Macros stable now, buy on dips; like Federal Bk: PLilladher

Q: Would you recommend retail investors to buy now or would you tell them to wait and what would be your shopping basket right now if you are looking at this as a buying opportunity?

A: I would say that this and maybe little more volatility and little higher dips would be the time to definitely buy. But if you buy now then you should be little more braced for more volatility to come. I don’t think it is all just over as of now but yes, anything you get 8,000 and below maybe till 7,850 or maybe a little lower are the timings to buy.

Particularly when unlike last time when during European crisis also that Indian markets were hammered very badly our own economy was so much weak and all the macros were also so much weak that most of us remain question marked whether we will get more impacted.

This time around when we are getting butchered with the global volatility, somewhere we have more hope that the macros for India are looking much more stable, falling in place and shaping up better. So I think all these dips and volatility will be an opportunity to buy for sure.

I would recommend to remain invested or build portfolios little overweight around everything which is domestic consumption because the key theme that will play out over next year will be how the purchasing power is easing in the hands of consumer with reduction in both inflation, a bit in interest rate over the year and of course the fuel cost. So all this will lead to splurge in domestic consumption which is where investor should accumulate.Q: What are your thoughts on the aviation space?

A: After a very long time, not even at USD 55-60/USD kind of an oil but even at USD 75/USD kind of an oil, there will be some economics that will be working out if you are on a stable situation.

The traffic in India is likely to grow, there is no doubt about it. Competition has been on a decline and the fuel, where they were losing per seat, the more they fly the more they lose kind of an equation will completely change and that is a beneficial situation for the aviation sector.

Q: The last leg of market fall has come on account of banking. What are your top ideas in banking space, you have ICICI Bank, which has been falling since last two-three days, State Bank of India (SBI) has corrected, what would be your top two-three ideas in the banking pack?

A: Since ICICI Bank does have some of the businesses, which is global, maybe 15-18 percent of its balance sheet is global and whenever any upheaval happens in bond markets globally, ICICI Bank global balance sheet, global investments will be looked at with a few question marks till the time analysts get a complete hang on it. So it comes under a severe pressure.

However, overall, when we look back into their domestic business, they are poised for a reasonably good time over the next two years. Also, the insurance part will get slightly unlocked.

Beyond ICICI Bank, HDFC Bank, in midcap segment we like Federal Bank a lot and we think that all these declines should be truly used to accumulate the stock for a reasonably very good appreciation as the strong management, their focus on the right segments and the NPA cycles settling down sooner than later will re-rate the stock further in days to come.