Nifty headed towards 6300; bet on ICICI Bk, Dabur: Darashaw

The market has seen a considerable upmove over the last few weeks and the Sensex has also crossed the 19000 mark in early trade on Thursday. Regan F Homavazir of Darashaw believes the market may consolidate in the near term but, 6,300 on the Nifty is in sight. However, in order to reach that level it is essential for the NSE benchmark to hold 5600.

Homavazir is positive on HDFC Bank, ICICI Bank and Kotak. He also picks Tata Global, Dabur, Godrej Consumers and Godrej Industries as his favourites in the consumer space. Besides, he expects ITC to underperform for two years and advises investors to exit the stock at current levels. Also read: Bullish on IT; 5790-5870 key levels for Nifty: Jai Bala
As far as the rupee is concerned, Homavazir feels it may weaken to 54.30 per dollar in the near term. Here is the edited transcript of the interview on CNBC-TV18. Q: You had got it right. Last time when you came you told us that above 5300 the market would see a 400 point up move. It has panned out that way. Where does it go from here?
A: There are two things to the story now. Should we sustain above 5600? All is well, but if we were to go below 5600 I would worry a little. Above 5600 we have the potential to move up to 6300 now. The market has done a lot in the near-term, so there is going to be some sort of a sideways movement to a little bit of a dip. But, it looks positive.
The reason why we said a 400 point up move is likely is because the longer term picture had turned positive above 5300. That is why we would assume that the market would go to 6300 in due course. Q: At the moment if you have to give us in terms of bets, what are the chances of 6300 higher than the chances of piercing 5600? Which might come in first?
A: Even if you were to go to 5600 there are stocks that are going to outperform the market. I focus on those stocks which are in the financials, because we have been constantly talking of HDFC Bank and HDFC Ltd. being among our top picks. They are the wealth creators of this run.
We expect HDFC Ltd. to go up to Rs 1,000 at least and HDFC Bank to come to Rs 700 regardless of whether the market stays here or not. We believe that these banks will continue to outperform the market. Kotak will also be one bank that we would look at and now the latest entrant in our list is ICICI. We are expecting ICICI to go up to Rs 1,470. Q: Lot of people trade the Bankex. How would you draw the chart of the Bankex from hereon?
A: The Bankex looks alright. You are at a resistance of 12000. Above 12000 I think the momentum slightly increases further. Q: Any other non-financial stocks that you would be interested in?
A: We have been talking about Tata Global and we also like Dabur, Godrej Industries and Godrej Consumers. Tata Global has done exceedingly well and we expect it to go to a price target of Rs 220. We expect Godrej Consumers to test Rs 970. We also expect Godrej Industries to move to an immediate price target of Rs 330.
Dabur is one long-term bet that we would like to take at this current juncture with a price target of Rs 180. One important thing is these are the buys, however one large sell that is there in the market in this consumer FMCG space is ITC. We would expect ITC to not perform from here onwards for the next two years at least. It is an absolute exit. It need not be in the portfolio. Q: The other asset class that is really sparking a lot of interest is the rupee. It has breached 52 today to 51.95. Do you see more gains over there or is this the time you will start buying dollars?
A: Let me just recap a few things. We had said 56.50 is the worst case scenario for the rupee and the rupee has strongly appreciated from there and met all our targets till 53. We are now expecting the rupee to weaken to 54.30.