In an interview to CNBC-TV18, Ajay Bodke of Prabhudas Lilladher shared his readings and outlook on specific stocks and sectors.Below is the verbatim transcript of Ajay Bodke's interview to Latha Venkatesh, Sonia Shenoy & Anuj Singhal.
Sonia: Last week, at the fag end of the week the banks started to participate in the market with delivery buying in names like ICICI Bank. Are you looking to top up on any banks?
A: We are positive on the banks and we believe that names like Yes Bank, IndusInd Bank and HDFC Bank should form part of the portfolio of an investor. We still slightly worry about some of the corporate focused banks and hence our bias would remain with the retail focused banks.
We are also very closely watching non banking financial companies (NBFC) space. It had a strong run before the correction that we saw. We believe that one need to wait out and see the impact especially on those NBFCs where both collection and disbursement are in cash. Hence I will be very worry in case of any sharp move in NBFCs and would look at booking profits in those names.Latha: What are you positive on in the NBFC space?
A: It is tough to envisage a portfolio construct today where large allocations towards investment lead themes -- although because of demonetisation consumption lead aggregate demand has got pushed back at least by a quarter or two, the preponderance of allocation will be towards consumption focused sectors. So sectors like auto, auto ancillaries, lower level cement and also a large allocation towards pharmaceutical names specifically some of the midcap pharma is what we would prefer.Anuj: How would you play the frontline IT stocks in terms of your pecking order? First of all do you think this sector can outperform the market after having gone through a bit of an underperformance and what are your preferred stocks here?
A: We still see a lot of headwinds facing the IT Sector. Till now we only have seen Donald Trump's announcements. We got to wait and see the actual policy implementation but if his initial thoughts were to get reflected in the policy then one does see challenges so far as the H1B regime is concerned.
However, Narayana Murthy did mention on your channel that the industry needs to look at in the medium-term to overcome excessive reliance on H1B and look at more recruitment in the local geographies where the business is done. Therefore, we still worry about putting large allocation towards IT. However, if some allocation is to be made in IT then Infosys in the largecap space and Hexaware Technologies in the midcap space are preferred bets and over the medium-term we expect a price target around Rs 260 for Hexaware and around Rs 1,200 for Infosys and this is a 15-18 month kind of price target. So I would be underweight in IT.
For entire interview, watch accompanying video.
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