In an interview to CNBC-TV18, Ambareesh Baliga, Independent Market Expert shared his readings and outlook on specific stocks and sectors. Below is the verbatim transcript of Ambareesh Baliga’s interview to Sonia Shenoy & Anuj Singhal.
Anuj: First a word on Tata Steel and how would you approach it after the weekend news flow and the developments on the UK plant?
A: After the Brexit poll it was clear that as far as Tata Steel is concerned things will get delayed and that is what is going to happen going ahead. I don’t think anything could be finalised in the next couple of months, so from that point of view I would be negative on Tata Steel at this point of time although metal space overall, I am not negative, in fact the rally could continue a bit longer but Tata Steel where I had given a buy closer to about Rs 200-210 and I exited about Rs 330-335. I think even at these levels if someone is holding I think one should be exiting.
Sonia: Today the day will belong to IndusInd Bank because of its earnings. Since last quarter the stock has given more than 15 percent returns since its earnings. You expect an encore this time?
A: I think so; they have been surprising on the positive side for a while. So, among the smaller private sector banks this is one stock which should be there in your portfolio.
Sonia: What about L&T Infotech, the initial public offering (IPO) opens today? There are pros and there are cons, growth is slow but pedigree is good. What is your recommendation?
A: We had discussed on Thursday that I have been a bit cautious for a while on this space. However, if you look at all the IPOs which have come in the recent past, in the last three-four months, people have made money in most of the IPOs. And even here, on listing, one should be able to make Rs 80-100. I think from that point of view one should be applying for this IPO.
Sonia: You have been recommending the monsoon theme for a while but now most of the stocks have played out what is the next big theme to play?
A: The monsoon theme will continue for a while longer. The next theme I am playing is the economy stocks, where the capacity utilisation has been low but despite that they have been making profits. So, now with the economy expected to have a clear take up over the next couple of quarters, you can just imagine as to how the profits will grow for these companies because there won’t be any further capex because they have enough capacity to be utilised.
So, those are the sort of stocks which I have been recommending now in the last two to three months and some of them have done decently well. We have a Grindwell Norton, Thermax, PI Industries, Gabriel India – which had a good move on Friday. The other stock which I had recommended was Welspun Corp which hasn’t still moved but I think that should move decently well.
Sonia: What are the top banks that you would be recommending for long-term investors now?
A: I have been recommending the public sector undertaking (PSU) banking space for a while but after today’s move I would be a bit cautious on the markets although I have been bullish I have been talking of 9,000- 9200 levels by the Diwali, but the way the market have moved up in the recent past I would be a bit cautious at this point of time because market have already discounted goods and service tax (GST) to a very large extent, monsoons have been discounted although the earning affect will possibly come after a quarter or two. So, we are actually getting into a situation where investors feel that nothing can go wrong and this is quite dangerous for the market.
At this point of time I would possibly look at booking profits over the next couple of days. However, when I say profits I am talking of small profits maybe just get into 8-10 percent in to cash and possibly wait for some sort of a correction before the next move.
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