Use market fall to buy well-liked stocks: Motilal Oswal AMC

As Indian equity market continues its struggle to stay in green, it is quite enthusing to see how individual and retail investors are participating in every fall of the market, says Taher Badshah of Motilal Oswal AMC. “So, that is a very welcome sign and it is good for us as well because it gives a chance to buy some of our well-liked stocks and companies in this bout of correction,” he tells CNBC-TV18.On the back of this, the market is not headed for a significant crisis, he says adding, “We will be part of this global sell-off and the volatility to the extent that it lasts for in the near future but we have got quite a lot of levers for ourselves.”Citing external conditions to be ‘uncontrollable’, he says investors should utilize the fiscal and current account space to accelerate domestic growth and corporate earnings. Meanwhile, Hemant Thukral of Aditya Birla Money says market is going over-hedged and recommends Nifty 7,500 Put at Rs 120-130 premium. By putting a stop loss: 7,680, he believes Nifty may rebound to 7,950 due to over-hedging and anticipation of further fall.He also recommends selling Kotak Mahindra Bank with a target of Rs 588 and a stop loss of Rs 625. Another sell call is on the Tata Motors- DVR with a target price of Rs 212 and a stop loss of Rs 232, he says.Below is the transcript of Taher Badshah’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: What is the sense you are getting from people you spoke to and your clients, markets fallen enough, is there a selling exhaustion? Will we see support within a 100 point range? A: If we were to just go by the kind of fund flows that we are seeing at least on the domestic mutual fund side for the industry as a whole as well for us, I think it is quite enthusing to see that individual investors and retail investors, etc are participating in every fall of the market in the more recent dates. So, that is a very welcome sign and it is good for us as well because it gives a chance to buy some of our well liked stocks and companies in this bout of correction. So, going simply by that I don’t think we are headed for a significant crisis. We will be part of this global sell-off to the extent and the volatility to the extent that it lasts for in the near future but we have got quite a lot of levers for ourselves. For us external conditions are uncontrollable so we should as a country and as an economy we should try and focus on what we can do. We have a lot of space created for ourselves in the fiscal as well as on the current account. We should use that to start getting some of our domestic growth accelerated and which can then translate into corporate earnings. So, we are happy to see the kind of flows which are happening and that is a welcome sign. It gives a lot of encouragement to the overall market as a whole.Sonia: Just to drill it down to individual spaces, what is your view on the auto sector now because this month the sales have been very unimpressive, in fact, a behemoth like Maruti Suzuki has seen just a 6 percent growth. Would that worry you or do you think that this is just a passing phase and one should still continue accumulating auto stocks? A: I think auto still remains reasonably good sector as a whole compared to many other sectors today. However, within that we are seeing quite a lot of divergences but also continuation of the same trend. So, while Maruti, the growth in this month was 6 percent, one should remember that the last month was a fairly high number. So, at some level it evens out. 6 percent too is not a bad number. There are certain base effects also on high frequency data which shows up so perhaps there is not much to read into it. We think the overall trend for the conditions for growth for the company are great. So, if currency remains reasonably under control, they should benefit. There are certain underlying trends within autos which are continuing so within two wheelers we are seeing a shift from motorcycles to scooters; not just Hero MotoCorp but Honda Motors and TVS and all the others have shown very slow motorcycle sales. In contrast, scooters have done pretty well, high-end motorcycles have done pretty well. So, commercial vehicles (CV) we are seeing continuing growth in the heavy commercial vehicle (HCV) side. So, these are some sub segments of growth within the overall sector and one should keep ourselves positioned from a portfolio perspective to play these growth rates which are coming our way.