Mkt consolidating at current levels, good for near-term: Expert

On the banking sector he said that corporate lenders are cleaning up their balance sheets and sees banks doing well once the economy picks up.Below is the verbatim transcript of Jyotivardhan Jaipuria’s interview to Prashant Nair & Ekta Batra on CNBC-TV18.Prashant: What do you make of the market? As far as market goes do you think we are stalling a little bit in for a phase of consolidation?A: Market is at a stage where probably it is consolidating now and that will be good because we have had a major rally from the February lows and market could do with a bit of consolidation. It is good in near-term if we get that consolidation. Near-term probably the focus is going to be on global events.Ekta: Talking about the midcap Index we were just having a detailed discussion about Bajaj Finance and that may be the consumer durables portfolio might be a bit of a concern going forward. Do you think or would you be a buyer in Bajaj Finance knowing about that and do you think that it still deserves the hefty valuations that it already trades at?A: I can’t talk stock specific but in general lot of these non banking finance companies (NBFCs) have had a great run and we are finding lot of them now quite fairly valued. There are still companies which will deliver very good earnings over the next few years but probably the valuations are starting to price that in so the margins for errors is very limited in these now.Prashant: The other big consumer durables lender is Capital First again a phenomenal winner in terms of what the stock has done? Would you say the same about that one as well and also a host of other consumer finance companies may be not in the durable segment, but broadly in the consumer finance space?A: If we just take the whole NBFC in the consumer finance space and the Micro Finance Institutions (MFIs) space they have all done very well in the last four-five months. So, these are stocks which you want to buy and just these will keep growing earnings when they will compound earnings probably at 20-25 percent. Most of them are no longer cheap so now you are struggling to find value in some of these. What you have to do is like you have to buy those hope for a bit of pullback in them and buy some of these stocks.Ekta: Wanted your thoughts in terms of a couple of these midcaps pharmaceutical stocks, Jubilant Life Sciences -- I know you can’t talk stocks in specific -- is up 6 percent odd, Glenmark Pharmaceutical is up around 3 percent, is there more room or more juice in terms of valuations at least within the midcap pharma?A: Pharma become a very stock specific sector now because what we are seeing is some of the companies are doing well and some of them are struggling. Partly, it has to do with where their approval status has been. Some of the smaller ones are probably going to outperform the bigger companies now because I think their base is bigger and they are doing the same things which lot of the big companies did four-five years ago. So, relatively in that space I prefer smaller companies to the larger companies.Prashant: What about Maruti Suzuki, phenomenal set of numbers? Could one take a two-three year kind of view from here on Maruti Suzuki and say I am going to exit at Rs 10,000 on that one or do you thing that is too tough? They are doing very well.A: In general I like auto space and I like it because I guess lot of us have spoken about it. One is interest rates are coming down, the pay commission is -- money will come to people and as income pick up you are going to see more and more people moving to buying a car. So, to that extent I like two-wheeler space and entry-level cars will probably do well.If you ask me over the next six-nine months, the tractors probably will become most attractive of the space because that is coming for the very low base. You have had two years of negative growth in tractors and that is where you will see month-on-month numbers looking very good in terms of dispatches and sales.Ekta: We still have ICICI Bank, which is due for its number next Monday, it is on the November 7th, after Axis Bank are you concerned about a couple of these corporate lenders?A: The way I look at these corporate lenders is two things -- one is they are cleaning up their books partly because of the force by Reserve Bank of India, so the books are getting cleaned up. So at least if everybody takes up big NPL hit we then know that this is like an actual book. It is a more realistic picture of the book value than what we had couple of years ago. So to that extent you can then price that accordingly.The second thing is these will do well if we get the economic recovery, which I am expecting. So, if we get that economic recovery coming through then we are probably going to see lot of these companies, which on the margin are not doing well improved their cash flow, improved their earnings and to that extent two years later the book may not look as bad as it did.Probably, what we are seeing is after long time people selling assets, so that is a positive where asset sales are happening both from the inclination of promoters to sell the assets and a buyer coming up from these assets.