected. Overall banks will be seen to cause the biggest damage in the series. The negative view for May series, which was expected to set in from May 3, but has already started to form." Tulsian calls the earnings announced by Siemens and ABB “horrible”. “Though there was little expectation of positive results from companies, the fall in bottom-line was not expected.” Among other capital-goods stocks, Tulsian is positive on BHEL and is cautious on Crompton Greaves for the next few quarters. “Overall, the situation has not improved for the capital-goods industry." Maruti Suzuki announcement of results today revealed an increase in fourth quarter standalone net profit by 80 percent year-on-year at Rs 1,148 crore. This sent the stock upt to a new 52-week high of Rs 1,693 on the NSE. Tulsian adds that the stock exhausted any further run-up. “Though the results have been very great, profit-booking will set in and take its toll. I do not adivse long positions on Maruti and those who are holding positions should definitely book the profit at the current level of Rs 1,660 - Rs1, 670. On the contrary, I will not hesitate to take a contrarian call on the stocks like Hero MotoCorp and Bajaj Auto. If Hero Moto reports at PAT of Rs 490 crore in line with Q3, it will make be brave enough to take long position on the stock."
Tulsian’s suggests short calls onIndiabulls Real Estate with a target of Rs 68.50 with a stop loss of Rs 70.50 and Canara Bank with a target of Rs 415 and stop loss of Rs 422. LIC Housing Finance posted strong earnings and the stock has corrected enough to be lucrative buy. “Whenever LIC Housing has started an upward move, it jumps ahead by Rs 25-Rs 30 in one go. So, I won’t be surprised to see the share moving to Rs 265. Though it has already run up by Rs 10-12 today, there is room for further appreciation going forward.”
On Monday, Hindustan Unilever (HUL) is to announce results and the stock has turned weak and today the stock is down almost 2.5 percent." I don’t think that investors should be positive on HUL because the results for the December quarter were not impressive and it is volume growth that will ultimately decide the trend. The share has not been able to move beyond Rs 470-475 and today’s weakness indicates the need for caution," says Tulsian.