Here are Deven Choksey's top trading ideas

Watch the interview of Deven Choksey of KRChoksey Investment Managers with Latha Venkatesh, Anuj Singhal, & Sonia Shenoy on CNBC-TV18, in which he shared his readings and outlook on market and specific stocks.Below is the verbatim transcript of Deven Choksey’s interview to Latha Venkatesh, Anuj Singhal, & Sonia Shenoy on CNBC-TV18.Latha: Generally the mood on the market, do you expect that those who are left out of this rally which came so suddenly on us are likely to get more steam, are you expecting more gains before Budget? A: Budget is just round the corner, so, not too sure whether it is before the Budget or after Budget. However, my general sense is saying that you will have February and March month, I think in both these months you are going to have a rally continuing and probably we should see the Nifty going to newer levels between 8,700 and 9,000. The primary point of view here is, in the derivative market with the GAAR implementation coming in from April 1, we are likely to see a lot of derivative position unwinding. At the same time, the position would be bought back into the cash markets and that is where you will be seeing a larger amount of buying taking place into the equity markets and probably that could be the reason for which technically the market would also have the upside potential going up to 8,700-9,000 levels. On the other side, the other factors remained quite positive. We have been seeing and experiencing good result season so far. Most of the companies have come up probably and have defeated clearly the demonetisation blues. So, certainly we are seeing larger possibility in Q4 and going forward FY17-18 as far as corporate earnings outlook is concerned. Given that situation, given the likely thrust coming up in the Budget on the infrastructure spending, I would believe that large amount of money would start pouring into the market and that could be one of the more reason for which I think I would remain confident for the market to continue its rally. Going forward, we should be seeing newer levels, maybe some correction here and there which is very well justified, I think one should be using this as an opportunity to buy during the dips. Sonia: From the consumer durable space, what is it that you like, good quarter this time for most of them? A: I think in general we have been finding that the space is looking quite interesting. The growth is appearing in most of the businesses very clearly we are seeing a growth in the areas particularly where the businesses are connected with the building material side. There, the companies like you mentioned some of the air-conditioning companies, some of the electrical domestic suppliers companies like Havells, they are all looking quite interestingly positioned. So, from a perspective of looking at some of these companies, one could possibly find good names available and they are in interesting business position as well. What we have been seeing during channel checks is that various companies are experiencing good amount of order inquiry from some of the large projects and that is where you get confidence that if these inquiries are materialising into business which they believe that is happening then in such case I think you are going to see a growth happening in larger proportion. Not too clear as to which company we would immediately spot on and put on the buy recommendation; we will continue to hold I think the good coverage or good recommendation companies like Havells for the time being. Anuj: What about auto stocks, we have seen Maruti Suzuki almost back to its previous high, we have seen TVS Motors almost go there, what would be your preferred picks in this space? A: I think the auto space, we clearly like to go strong onto the commercial vehicle companies. What we are experiencing in the marketplace is that the discount is rapidly coming down in most of the models in commercial vehicle (CV) segment and at the same time we are seeing the larger amount of demand coming up from the respective pockets. Given that kind of a situation, commercial vehicle companies are all set for good amount of growth going forward in 2017-2018, 2018-2019. Also, the thrust comes in from the larger infrastructure projects which are being implemented in the country. So, from that perspective too we find that the commercial vehicle could be I think the right choice. Maybe I think one could immediately buy and probably one will have to hold for couple of I would say years to get maximum value out of this particular space. However, commercial vehicle, and along with that you may probably see good opportunity in some of the auto ancillary companies which are very well connected with the growth in the automobile space. So, obviously commercial vehicle would be the choice. Maruti kind of company within the passenger vehicle certainly remains a good choice to add into the portfolio during every correction or dips. I think within the farm equipment segment, we are seeing good amount of traction too. So, certainly Mahindra and Mahindra can’t be neglected on that front as well. So, few of these companies within the respective spaces could be looked at to add into the portfolio. Sonia: What about in the NBFC space, we have had some good quarters from the likes of Cholamandalam Finance, etc. A whole host of others, Ujjivan did quite well, what would your top pick be from there now? A: We continue to hold positive view on both these companies, Bajaj Finance and Capital First largely because we find that their approach to acquire the new customers with clarity using the digital process to acquiring the customers, I would think that these two companies are remaining relatively more strong as far as quality of the credit lending that they are doing because they are choosing the customers so very well. So, that is an area where we have been having high conviction.At the same time, I think though Bajaj Finance is already recovering and so is Capital First in last few trading sessions, but I feel that market gives opportunity at lower levels, I think these two companies could be a good choice to add into portfolio. If at all you get good correction in the market for some reason, maybe after the Budget, I think that could be a right choice to add into the portfolio. Latha: There were some stocks which took a beating for fear of demonetisation say cement space, commercial vehicles that you discussed, two wheelers that you discussed, any of these offering attractive valuations now?A: Cement we continue to like largely also because of the fact that we are seeing a good amount of projects coming up on various side of infrastructure. Also, the thrust of the government on low cost housing is also suggesting that cement as a commodity could possibly see a good run. Most of the cement companies have been having a lower capacity utilisation in past, I think that could possibly change and as a result of which higher capacity utilisation would add into the higher amount of incremental profit for most of the companies though I think at relative level some of the cement companies are looking slightly expensive currently but my readings say that if you see a larger amount of growth coming into the profit, probably the higher valuation could be slightly justified also. So, I think companies like Ramco Cement which is operating in the southern belt they look quite an interesting company, little expensive though once again I must add but I think it is an opportunity to buy during any kind of correction in the market. Sonia: Couple of these non-index largecaps have done very well whether it is United Spirits, whether it is Ashok Leyland, you did mention commercial vehicles earlier, but from the non-index largecap variety anymore favourites that you have? A: Not that immediately I can put across with a name non-index but I feel that the companies which are looking largely very exciting to us I think they include the companies like Bajaj Finserv where we see good amount of growth opportunity happening also because of the insurance business along with the finance business but more importantly insurance business this time around could give a good amount of opportunity to investors to buy into this kind of businesses. Similarly, I mentioned commercial vehicles and I believe that some of the large auto ancillary companies could possibly show a distinct growth. We continue to like the companies like Wabco in that particular space though it is little thin volume company in the market but the opportunity over there could be quite large as far as investment goes. So, certainly they are non-index stocks definitely but we liked these companies as far as investment outlook is concerned.