The changes in the Nifty that will be effective from March 27 will included stocks such as YES Bank and Idea Cellular. Yogesh Radke, head of quantitative research, Edelweiss Securities has a positive view on YES Bank with short-term target price at Rs 885. Fundamentally too the bank is doing well as far as asset quality concerns go, he says.
Idea, however, has not been performing too well over the last couple of days. Fundamental concerns continue to plague to stock, according to him.
Below is the verbatim transcript of Yogesh Radke's interview with Reema Tendulkar and Nigel D'Souza on CNBC-TV18.
Reema: One of the two big movers today on the Nifty in the gainers side, you have got Idea Cellular as well as Yes Bank while on the losing side you have got DLF and JSPL out all this on the back of the Nifty changes which have been effected. Your thoughts and can we expect more of a movement in any of these four stocks based on their inclusion as well as exclusion?
A: Yes Bank has been included and Idea has been included in Nifty effective from March 27. I believe that Yes Bank would have further positive momentum. We hold a positive view on the counter with a short-term target of Rs 885. Even fundamentally the company is doing well with limited asset quality concerns and focus on the retail business which will help them deliver better than the average growth of the industry. So, even on the fundamental we hold a positive view.
Nigel: I was just looking at the last changes that happened that was with regard to Zee. Now that one did a big outperformance in comparison to the Nifty, Zee gave returns of around 25 percent if you compare it from August 2014 till date while the Nifty is up only 11-12 percent. Do you expect more of the same on both these two counters or do you think the reaction would be far less?
A: Zee was a slightly different case which was simultaneously also getting included into one of the other major indices which was the MSCI. So, Yes Bank surely will have further upside but comparison with Zee would be slightly different. However, as I said in the beginning we hold positive view on both the counters there.
Nigel: Idea has been an underperformer over the past few months. What kind of positive impact can bring to this counter purely on the basis of being included in the Nifty; let us keep the fundamentals aside because that one has been seeing a lot of selling pressure. Even as we speak the stock is not higher by more than a 1 percent or so?
A: As you rightly said, there are fundamental reasons for the stock not performing last couple of days. Inclusion in Nifty would have some support to the counter but you need to watch out the telecom auctions which are scheduled by March 4 and that will be a key for the counter to move.
So, inspite of it getting included in Nifty, there would be some amount of pressure because structurally there are things which are keeping the counter under pressure.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
