Here are a few stock ideas from Prakash Diwan

In an interview to CNBC-TV18, Prakash Diwan, Investment Evangelist at prakashdiwan.in shared his readings and outlook on specific stocks and sectors.

Below is the verbatim transcript of Prakash Diwan's interview to Ekta Batra & Anuj Singhal..Ekta: Your view on stake sale which is taking place in the private banking space you are seeing that interest which is coming back into financials now.A: No, absolutely and I think simultaneously with a consolidation wave that probably gets triggered by Reserve Bank of India (RBI) amongst the PSU banks, it's the private sector banks also which will start looking for cashing in on this opportunity and just to point out specifically on this name there is one large investor here who also owns one of the largest coffee businesses in the country and he is known to be very astute investor, got in at close to Rs 70 levels and will definitely be laughing to the bank if this goes through at about Rs 120-130 whatever valuations that Nisha is mentioning.Anuj: Actually Rs 109 only with that current price only because now we have Lakshmi Vilas Bank with valuation of Rs 2,000 crore.A: That's definitely a decent and more importantly the well run private sector banks either they are too large like you have YES Bank, IndusInd Bank, Kotak Mahindra Bank which have grown too big, so if somebody were to buy something of meaningful significance then naturally you will have to look for this, the other segment of banks that will rev up because of this news flow is Karnataka Bank it is always a great candidate to talk about whenever there is some stake sale and consolidation and even Karur Vysya Bank (KVB) which is one of the high quality.Ekta: And I can take whole stake in it also, if I am not mistaken, 1 percent stake in Indian Banks as well as KVB?A: So these are very ripe candidates for corporate action or something on mergers and acquisition (M&A) side, but generally I am not very positive on the PSU banks at this point in time because the report cards haven't started coming out, so I would not kind of recommend a buy or something when there is a comment on the transaction that we referred.Anuj: The IT sector Infosys is down 10 percent, TCS is down 3 percent and Tech Mahindra is down 3 percent. How do you look at it something is changing in the business model which the market better wakes up to or a good buying opportunity?A: One the reason why it is a not great buying opportunity as a whole is because we could be in for a little bit of time correction, though there is still some time before the US election is out of the way and the Brexit impact is kind of articulated and manifest in earnings visibility or lack of that, so all of that is not yet kind of out of the way and my sense is Infosys also given the kind of guidance that we heard from the management and they were fairly cool about it. It is not something which they alarmed they sound very distressed which means that along the way they probably feel that things will probably soften on the visibility of earnings and that's going to be for another 3-4 quarters. So here we are talking about an expectation has been toned down very clearly and they started doing that 15 days back, so this shouldn't come as a surprise to most of us, but the reaction to the stock is probably because the expectations were very high. So yes, if I were to buy I would buy Infosys whenever I do, but probably the time is not yet right and will wait for some green shoots to start emerging in the business landscape.Ekta: How well are you playing the goods and service tax (GST) theme not the typical logistics theme? A: I think people need to start looking at GST beyond just the synonymous logistics play which every time we talked about a meeting between the Congress and the NDA is the logistics guys that flare up, but remember GST is going to be a real shift in taxation and the ease of taxation for some of the other sectors for any final good end product that you have which has a lot of intermediation levels be it engineering goods, be it consumer goods, be it housing materials, be it jewellery. Look at Titan it assembles the jewellery, piece of jewellery by using 2-3 large components and it is a very high value item, so there is no taxation on the overall value, but it probably the 20 percent value added that it does, so that changes the kind of working capital that get's locked into tax outgoes and how you manage your business. You look at simple thing like lingerie that's also an assembly of 2 or 3 key components where the value could be very different, whereas your value addition is just about 20-25 percent, so these are things that people need to look at and not just logistics and I think the next four weeks as the GST bill get introduced and debated and comes to fruition, we will probably see all this new sectors getting discovered as well.Anuj: One of the stocks of the week and of the month has been Tata Steel up another 3.5 percent right now.A: If you recall late night when we heard the board meeting come through for Tata Steel on the fact that they decided to change tack and go instead of selling the entire business or the large business at Talbot, they said they would probably sell it in parts and that was a much better strategy because it would be also looking at JV. The government has thrown in a lot of support to back the entire thing instead of putting it off the main stage discussion board, they have actually started working on a solution very actively, so the unions have reconciled very actively. There is a possibility of a JV on the speciality steel business which still has green shoots. It is not something that you can write off so easily and on a replacement cost basis also if somebody were to coming in, it would probably be better than just tripping off the assets and having a huge write off on the books, so what Tata Steel has done is avoided this huge write off which was coming otherwise and there could probably be a better solution to it, maybe it would take time and that's exactly why the stock getting rewarded.