Even though valuations are attractive, Pankaj Pandey, Head of Research, ICICI Direct advices investors to stick to those sectors that provide both value as well as growth.
According to him, many stocks are currently trading lower than book value.
"The opportunity will come in terms of buying these stocks and keeping it for slightly longer, two-three year kind of horizon wherein these stocks can give potentially far better returns in the overall market" he tells CNBC-TV 18. Below is a verbatim transcript of his interview with CNBC-TV 18's Latha Venkatesh and Sonia Shenoy. Also watch the accompanying video. Q: You think now, prices are looking like they have all the bad news in the price, and people will start picking up at this point in time?
A: For Sensex our target is 16,924 which is 14 times FY12 EPS of 1209. So from valuation perspective, things are quite comfortable and are attractive. However, in terms of our approach, we are looking at sectors wherein we get both value as well as growth.
So from that perspective, we like sectors like IT, pharma and banking. This has been our stance since the beginning of the year. The capital sensitive and interest rate oriented sectors and as well as midcaps and smallcaps, we feel that there might be some bit of more pain because the expectations on interest rate and inflation is yet to peak out. So once that happens, whether it happens in one-two quarters down the line, that is where we look at these segments into market also.
But as of now we are chasing growth and not value from overall market perspective. Q: One can
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