Sanjiv Bhasin of IIFL recommends buying ITC, Pidilite Industries on decline.
Sanjiv Bhasin of IIFL told CNBC-TV18, "There was too much of pessimism and lot of negative sentiment after the Budget. ITC made a very big three year bottom and has moved up sharply. I was just hearing a comparison on valuation discount and that needs to be corrected on the upside. We have a buy on the stock on any decline closer to that Rs 310-320 level. Because of the uncertainty of the pictorial representation, we think year end target could be closer to Rs 317 rather than Rs 330. So, we have a buy on any decline. This can be an outperformer in the second half of 2016."
"Look at the consumption theme. Aside from the autos on the discretionary side you are seeing across the board a lot of midcaps showing you a lot of traction and that space is something where there is going to be a stock selective action and that could keep getting updated on the upside. So, yes, Pidilite Industries on any decline would be a buy and a whole host of other stocks mainly in the midcap section on the consumption side looks very interesting," he said.
"Taking the last two three days three stocks stood out. One was JK Lakshmi Cement. We have had a buy rating on that. Excellent numbers, very reduced input cost and that has increased the margins and definitely the second half will see the stock getting rerated on the upside."
"The other two would be the standard consumption electrical plays, particularly Havells and Voltas which we think will also reflect the extreme summer heat and we think there is a lot of upside in both those stocks given they have expanded margins. Havells have shown that Sylvania divestment has held cash back on the balance sheet, return on equity (RoE) and we think come the second half where the consumption OROP and the seventh pay commission money actually changes hand these would be standard beneficiaries. So, these three stocks you can add an NBCC which is one of the best plays on the public sector undertaking (PSU) side of the construction side which we feel can get rerated in the next six months for a target of close to Rs 1,500."The Great Diwali Discount!
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First Published on May 21, 2016 10:17 am