Know Your Investment: 11 short-term picks for good returns
Moneycontrol.com got independent analyst Ambareesh Baliga to answer the stock queries readers sent us on our Facebook page as part of KYI (Know Your Investment). Check out his comments.
December 09, 2012 / 14:46 IST
The Indian market is on a strong wicket with reforms being initiated by the government. The Sensex ended 62.70 points down at 19,424.10 on Friday. The Nifty shaved 23.50 points to close at 5,907.40.
Moneycontrol.com got independent analyst Ambareesh Baliga to answer the stock queries readers sent us on our Facebook page as part of KYI (Know Your Investment). Check out his comments.Also read: Sensex may see 22000 by March 2013, says Sanju VermaHarshad Deshpande: Which are your top five stock picks for short-term?A: I would buy Reliance Industries, Tata Steel, L&T, M&M and Bharti Airtel among the largecaps and Talwalkar, Mahindra Holidays, IL&FS Transportation, Dishman Pharma, Exide and Jain Irrigation among the midcaps.Rahul Arora: I have 50 Apollo Tyres shares at Rs 93 each. What should I do? A: Tyre stocks should be held for the next one-two years. There a couple of issues dogging the sector in the last few years – cheap imported tyres being dumped in India, rubber prices touching life time high. Most of the capacity was being used for OEM supplies to the vehicle manufacturers where the margins are comparatively low. Replacement market was yet to boom. The tyre prices were not keeping pace with the increase in input costs. The scenario has changed in the last few months. Rubber prices have seen a steep decline and expected to remain soft. The replacement market is expected to boom with record number of vehicles sold in the last few years coming up for replacement of tyres. And the product prices need not be brought down in tandem with the raw material cost, thus contributing to increased margins. In addition to Apollo tyres, I would also suggest you to buy Ceat. Manish Jain: What is your call on Unitech and L&T Finance?A: Strangely market rewards those companies which try to correct their course after meandering into the wilderness. Same is the case with Unitech. It went overboard in the realty sector and built up highly leveraged balance sheet and got too ambitious to invest in an unrelated area like telecom. After having burnt their fingers, they are trying to find their way back into their core competence. Whether they would be successful or not, only time will tell. The market is currently giving them an initial thumbs up. The stock could move to about Rs 37/38, but to move beyond that, the sustainability of the revised model needs to be proved. L&T Finance is a much better bet, a known pedigree with deep pockets and following the right strategy. It is expected that L&T group foray into banking would be through this entity. The stock has moved up sharply in the recent past, nearly a 100 percent appreciation. Hence, I would suggest you to wait for a correction.Chandrayee Sarkar: Is it right time to invest in Heritage Foods India Ltd?A: Not, after it has appreciated 100 percent in the last three months. Just because a savvy investor has bought at current levels does not merit a blind buy. Even savvy investors make mistakes. The branded retail story is taking shape, but wait for a correction to around Rs 400/410 levels. Kishore Tirumala: I have 1,500 shares of GTL Infra at Rs 13? Can hold for long-term?A: GTL Infra could get some perk up due to Bharti Infratel IPO. The financials are in bad shape. I wouldn’t recommend this as an investment. When you invest in a stock, you should first check whether the management is dependable or not. And there is no reason for us to believe this since the last 10 years. Yousuf Sheikh: I just purchased Moser Baer for Rs 8.28. What is the prospect for this scrip?A: A company, which is into sectors such as storage media and solar power, which face rapid technology obsolescence and is unable to cope up with the same should be avoided at any cost, can only lead to destruction of shareholder wealth. We have seen that happening in the last few years. Don’t expect any major change and thus avoid. Since most of the controversial stocks have started moving in the recent upmove, this could also show some positive move based on various rumours floating in the market. Utilise that and exit.Pankaj Srivastava: What is the six-month target of Bharti Airtel? A: I expect Bharti to move to about Rs 360 in the next month or two. The government has slipped badly on the spectrum pricing and now they have decided to slash it further by another 30 percent. That is a moral victory for the telecom sector. Secondly, the Bharti Infratel issue could be another reason for the sentimental upmove on listing of the IPO. I also expect them to report better numbers in December as the rationalisation effort of the last few months will start paying dividends. Lastly tariff revision will be a trigger to take it up further. My six-month target is about 410 to 420.
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