Mkt move to continue; bet on banks, media: Antique Stock

After a slew of reforms from the government, the market has reacted well and it has contributed to the overall sentiment, feels Kirti Doshi, Promoter, Antique Stock Broking. According to him, there may be 1-2 percent downside from the current levels but, it will continue to move ahead.

In upbeat market conditions, Doshi picks the public sector banks, power companies and some midcap names where the interest burden was high as his best bets. He is positive on Canara Bank, Bank of Baroda, Vijaya Bank and Dena Bank along with media stocks like Hathway, Den and TV18. Doshi also likes Mahindra and Mahindra, TVS Motor, Jaypee Infra and Reliance Infra. Here is the edited transcript of the interview on CNBC-TV18. Q: You much have touched base with your guests whom you will be speaking to later today, what is the sense you are getting? The mood has been unexpectedly upbeat in the past week or 10 days, is there good to go for more, does this rally have legs up until say 6000 or so?
A: In the last 20 days, whatever we have seen in terms of the government taking key decisions which we all were waiting for has changed sentiment. Besides, QE3 in the other part of the world has thrown liquidity into the Indian capital market also. I expect this move to continue. May be 1-2 percent downside from here but, this move may continue going forward from here. Also read: Short Nifty and go long on HDFC Bank: ICICI Direct's Gupta Q: If you do maintain a positive bias on the market what kind of fundamental changes should one make in their portfolio going ahead?
A: I think we will increase our exposure to some of the public sector banks, we will increase our exposure to some power companies and in the midcap companies where the interest burden was very high. I think the portfolio can have all those companies. Going forward, it looks like the interest rate will come down and that will be very positive for some of the major midcap companies where the interest outgo was very large. Q: Which are the midcaps that you would pick at this time because the large caps have had their run, the more beleaguered ones are in the midcap space. A good time perhaps to look for some hidden gems, what would they be?
A: I think in every sector there are different names which we will select. Amongst banks we will select some of the banks like Canara Bank, Bank of Baroda or some of the smaller banks like Vijaya Bank or a Dena Bank.
In the media we would like to continuously buy all the broadcasting cable names like Hathway, Den, TV18. In the automobile sector we continue to like Telco, Mahindra and Mahindra or smaller names like Auto Corporation of Goa or TVS Motors.
In infrastructure there can be Jaypee Infra, or Reliance Infra. These are the names which can outperform when the market will go on the higher side. Q: Do you have any views on IFCI, the stock is down 10 percent. Now that the government will acquire 55 percent of the company, how much of a blow do you think it would hold for minority investors?
A: I don't track this stock very closely but, everything is in the price and people will forget about the stake dilution in a few days. Q: Let's come to the one where all those restructuring moves pulled up share prices somewhat - Lanco, GVK, GMR, JSW Energy, the entire lot. Of that space is there anything that you will put your money on?
A: I think JSW Energy which is our best stock, will outperform once the market goes higher and the interest rate will fall. Moreover, the call prices has also started coming down.
_PAGEBREAK_ Q: You spoke about a limited downside for the market, what about the upside, would you be surprised to see a new high by the end of the year or is that a given because of the kind of administrative reforms that the government has rolled out?
A: I will not be surprised to see a new high in this financial year. Q: What about the stocks that will take it there, will it be the banks, what will take it up there, which will be the best Nifty performers?
A: It will be a mix of all. It will be some of the PSU banks, some of the oil companies because we feel that after the reforms like a cap on LPG prices and increase in diesel prices, will lead to the currency appreciating to around 51-51.5. I am very bearish on the global crude prices.
If global crude prices come down below USD 100 then oil PSUs, which are the most under owned sectors in the entire gamut of the capital market, can create a large upside in the market. That sector has a huge upside and people should watch out for it. Q: How are you viewing the entire airline space, there has been a reasonable amount of consolidation with one player considerably weakening and yet we notice that they are not quite able to push up fares. Is there room to buy any of the airline stocks?
A: In that space we have a buy on SpiceJet. If you see the balance sheet, it is much more sound and better compared to all the other competitors and the promoter stake is also very high. We feel there is a market share gain also by this airline in the last 2.5 years.
There is a possibility that large international airlines will be interested in taking a large or a minority stake and this can be a very large wealth creator in the next 1.5-2 years. Q: You have a lot of energy companies that will be speaking at your conference today, what is the mood that you are getting about the investment into the oil and gas space and what kind of stocks one should be looking at right now?
A: After the last reform of reducing the LPG cylinder supply and increasing diesel prices, I think there is a lot of interest in this sector and we are witnessing huge interest from many different institutional investors. We have already 145 people who have confirmed to come to this conference and there are more than 345 meetings till now that has been already committed by different institutional investors. Q: Among the energy stocks you have got Petronet LNG, Essar Oil, IGL, stocks that are not always discussed. In that do you have any buys in this space, from the entire space including RIL and BPCL?
A: We have a buy on Oil India, we have a buy on HPCL, BPCL, ONGC, Power Grid, Indraprastha Gas. These are the companies which really are available at throwaway prices. If you see their replacement cost and their book values, there is a huge interest once things turn and more reforms take place in this sector.