See Nifty between 6800-7000 in Apr-May; buy Exide: Baliga

A: Market is bullish and the interest is now shifting to the midcaps and the smallcaps. In the last few days, the index is where it has been for a while whereas you have the midcap and the smallcap stocks shooting up and that is what you will again see in January series. We could cross the earlier highs but whether it will reach levels of 6,800-7,000, not immediately but that is the level I see sometime around April- May. Until then, it will be a slow move as far as index is concerned, but you will have the midcaps and the smallcaps flying.

Q: What would you be bullish on? We have seen December contract being kind to some of the capital goods, the Cummins, Voltas, where is your affection in that space?

A: In capital goods and infrastructure, I have been recommending IL&FS Transportation, Crompton Greaves, Voltas that have performed decently well but I continue to see that move up among banks in smaller ones, we are recommending Development Credit Bank. In auto ancillaries, I have been talking about Exide, which has just started moving and I have a price target of Rs 160-170 on the stock.

Q: Do you track Amtek Auto? The group has gone ahead for another acquisition in Germany, any thoughts on that?

A: I have not been tracking Amtek Auto but overall on the auto ancillary space, we have been quite positive especially from export angle. However, other stocks that I had recommended like Bharat Forge and Motherson Sumi Systems, have done decently well especially Bharat Forge in the last few days and that continues.

Q: Do you think it is too late to get into Apollo Tyres now? It has crossed Rs 100 and what would be a slightly longer term view on that?

A: The other tyre stocks have moved decently well, Apollo got stuck because of Cooper Tire deal. If Apollo is able to move out of that deal, which will be confirmed in the next four-five days, you will have one spurt and this can go to levels of Rs 110-120 but whether that will continue, I think there is a bit of a question mark there because this whole deal puts a question mark on the management and the risk they took without thinking much on that. And that is what will put a question mark on the management. So, I do not see runaway rally in Apollo but because of this you will have a spurt.

Q: Do you see more gain in Bharat Heavy Electricals (BHEL)?

A: BHEL is doing some catch-up because being an under performer for quite a while and the way Larsen and Toubro (L&T) has moved, you will see some catch-up from BHEL. It can move Rs 15-20 from here but is not a great investment stock at this point of time. It is more of a trading stock.

Q: Do you think its time to take profit in banking stocks?

A: Traders yes, possibly time to take profits and re-enter at lower levels but investors should hold on and ripe the rally for the next four-five months because all these stocks especially the banks, there is still an upside of about 12-15 percent for these stocks over the next couple of months especially the public sector undertakings (PSU). Therefore, one should hold on.

Q: The government seems to be in a mood to do something in its last leg; after there is a change of guard at the environment ministry and now reports suggest that oil ministry is gunning for a higher diesel increase per month. Would you play on that news, your views on oil stocks?

A: I have been positive on oil stocks for last couple of months, in fact I recommended Hindustan Petroleum Corporation (HPCL) about Rs 175-180. I am still quite bullish on that, looking at levels of Rs 270-280 for that stock. However, for Indian Oil Corporation (IOC), I will wait for the possible follow-on public offer (FPO) and so, I will not pick IOC, but HPCL at these levels.