Govt making right moves; buy both HDFC stocks: Malkani

In an interview to CNBC-TV18, Jagdish Malkani, member, NSE & BSE says the Government is making all the right moves to boost the market sentiment in the run up to the Union Budget 2013.

"As of now, the government is doing all the right things led by our able finance minister. The right talk is coming out, there are confidence building measures, and the Reserve Bank of India (RBI) cooperated last week," he says.
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Malkani is bullish on HDFC Bank and says it is an evergreen stock. "That is a short-term call and going forward, a good opportunity. It is equally true for its senior peer HDFC Limited. So, in the short-term itself, these pose a very good opportunity in the large cap space," he adds.

Below is the edited transcript of Malkani's interview to CNBC-TV18.

Q: Do you believe that there could be some buying in the markets in the run up to the Budget? Sectorally, which are the pockets that you would be most favourable on right now as we head into the Budget?
A: I am a little bullish. As of now, the government is doing all the right things led by our able finance minister. The right talk is coming out, there are confidence building measures, and the Reserve Bank of India (RBI) cooperated last week. One can see that even the government is putting its best foot forward just to see how the Jet Airways deal is going forward. So, there are various things like that on the domestic front and a build up to a pretty reasonable Budget. The finance minister has been on a road show globally and talking the right talk. Globally also, there isn’t a lot of scary stuff. Ofcourse, last week the US’ gross domestic product (GDP) fell off. That was more a blip and it was to do with fall in defence spending. Q: If you have to give us some ideas either as investment or as a trading call, what would they look like a couple of them?
A: It would be straight away the two HDFCs. The evergreen HDFC Bank in the private banking space crossed over Rs 700 and it has now ended at Rs 640. I don't see how Kotak, Yes Bank, Axis and ICICI are making major recent year or life time highs while this blue-chip, that continues to pound out 30 percent growth, is not doing the same. So, that is a short-term call and going forward, a good opportunity. It is equally true for its senior peer HDFC Limited. There is nothing wrong with the results and all the embedded value and even HDFC Standard Life has its issue. So, in the short-term itself, these pose a very good opportunity in the large cap space. Q: You have Bajaj Finserv in your portfolio as well, but apart from that if you had to give us one or two midcap ideas for next week what would they be?
A: Cummin’s came out with pretty decent numbers after expectations of poor exports etc. It came off on Friday due to some profit taking. It is a great investment call and even in the short run, I see it being very favourably priced. Another stock idea could be Tata Global. It is a little expensive if you look at its earnings per share (EPS), but it has got a lot going for it in all its categories. It is going to make a big foray in water and its brands,  Tetley, Tata Tea, Tata Cofee and then Starbucks alongwith its Pepsi joint venture (JV) are all doing pretty well. So, I think that is another good opportunity.