Stay with L&T or BHEL in infrastructure space: Baliga

According to Independent Analyst Ambareesh Baliga, it is better to stick with the bigger boys like Larsen & Toubro or BHEL in infrastructure space.

Baliga told CNBC-TV18, “The corporate governance issue of HDIL is something which the markets cannot digest. We have seen in the past that wherever such issues come up, those stocks and sector overall get thrashed. Going ahead, I do not think the market will ever pardon any promoter or any management, who has corporate governance issues.”

“In case of IVRCL, the case is similar to HDIL. Stock like HDIL, IVRCL and Opto Circuits have corporate governance issue because of which they have been cracking. However, among these, I would be slightly more positive on IVRCL as compared to HDIL,” Baliga added.

Baliga also said, “Stocks like IVRCL, Nagarjuna Construction are best ignored for the time being because you have other infrastructure stocks to be bought which are still quoting at extremely good valuations. Even the larger ones like Larsen & Toubro (L&T) or Bharat Heavy Electricals Ltd (BHEL) are quoting at decent valuations with hardly any risk. In this kind of market, it is always better to go with those stocks than with the ones where there is a problem and are hoping for a turnaround. So, it is better to stick with the bigger boys.”