Here are a few investment ideas from Prakash Diwan

However, from power space we have not seen the downstream benefit. We have only seen the Power Finance Corporation (PFC), Rural Electrification Corporation (REC), NTPC do well but there is a huge improvement that is likely in the equipment suppliers and you could look at some of the transformer companies; Voltamp Transformers is one of our favourite there.

The other thing is second tier pharmaceutical is seeing a lot of limelight. We have already seen that yesterday, in fact yesterday it was a day where every pharma stock got rewarded brilliantly but that is because the bigger ones are facing a lot of headwinds in terms of contraction of margins in the US, there is a consolidation that is happening, there is a new law that has come about in the US on the distribution side for most pharma players, new licensing norms. So that is changing the entire game for these larger players whereas the smaller ones look promising. Jubilant Life Sciences is one of our top pick there. It has not yet run-up. It will see a huge change, rerating given the likely approval that it would get from radiopharmaceuticals business - that is a new area of work which only Jubilant Life is good at or they have pioneered. These are the stories to look at. Granules India is the other one we keep on talking about. We have seen Lincoln Pharmaceuticals fly. So pocket like this is where you will make money.

You will have to stick to some of the old names, some of the well-known established names because experimenting with too many new names at a time when we are at the cusp of recovery might get slightly risky in terms of what you could get rewarded with.Anuj: What about Ashok Leyland. It has corrected 18 percent. Is it good enough or does the stock need to correct more?

A: I think that has been priced in largely. There was too much of an expectation with Ashok Leyland; the kind of stellar performance it has had in the last three years, so everybody thought empirically it could keep on growing every quarter and reward you even on the scrip price. However, as the base becomes bigger and stronger, it becomes difficult to clock those kinds of growth rates which sound very appealing and which justifies valuations to be stretched.

Ashok Leyland has had a fair consolidation last two quarters. The commercial vehicle (CV) cycle will start spurring around December or before December because next year we are getting into a new Bharat Stage-6 (BS) regime and therefore most of the prices of trucks go up by at least Rs 1-1.5 lakh on base level and most people, most fleet operators tend to order before that happens to take advantage on price differential. So if you have bought something before March 31, 2017 you are not going to buy a truck which is more expensive. So the inventory will start taking off some time around December which means you will get it priced in by about September numbers. So you have a quarter to dip into it. It might not do too well for the next couple of months, there could be a time correction but that is an opportunity for people who have missed out last time, around that it gave a stellar performance. Buy into at these levels and be patient enough.

Sonia: What about the newest listing - Quess Corp, any thoughts on that. Going by the way the subscription came out, it should be a phenomenal one but post listing gains?

A: It was a small issue, very coveted by everybody, a clear visible set of earnings. However, at the time of issue my only concern was the kind of allotment that people would be able to fetch. So there is no point in leveraging and applying for these initial public offerings (IPOs) and all but yes, it will do well.

Post listing, I am not too sure, unlike Mahanagar Gas (MGL) where I am extremely positive. The listing has not been to the extent that it deserved. We were expecting Rs 530-550 to be the basic area for it to be but from where it is currently it is still offer tremendous opportunity because there is going to be a lot of buying that will come in especially when foreign institutional investors (FIIs) starts buying, the allocations will improve and secondary market activity will pickup. So if I were to buy something post listing, it would still be MGL and not Quess Corp though if I am lucky to have got some allotment in Quess, I would exit on the listing itself._PAGEBREAK_Sonia: Is IndusInd Bank worth a fresh buy?

A: The numbers definitely indicate that the momentum is intact and in a landscape where others are struggling with quality of assets, this is one company that continues to grow and the kind of credit growth that it has notched after the numbers are out for the other banks, you will see at mouth-watering levels. In hindsight people will start figuring out that this is a great play. We have seen the rub-off effect yesterday, Kotak Mahindra Bank was up because it is a similar business model and people started realising that retail is still robust enough in these trouble times and with corporate lending still finding it difficult to grow, the likes of IndusInd, HDFC Bank from the larger segment and from the PSU side the ones that are focused on to individual lending like Dhanlaxmi Bank, Karur Vysya Bank, these are all banks that will be a different genre of growth. Therefore, to answer your question specifically, yes IndusInd is a buy at this level but you will have to accumulate it on dips as well because it would continue to give opportunities if market were to turn sour. And growth from here on, you probably have to torn down expectations to about 18-20 percent instead of 25-30 percent appreciation that it has clocked. In the last three years IndusInd has had a compound annual growth rate (CAGR) of about 28 percent which is phenomenal for a banking stock but now you will have to torn down the early 20s or late teens but yes, it still remains a buy for a long-term investor.

Anuj: Any word on Amtek group stocks?

A: Some of the smaller ones like Castex Technologies and all have started getting restructured and the banks have been more open to some of the proposals that the management had put across for the debt reduction. The debt to equity conversion is not a solution for some of these large equity bases that you have on the balance sheets of some of these companies but this group is going to change itself with is basically getting fresh joint ventures (JVs) or fresh partnerships which are more strategic in nature to make sure that the market share is short. However, what they have done is they have build capacities without visible market share growth and that is the challenge that they need to overcome. So it is more of a financial plus strategic restructuring that is required and that is underway.

Indications are that this would start leading to some sort of an improvement going forward. So we will have to watch for finer details to come through but it does show the rumblings of change have begun and that is a time to keep a close watch on the stock and the group as a whole.Anuj: Any other sunrise sector, anything else that looks good at current levels?

A: I will not let NBFCs pass without mentioning that one of the promising areas is the brokerage business and the intermediation business. We have seen a quiet rerating happen for most of the listed players whether it's Motilal Oswal Financial Services or smaller player like Indiabulls Ventures who has also done 40-50 percent in the last one month. Thanks to a combination of retail interest coming back to the market through the IPO route or through mutual fund route. There is enough business that these companies that have setup distribution and change have started and one of the best picks there turns out to be Edelweiss Financial Services because of the kind of combination of PE and fund based activities that it has.

However, lesser known fact of Edelweiss is that apart from the broking and intermediation business, it has started expanding quietly into the housing finance business also. It has had some very successful fund raising through non-convertible debentures (NCDs).

The quality of business that they are building is definitely very strong including the asset reconstruction business where they have three funds launched at different time horizons and they have garnered a lot of assets and a lot of turnaround stories where they have a huge carry as well which they will make eventually. There is also a new that they will be entering the general insurance business and that is a huge upside because they have successfully mastered the franchise on the life insurance side. It was more captive for their client base which they use and the same thing that they are likely to use with corporate relationships that they have to go into general insurance side as well as on the retail side. So we have seen the kind of valuation even general insurance has started fetching, if you see the Cholamandalam's experience with Mitsui Sumitomo Insurance Company; they have given top dollar for that franchise. So this is going to be a big business which a lot of intermediaries do not have. So Edelweiss is complete in that respect. It is into insurance, asset reconstruction, asset management, everything. So NBFC as a space has been very rewarding but there are still pockets of under discovered opportunity which is there.

The other pocket to focus on is education given the change in the ministry; I believe a lot of traction is going to be seen especially on the revival of the education. There is a report by an NGO, which has identified huge lacuna and the teacher level attendance in the government schools and how to go about solving that. The new minister is known to be very quick on decision making.

For entire interview, watch accompanying videos.