Infosys margins can outperform ind; cautious on mkt: Dolat Cap

The next few months can be highly volatile for the Indian equity markets despite economy getting better domestically, says Amit Khurana, Co- Head Equities and Head of Research, Dolat Capital.In an interview to CNBC-TV18, Khurana says his near-term stance on market remains cautious on the back of worsening global situations and prefers being more stock-specific rather than considering macro factors alone.On the earnings section, he says Infosys could become the leader in coming quarters and could outperform the industry in terms of margins. However, there are enough headwinds for the company particularly in terms of pricing. On Reliance Industries, he expects the company's third quarter numbers to be in like with market expectations. Below is the verbatim transcript of Amit Khurana's interview with Ekta Batra & Anuj Singhal on CNBC-TV18.Anuj: You have seen the numbers from Infosys and the stock reaction. Do you think Infosys can be the leader for the market over the next few quarters? A: Let me put it this way - from the trajectory side it could very well outperform on margins. However, our take is slightly different that we still believe that there are enough headwinds on the pricing side. We believe the pricing environment will deteriorate over the next few months and there will have to be some balancing act done by the large vendors, Infosys included to manage the pricing and the business mix and so while they will probably have better performance relative to the sector but on absolute level the challenges still remain. Ekta: One stock that I am interested in in terms of numbers is Reliance Industries. It releases numbers on January 19. What is your expectation considering that the stock is already at 18 month high? What is the street expecting from Reliance's Q3 numbers?A: We do not have official estimates for the company but from a qualitative level the quarter should be in line with market estimate. The more important part is to see how this quarter and the next quarter works out and that's where the real effect of the capex cycle will start playing out. So probably Q3 will be in line with the market estimate. We do not see any significant deviation from that.Anuj: What about the overall texture of the market. How would you approach it especially in the broader market where we have seen big gains all through last year but the start of 2016 hasn't been good?A: Our sense is that the next few months will be seeing heightened level of volatility - that will remain an important factor to watch out for. There will be two slightly contradicting factors. One, domestic factor, which seem to be getting better because we have seen some significant order book gains by some of the infrastructure companies, we have seen the gains happening on the power front. So there is a lot of ground level work at the domestic policy level which is happening, which should start showing up over the next few quarters. So put that against the global factors which seem to be worsening and therefore there is a balancing act going on in the market place and we will have to wait and watch as to how it plays out over the next few weeks and months to take a call but our near term stance on the market remains cautious with higher level of volatility and being more stock specific in terms of liking themes rather than macro stories to play around with.