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26 Aug, 2025 12:21

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Indian markets are expected to remain volatile ahead of the expiry of derivatives on Thursday and given the anxiety over the so-called US "fiscal cliff" negotiations at a time of thin volumes. Developments in the US fiscal cliff talks are expected to especially affect software service exporters such as Infosys and Tata Consultancy Services .

Moneycontrol.com got Pankaj Pandey, Head Research at ICICIdirect.com to answer the stock queries readers sent us on our Facebook page as part of our KYI (Know Your Investment) initiative.

Below are his views on various stocks and sectors:

Nikhil Gupta: What is your view on L&T?

Pandey: L&T has been the best performing index stock this year. It has delivered on the orderbook guidance. Maintain positive stance with a target price of Rs 1,840.

Rahul Kumar Sharma: What is your call on Tata Motors?

Pandey: JLR continues to do well and also the product pipeline appears promising which is likely to sustain growth. On the domestic front LCV doing well but M&HCV and PV segment is struggling. JLR is likely to anchor performance going forward. It is buy and we are about to raise its target price. 

Madhavi Km: What about Reliance Capital?

Pandey: The company businesses are at leadership positions like AMC, life insurance, etc however valuations remain muted.  Post the news expected on FDI in insurance, some upgrade happened and proceeds of stake sale. You can accumulate the stock at corrections at ~ Rs. 400-420 levels for strong returns over 1 year timeframe.

Kumar Vikas: Why is ITC falling continuously?

Pandey: The continuous fall in ITC is on account of FTSE global equity index rebalancing. FTSE reduced the free-float weightage in ITC to 24% from 75% leading to sale of approximately 36 million shares, worth USD 200 million on 20th December, 2012. This cut by FTSE Global Equity Index has had a sentimental impact on the stock leading to the continuous fall. The revision is a result of changes in the underlying shareholder ownership with no fundamental underlying reason; hence we continue to remain positive on the stock.

Jalaj Anand: Should I buy J&K Bank and LIC Housing?

Pandey: Its credit is expected to grow at 20% levels for atleast 2-3 years to come. Its NIM of 3.9% is amongst the best in industry while its asset quality is stable with GNPA of 1.6% and NNPA of 0.2%. The valuations are cheap (1.1x FY14E consensus ABV) for the bank with attractive return ratios of RoA at 1.5%+ and RoE at 20%+. You can buy this stock

LICHF - Expected capital infusion via QIP (approximately Rs 1,200 crore), healthy demand for individual housing loans, steady asset quality and high return profile leave limited downside risk. Available at 1.8x FY15E ABV, you can buy this stock with a target price of Rs 340

Chiranjeevi Pannem: What about BHEL?

Pandey: Visibility for order inflows and revenue growth has been a key area of concern for BHEL and it is here to stay at least in the medium term. Valuations are attractive compared to historical standards. Would advise to hold for long term with a positive bias 

Bax Nathani: What is your view on Kingfisher Airlines?

Pandey: It is better to avoid since it is news flow driven. The company is struggling with severe liquidity crisis. The company is left with only 6-7 aircraft as most of the aircraft have been taken back by the lessors. Prefer Jet Airways and Spicejet with a target price of Rs 55 and Rs 710 respectively. ATF if get the declared good status, margins would improve substantially

Vipul Joshi: What's your long-term target for Tata Steel and BGR Energy?

Pandey: Would maintain a cautious view on the company’s overseas operations on account of global macro headwinds. Tata Steel Europe is likely to continue its subdued performance and is likely to be a drag on overall performance of the company. Though valuation wise it is cheap but still not a portfolio stock. 

On BGR, expect a flattish performance by the company over the next 15-18 months; hence the stock is not likely to go anywhere. The company has won good oderns but with weaker margins. Expect return ratios to deplete going ahead. 

Riyas Eruvath: What about Apollo Tyres?

Pandey: Apollo Tyres remains a strong stock to own if one wants to play the auto ancillary space with strong earnings growth possibilities(CAGR approximately 35% FY12-14E) aided by both domestic and subsidiary business. However, recently since possible QIB announcement an overhang has been created of a possible approximately 15% earnings dilution.

Gurmeet Sadiora: I have a 1,000 shares of Punj Lloyd at Rs 135. What should I do now?

Pandey: The performance is improving but unlikely that you would be able to recover your cost in the medium term

Krunal Thakkar: Should I buy gold at current level?

Pandey: Gold has delivered positive returns in the last 12 consecutive calendar years delivering 17% CAGR returns which is unprecedented for any asset class. What ever positive underlying factors for which generally Gold is bought for has either happened or is expected to happen like loss of faith in other asset classes, chase for safety, sharp Indian currency depreciation, non-performance of other asset classes, central bank buying etc.

The simple laws of averages suggest that gold in all likelihoods may not deliver similar kind of return which it had delivered in the past. It is better to follow a SIP approach so as to accumulate at all levels rather than investing lumpsum at near all time high levels.

Setu Lagna Vadodara: What about Sun Pharma?

Pandey: One the best performing and expensive stocks in the Pharma stocks. The company has delivered 51% growth in H1FY13 as against the 30-32% growth guidance. Good portfolio stock but expensive

Afroz Alam: I have 500 shares of DB Realty at Rs 52. What should I do now?

Pandey: Don’t track the stock, would prefer less leveraged players like Oberoi, Mahindra Life and Shobha in the real estate space

Arvind J Padature: I have 8,000 shares of Shree Ashtavinayak Cine Vision at Rs 3.33. Should I hold it?

Pandey: The operating performance of the company remains weak with the company reporting loss in Q2FY13. Also, with no visibility of good movies in the near future, the view remains negative for Shree Ashtavinayak. You may exit the stock.