'Godrej Properties, Sobha & Oberoi Realty can fetch good returns in short term'

The rally in the real estate sector started with GST rate cuts on under construction properties announced a few weeks ago and some part of the rally was in the hope of demand revival for the sector, Prakash Pandey, Director, Fairwealth Securities, said in an interview with Moneycontrol’s Kshitij Anand.

Edited excerpts:

A) Here are some reasons for Nifty Bank rally:

1. Opinion polls are predicting NDA/Modi winning 2019 upcoming General Elections

2. FIIs are turning bullish on India; they have invested Rs 26,200 crore in the month of March.

3. RBI cut rates by 25bps in their last policy & overall dovish policy helping NiftyBank to rise.

4. Rupee trading almost near 6-month high and appreciated 7% in the last few weeks, giving a huge boost to our debt markets, bond yields and FII flows.

5. Lower CPI inflation will help RBI to cut the rates further.

6. FIIs' love for Indian banking stocks is known to the world, FIIs are buying HDFC Bank, ICICI Bank, Kotak Bank & Axis big time, these 4 stocks having the weight of more than 75% and buying in these 4 stocks helped Niftybank to rally over 2500 points in few weeks.

Outlook:

Bank Nifty is having a strong base around 29,000-28,800 zone and dips towards 29,000-28,900 will be a great buying opportunity for the near-term target of 30,500

Despite the recent rally, Kotak Bank seems attractive and we see the target of Rs 1,500 on the stock in the next 3-4 months.

A) The whole rally started with GST rate cuts on under construction property a few weeks ago and some part of the rally was in the hope of demand revival for the sector.

Some of the recent research reports are showing organized developers’ market share could double from 8-10 percent to 20 percent over the next five years, delivering some 30 percent sales growth CAGR.

High-quality developers with a greater focus on the residential market will benefit disproportionately from this upturn in demand.

Godrej Properties, Sobha Developers and Oberoi Realty are 3 names where we feel investors can get a decent return over the next 3-6 months.

A) Many quality mid/smallcap stocks are still offering a decent buying opportunity. However, don’t chase the momentum, do consider the valuations of stocks before buying.

SRF and RBL Bank are the two stocks, where we can earn excellent gains over 6-12 months.

A) After 900 points one-sided rally on the Nifty, we hope a rangebound activity in the expiry week. We may test 11,300 on the downside and on the upside, we may not cross 11580. Option writers, mainly Nifty call writers will have upper hand in the expiry week.

The Nifty 11000 put and 11600 call having highest open interest. If we purely go with options chain, it clearly shows that Nifty is unlikely to cross 11600 in this expiry.

A) Interglobe Aviation:

Indigo rallied almost 100 percent in less than 6 months and it is extremely overbought on daily charts. Any correction of 6-8 percent will be a buying opportunity.

But before buying any Airline stocks, always keep a close eye on Global Crude Oil Prices/ ATF prices.

SpiceJet:

Spice jet is currently trading at Rs 98 and also rallied more than 50 percent in the last 6 months. This stock can be bought around Rs. 95 levels with a stop loss below Rs 85, and a target of Rs 120.

Jet Airways is trading well below all the important moving averages and on the charts, the stock is looking weak. One should not try and do bottom fishing in these stock & also news flow around this stock is not painting any rosy picture for the company.

Remarks: One can Buy Spicejet because the risk/reward is better. However, once crude crosses $75, all bets will be off.