Deven Choksey of KR Choksey Investment Managers shared his reading and outlook on market in an interveiw with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Below is the transcript of the interview.
Sonia: This week we have seen the market give up a lot of gains especially in some of these heavyweight stocks, names like Tata Motors, State Bank of India (SBI), ICICI Bank. Do you use it as an opportunity to buy more stocks or do you think that in the due course of the next couple of weeks you will get better levels?
A: Many of these companies, which you have mentioned, I think they hold better prospects at this point of time particularly companies like Tata Motors. On one side they are sitting on a good possibility of having lower input cost because of the fall in the metal prices and on the other side the improvement in the demand is being seen in the domestic market both for commercial vehicles as well as for the passenger vehicle portfolio.So, to a greater extent, I would like to believe that Tata Motors -- with the valuation in favour of investors at this point of time -- remains a good choice as well. Jaguar-LandRover (JLR) portfolio promising a lot with the new models coming up in this quarter and the subsequent quarters. So, I would think that Tata Motors could be a decent choice to add into the portfolio.
Sonia: What is the sense you are getting about these technology names? Is this the place that everyone is hiding into now because of the volatility and any fresh ideas there?
A: Generally, we have seen that whenever the rupee flips, the favour comes back to the IT company. Nothing has changed fundamentally and I would think that things are only looking good for some of the companies. With the strategy which Infosys is particularly following, I would think that this is one company, which remains relatively stronger compared to others in the IT pack at least at this point of time. Both Infosys and Tata Consultancy Services (TCS) have adapted early to the new strategy of acquiring some of the target companies and probably grow the digital space significantly. So, we remain confident in both these companies for long-term investment. Not too sure whether we have immediate ideas on the short-term side, but for the long-term purpose these two companies remain in favourite list.
Latha: Yesterday and today we have seen a bunch of companies, midcap companies announcing their numbers with some rapidity. Anything that stood out for you? There were not so many midcap companies announcing brilliant numbers. But the good ones were few and far between. It is otherwise quite a bit of sea of losses. Anything that stood out for you in the midcap space?
A: I am not sure about yesterday and the names, which you have mentioned. But generally I have seen a good set of numbers coming in from a few of the companies within the non-banking financial companies (NBFC) space. Agro-chemical space, that is where I have seen a good set of numbers coming in. I think you are right that they are few and far in between and not too many companies have come up with a decent set of numbers. Certainly, I would keep an eye on the space where you have got a larger amount of interest, which is insurance within the NBFC pack and that is where I believe the companies, which would probably bring the value addition into the market.
Sonia: Let me just spot two companies for you that did a decent quarter, one is National Buildings Construction Corporation (NBCC) so there the income growth was about 37 percent, the profit growth was 36 percent and NBCC is up 4.5 percent in preopening and the other one was IRB Infrastructure. In an environment where a lot of infrastructure companies are under pressure IRB Infrastructure saw a decent 20 percent revenue growth and about a 10 percent profit growth. The numbers came during market hours yesterday but any of these names that would interest you?
A: NBCC definitely remains in the favourable list. Given the kind of pipeline of the order book that they enjoy, the visibility is relatively on the higher side. Quarterly numbers, we do give weightage, but largely, the visibility for at least two years from now is remaining on a higher side as far as the business is concerned. So, that company would remain in a favourable list.
Latha: Yesterday we also saw a decent set of numbers coming in from Tata Power Company. Anything in the largecap space that has surprised you with a better than expected performance?
A: By and large, the companies have been reporting decent set of numbers in some of the infrastructure oriented businesses. They are not going down from where they were. To that extent, I would remain positive on likes of some of the infrastructure companies particularly in the capital goods segment; the likes of Larsen and Toubro (L&T), which I was about to mention, where I believe that the visibility is remaining on a relatively better side.Given the kind of inflow that they have and given the kind of traction that they are seeing, may be some quarterly results may give some amount of downside as far as the numbers are concerned, but the fact is that the company remains relatively on a stronger wicket. So, certainly, would like to consider players like L&T in this particular space within the largecaps.
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