Sanjay Vaid, senior vice president and co-head of equities, SBI Capital in an interview to CNBC-TV18 gave reading and outlook for stocks across various sectors. He also answered investor queries.
Below is the edited transcript of Vaid's interview with CNBC-TV18. Also watch the accompanying videos. Caller: I hold 60 shares of ONGC at Rs 279. Should I hold it or sell it with a stop loss of Rs 275 or 270? A: We have had two-three positive news on the stock. Oil prices internationally are softening and are stable. Also, the fuel hikes will help the under recoveries for most of the upstream companies going forward, so that is one good news. Cairn shareholders have accepted that royalty from Rajasthan would be cost recoverable which is marginally positive for the stock. After the deferment of FPO, we saw huge short covering happening in the stock on Friday. The open interest fell by almost 22%. The stock has now started to trade above 50 DMA of Rs 274. As long as it is holding above that it can go and retest the higher levels. One has to be slightly cautious because at 280 levels call writers are still holding on to their position. There could be some resistance around 280 levels. The stock can test around Rs 286 levels in the shorter term. From a long term view, it should easily trade 11 times FY13 EPS. Internally we have a target of around Rs 348. If one has longer term view then wait till the stock goes towards Rs 350 levels. In the shorter term it can easily go and test Rs 286. If the stock starts trading below Rs 274 and heads towards Rs 270 then probably one should do a stop loss otherwise as long as it is trading above Rs 274 levels one should hold on to his positions. There would be some positive flows and in case one is a very short term player then one can cut some percentage of losses of about 20-25% at around Rs 270 levels. But if one can wait and hold it for slightly medium term of three-four months then the stock can trade above Rs 300 easily. Caller: I hold 50 HUL shares bought at the rate of Rs 265 three years ago. I would like to keep it for long-term of one-two years. What is your view? A: At the current levels of Rs 340 the stock is close to its all time highs. Fundamentally, it is trading at very expensive valuation of almost 27.25 times of FY12 earnings of Rs 12.50. In the F&O segment we saw some amount of shorts building up on Friday because it is close to highs and people would be booking profit in that. Therefore in the short-term the stock could correct a little and head towards Rs 326-327 levels. In the long-term the valuations which we feel are slightly stretched could trade easily at 24 times FY12 earnings. Therefore there could be target price of close to Rs 300. I would recommend the investor to book partial profits and re-enter the stock closer to Rs 300 levels. One can again then be able to ride the upside. Q: Would you suggest any other consumer story which the investor could possible buy in post partial profit booking? A; We have to keep in mind one thing that most FMCG stocks, consumer durables and other segments have stretched beyond fair valuation. There could be some amount of profit booking happening in most of these stocks going forward. If people start moving from these so called defensives into high beta stocks then there could be some selling pressure in these stocks across the board. People will then move out money from FMCG and pharma into high beta stocks, the investor might get hit again. I would recommend partial profit booking. One should wait for correction to re-enter if one wants to stay in the same sector. Caller: I have 50 shares of HCL Tech at Rs 515Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
