In August, more companies will report their results which are expected to be weaker than expected. At that time, if Nifty has crossed levels of 11,300-11,500, there could be a significant correction, which is fundamentally due," Sumit Bilgaiyan, Founder of Equity99 said in an interview to Moneycontrol's Sunil Shankar Matkar.
Q: Market remained volatile in last two weeks but up move continued. Do you think the market will not look back at 10,000 again?
The market is expected to cross 11,000 soon as per technical analysis. While fundamentally the Asian markets have witnessed a sharp rebound and continue to remain strong owing to which Nifty retracting to 10,000 seems difficult. As FII inflows continue to remain strong the liquidity remains healthy and hence sharper correction without a specific event trigger on domestic/global seems unlikely and bullish trend is expected to continue from minor retracement from time to time.
In August, as more companies shall report their results which are expected to be weaker than expectation, that is when if Nifty has crossed levels of 11,300-11,500 then there could be a significant correction which is fundamentally due.
Q: Yes Bank FPO finally received 95 percent subscription with large support from QIBs. Do you think the stock price will get adjusted to near issue price of Rs 12 before listing?
There may be a minor price correction but it may not get adjusted to Rs 12 as the primary reports suggest around 27 DIIs have subscribed for the FPO which indicates these investors strong expectations of a turnaround and hence owing to these DIIs the liquidity shall remain healthy and steep correction remains unlikely. The way forward for the bank continues to see as that of dark clouds before the sunshine.
The firm has been able to raise this survival capital but COVID led challenges have deepened the woes for the bank. As the entire sector is expected to witness low growth in book size, reduction in recoveries, decline in NIIs, NIMs and increased slippages the near term outlook for Yes Bank continues to be challenging.
And a lot now depends on overall economic health rather than management's capability to steer around, albeit ones looking for a turnaround story and a multibagger kind of growth with accepting the risk of ending up with pennies on the dollar return on the downside may choose to stay invested/pour in fresh capital.
Q: Given the 79 percent subscription to Rossari Biotech, do you expect a bumper listing?
The agro chemical space is a niche one and Rossari's peers continue to trade at premium, owing to the fact that Rossari's key clientele is across FMCG, Apparel, Poultry and animal feeds industry.
In the near term, it is one of the key segments - FMCG is expected to deliver strong outperformance while Poultry and Animal feeds industry are going to remain muted while Apparel is expected to hit hard, owing to which we do not expect the firm's performance to remain rangebound in term.
This coupled with the fact that that stock is listing at a discount to its peers in terms of valuation multiple, one may choose to book profits on listing day or in a couple of days of listing and await for a better price point to enter again around Q2 results/ on any major market driven fall as we believe the firm is poised in right segments for delivering a strong growth over medium to long term.
Q: Given the current consistent up move in the market, what should be investors'/traders' strategy?
Buy on dips and sell on rise seems to be the best strategy looking at the current trend till market reaches/cross 11,300-11,500 levels, post which one needs to trade with caution with long only bets.
Q: What are your top ideas with a one year view, that can sustain its performance in every fall or remain evergreen for portfolio?
Poddar Pigments has the unique distinction of being the first company in India to manufacture masterbatches for dope dyeing of polypropylene, nylon & polyester multifilament yarn/ fibers. PPL has an equity capital of Rs 10.61 crore supported by reserves of Rs 177.56 crore. It has a share book value of Rs 197.14 with a price to book value ratio is just 0.93x which is highly attractive. For FY20, the PAT zoomed 28.48 percent to Rs 21.25 crore as against Rs 16.54 crore on sales of Rs 356.67 crore fetching an EPS of Rs 20.03. At the CMP of Rs 183, the stock trades at a P/E of just 9.1x. Company is setting up a new plant at Chaksu. We are recommending a strong buy for medium to long term.
Multi Commodity Exchange of India (MCX) is India's first listed, national-level, electronic exchange. It is also the first exchange to introduce commodity options in India. In the financial year 2019-20, the market share of MCX was at a record high of 94.01 percent. For FY20, it reported 61.72 percent higher PAT of Rs 236.50 crore on 24.70 percent higher income of Rs 374.15 crore and an EPS of Rs 46.48. At the CMP, the MCX share trades at a PE ratio of 29x. Company recommends a 200 percent dividend for FY20. Mutual Funds hold 21.40 percent and FPIs hold 32.58 percent and other DIIs hold 17.92 percent stake in this company. We are recommending a strong buy for medium to long term.
Sun Pharma is the world's fourth largest specialty generic pharmaceutical company and India's top pharmaceutical company. Its global presence is supported by manufacturing facilities spread across 6 continents and approved by multiple regulatory agencies, coupled with a multi-cultural workforce comprising over 50 nationalities. During FY20, its operating profit has grown at 10.82 percent to Rs 6,989.76 crore and PAT has grown at 41.25 percent to Rs 3,764.93 crore. During FY20, its sales has grown 12.98 percent to Rs 32,837.50 crore. Stock is looking highly explosive at CMP for positional traders and investors. We are recommending a strong buy for medium to long term.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.