Here are a few stock ideas from Prakash Diwan

This set of numbers has opened up a whole new set of possibilities. One, Ashok Leyland is on a comeback trail, the numbers tell you that commercial vehicle is not as bad as we are making it look and given the fact that natural resource companies have started doing well, coal has started doing well. It has to start putting back. Second, two-wheelers will have much more, Hero Motocorp, we have seen 34 percent drop, will be still much more serious. Bajaj Auto was sounding cautious but that was a bit of a expectation management issue. If Royal Enfield sells so much, you have seen Eicher Motors do well. Bajaj has just got into that segment, let the bike come out, let people have a look and feel, get reviews - that segment is promising enough for Bajaj to start setting off the slowdown in the other segments. Royal Enfield has only one product whereas Bajaj has many more to handle and grapple it, so that is probably sounding cautious but I would be positive on Bajaj as compared to Hero and TVS Motor Company. However, Ashok Leyland is a complete outlier there.   

Anuj: What about public sector undertaking (PSU) stocks, anything that stands out for you - that's one space where people have made a lot of money?

A: Post demonetisation announcement, I had started looking at BEML and Bharat Electronics (BEL) very actively because those are companies that get paid when the government is in a sound financial position and the fact that our fiscal deficit target is coming down from 3.8 to 3.5, if you see the math. Six auctions left for the Reserve Bank of India (RBI). They have reduced from Rs 14,000 crore to Rs 11,000 crore, the monthly quantum and if Rs 18,000 crore has been shaved off, the borrowings from the government add up to that much - 3.5 percent, so that tells you that infrastructure related to the government spending, the pump priming part, as we have been waiting for, is what is going to takeoff. So BEML continues to be a big favourite.

However, within the power utilities, I would also add Power Grid Corporation of India; it's on a stage of virtual takeoff. Add Rural Electrification Corporation (REC) - a disclosure here that I am some personal position in both these stocks, but the point is public utilities are going to do much better, so anybody related to infrastructure, metro development, railway construction and then the downstream businesses; you have seen Engineers India takeoff, Power Grid smartening up, BEML; this is where it will deepen, the continuity of momentum is very clear.Latha: With the channel checks you did, does it look like commercial vehicles are turning around because exports are not doing too badly and picking up. Are trucks somewhat better-off?

A: We didn't do channel checks for the commercial vehicles side. It was more for the passenger cars and two-wheelers, but Ashok Leyland numbers is what I was interpreting. If you recall, last year Ashok Leyland and Tata Motors launched a lot of new products and variants in this segment. So the smaller utility vehicle (UV) and medium and heavy commercial vehicles (M&HCV) segment is looking more promising and once people prepare for the GST, the logistics space will see more of smaller vehicles rather than few of the larger vehicles.

However, all that will change with the new emission norms coming from April 1 - that gives a change in pricing. So there are some positives which commercial vehicles could probably be better-off than anticipated.