Post Q3 earnings, Religare Cap's best bets: RIL, Hero Moto

It is not been very bad third quarter performance of most of the companies announced till now. However, Reliance Industries results was very disappointing along with the dampener buyback offer.

Manoj Singla of Religare Capital Markets is positive on RIL as he feels the buyback will support the stock. In an interview to CNBC-TV18, Singla explains, "We are positive on RIL, we believe the GRMs have bounced back and we think going forward the operating performance will actually improve plus the buyback should provide some support to the share price. On a 9-12 months horizon, we are actually positive Reliance."
As an investment strategy, he advises buying Hero MotoCrop in the two-wheeler space. Among the IT stocks, he prefers Wipro while Hexaware and MindTree are his favourites in the midcap IT segment. He also likes HPCL and BPCL at current levels. Here is the edited transcript of the following. Also watch the accompanying video. Q: How did you read the Reliance results and what would you do with that stock at Rs 760 now?
A: Reliance numbers are obviously weak and the stock is showing you that. As a house, we are positive on Reliance, we believe the GRMs have bounced back. Going forward, the operating performance will actually improve plus the buyback should provide some support to the share price. So, over a 9-12 month period, we are positive on Reliance. Q:United Spirits had a bad reaction to its results; the stock is down 5% today. How would you read into the numbers?
A: Yes United Spirits numbers were much below estimates of consensus as well as ours which is why we are seeing the correction. Fundamentally, on a 9-12 month view, United Spirits is a story that we like. There have been bigger issues related to the whole debt. So once those issues get sorted out, United Spirits would look good from current levels. Q: What have you made of this big market rally in January? Fundamentally, can you support much higher levels from here on?
A: Obviously. Most investors look at this rally as a dead cat bounce saying that the market was oversold and so we have seen the rally that we have seen now. According to me, it is very difficult to say whether the rally will sustain and what is important to wait for the UP elections and the budget. If we do see some kind of reforms, some kind of movement on the policy paralysis side, clearly this rally could be sustained and market could move up much higher.
On the other hand, if we get disappointments on that front we could see the market retreat. So just in terms of a rally, given that we were oversold, I am not surprised but whether we can sustain it will depend on what happens on the fundamentals and the politics side. Q: How much importance would you give to the policy tomorrow for the sustainability of this rally?
A: Tomorrow, there is not too much expectation in terms of getting at least repo rate cut. There are some market participants talking of a CRR cut. If we don