Here are Prakash Diwan's top trading ideas

In an interview to CNBC-TV18's Latha Venkatesh, Sonia Shenoy and Anuj Singhal, Prakash Diwan of Altamount Capital Management shared his reading and outlook on the market and also gave recommendations on various stocks.Below is the verbatim transcript of Prakash Diwan's interview to Latha Venkatesh, Sonia Shenoy and Anuj Singhal on CNBC-TV18.Anuj: I wanted your thoughts on the kind of relief rally we have seen in couple of pharma names. Strides Shasun was a big gainer on Friday, anything that stands out for you in this space?A: The pharma rally goes on to lend conviction to the fact that you cannot treat all pharma names the same way. Unlike IT, where there is a little bit of a denominator base issue in terms of the entire sector getting plagued. Pharma is such a stock specific, business specific, model specific activity. Look at the way Dr Reddy's Laboratories (DRL) has clocked these numbers. Not that the next quarter looks very rosy at this point in time but pharma will continue to come up with these surprises.Today what I expect going forward, people will start narrowing down on to a few choices. Wockhardt might probably not yet be such a big thing or Strides might not feature so much in the list but Glenmark Pharma and Biocon will probably see a lot of money coming back into this in a very significant way. So if you have to buy just a couple of stocks in the large pharma names, it has to be Glenmark -- these are not the largest but decent enough in terms of marketcap. So Biocon and Glenmark continue to be very promising given the commentary, given the numbers that we have already seen.Latha: How do you analyse latest developments on Bharat Forge?A: For some strange reason Bharat Forge has been side-lined when we talk about defence which earlier used to be also a big beneficiary of the defence buzz if not necessarily defence orders yet.When the first time defence got into the picture when we talked about Bharat Forge. It has been about six-eight months of that also. If you see the way the JVs are progressing and if you add the North American newsflow positively. It still hasn’t done that huge run up that some of these companies could -- look at auto ancillaries. What is happening is we are getting so excited about the numbers from Maruti, today you will probably see a bump up in Ashok Leyland as well. Thanks to the dismissal of the 10-15 years old vehicles in the capital. All these original equipment manufacturers (OEMs) -- if they are doing so well, you will have ancillaries also doing extremely well.That is the quiet improvement in the ecosystem that is happening and some of the companies are gaining more skewed fashion than the rest in auto ancillaries.Sonia: What about Bharat Forge’s own group company, Automotive Axle? It hasn’t performed up until now but you think it could be a beneficiary?A: It could. If you look at GNA Axle, which is also a smaller player in that space, from a valuation perspective, it is still available at much more reasonable levels than Automotive Axle. I am not denying the kid of pedigree that Automotive has but I would not risk my neck out with such a high price thing in the auto ancillary space because the P/E expansion is very labelled in the space unlike some of the other sectors where P/Es can move from 18-26 in two quarters but this doesn’t happen in auto ancillaries. I would go with GNA Axle or Endurance Technologies at this point.For full interview, watch video...