Here are Harendra Kumar's top trading ideas

In an interview to CNBC-TV18 Harendra Kumar of Elara Capital shared his reading and outlook on the market.Below is the verbatim transcript of Harendra Kumar's interview with Anuj Singhal and Sonia Shenoy on CNBC-TV18.Sonia: The big theme that everyone is looking out towards is the monsoon and we have seen so many stocks do well for example, Escorts was up 20 percent last week amidst all this Brexit brouhaha, but what is your own pick of the lot in the monsoon theme?A: The monsoon theme rather than playing directly vis-a-vis agri machinery plays, the first impact which is larger is of course the consumption theme and we have spoken about Hero Motocorp being the biggest beneficiary out there, high up in their picking order of FII investors as well. The one trigger they are looking for is the motorcycle volumes to come out which will probably follow once the monsoon gains space. So I think Hero Motocorp is reasonably valued. Some of the names that you mentioned like Escorts and others, they have been highly volatile and numbers are yet to flow in to justify those kind of spikes in share prices.Sonia: What would you do with some of the heavyweights now, the stocks that have fallen 5-10 percent last week, would you buy into them now and if yes, which ones?A: We are entering a phase of next 60 days where the volatility will be very high. The market has given very good returns for the year. My guess is that the market should settle closer to 7,700 over the next three-four months. So you will get better entry points. So our call on the market now is that it needs to consolidate where earnings have to catch up. So the risk of a small minor correction of 5-7 percent is very high.Individual stocks could fall a lot lower from hereon. So it is very rare that dollar has appreciated and the markets have also rallied. So this construct was there only two weeks ago when we had a lot of domestic inflows, which is not the case now. To expect that the market will continue to rally upwards when the dollar is appreciating is expecting too much. So our view on the market obviously is a little cautious for the next 60 days and any profits that you get probably will try to take them off the table.Sonia: What is your view on Tata Motors and the Tata Motors DVR as well?A: There are two views in the market but what we have put out in the note is the depreciation of the pound is positive for the currency and you should also know that the 40 percent of business in USD which has appreciated significantly. There is a third angle which is the translation into the Indian currency which will have a very marginal impact but most of the positions are hedged and the band is extremely strong, our analyst was there in the UK plant just last week, so our view would be to accumulate Tata Motors on the declines. There is very marginal impact for FY17 and FY18 is too longer way. So we are not as alarmed as the market is on the stock.