Here are Mayuresh Joshi's top trading ideas

In an interview to CNBC-TV18's Latha Venkatesh, Sonia Shenoy and Anuj Singhal, Mayuresh Joshi of Angel Broking shared his reading and outlook on the market and also gave recommendations on various stocks.Below is the transcript of Mayuresh Joshi’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: The pocket that has seen the highest amount of movements these days is the auto space, so stocks like Eicher Motors are sitting at new highs. From autos and auto ancillaries, what would your top preferred picks be?A: We have seen a humongous move in terms of how the price movement for all these stocks have been --- two-wheelers, four-wheelers or even the auto ancillary names. Largely, if one goes by the theme of monsoons and the Pay Commission recommendations, festive season coming around, a lot will get pushed through in terms of dealer inventory at the end of this quarter. However, the volumes that we have witnessed over the last two years, the markets are coming to a point where volumes will now go at a pace of around 10-12 percent to say the least for two-wheelers.For four-wheelers again, specifically in the case of Maruti Suzuki India, we had seen a growth of 5-6 percent in terms of volumes over the last 2-3 years. This is all changing with new products coming through and new platforms coming through and with better models, even in spite of competition, they have still held on both through their average selling prices as well as margins. So largely, if investors are holding on to stocks like Maruti, Tata Motors, continue holding on to these stocks. There can be significant gain in terms of what we can see in terms of earnings outlook over the next few years.And even in terms of the two-wheeler space, my own sense is that anybody holding on stocks like Hero Motocorp or an Eicher Motors, should continue holding on because the volumes that you are probably going to witness even at 10-12 percent over the better part of the next few quarters with new launches coming through, my own sense is earnings probably will improve. Whether the valuations are justified, the valuations might look expensive at this point of time for all these players, but once the earnings trajectory starts coming on a more stable base over the next few quarters and sustains, the markets might rerate these stocks. So, clear hold on all these stocks and a disclaimer, we might be holding these stocks.Latha: What are your top picks at this juncture? The market looks like it will race to 9,000 in a hurry. What could be the leaders of this gain?A: If you look at the way the data points are panning out, private sector banks definitely seem to be back in focus and again the kind of earnings growth that one expects them to post over the next few quarters with credit growth expected to be in double digits with credit costs coming down, asset quality pressures probably receding, probably seeing how their spreads and net interest margins (NIM) pan out. That is going to have a significant say in terms of their earnings parameters. So, larger private sector banks like HDFC Bank, Axis Bank is something that we still probably have a positive view about, you should still continue holding if you are holding from the lower levels.From the cyclicals again, cement as a pack is something that I have liked for a long period of time. I continue liking that though Q2 might be a blip because of the monsoons that we have seen and some moderation in terms of dispatches and the realisations probably staying muted. But largely over the next few quarters, as utilisation levels pick up, the return ratios will improve, the realisations are expected to pick up as well in that sense because demand is probably going to outstrip the kind of supply dynamics that you are seeing at this point of time. So, UltraTech Cements if somebody is holding, clearly hold on. Midcap stocks like JK Lakshmi Cement, Mangalam Cement is something that you should hold on if you are holding on to these stocks.But largely, stocks that we like at this point of time, would be something like a VST Tillers Tractors on declines. Our own sense is that with good monsoons coming through, the tiller sales will show a good pace of growth going ahead as well anywhere between 11 and 12 odd percent in terms of volume growth and realisation should have a reasonable amount of improvement as well. Cash rich balance sheet of Rs 148 odd crore, working capital cycle constraint of around 90 odd days, expected to come down and largely cash flows expected to be anywhere between Rs 60 crore and Rs 70 crore, which will lead to an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin expansion of anywhere between 2 and 3 percent over the next couple of years. So, VST Tillers is something that we will probably like from the agriculture based theme over the next few quarters in terms of an earnings parameter as well.For entire discussion watch accompanying video...