Here are some stock ideas from Deven Choksey

In an interview to CNBC-TV18, Deven Choksey of KRChoksey Investment Managers shared his reading and outlook on the market and specific stocks.Below is the transcript of Deven Choksey’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: Reliance now at Rs 1,104. Would you buy it even at these levels?A: On the petro chemical side, the rated capacity utilisation has started increasing significantly in line with the amount of capacity that they have built in. So, at seven million tonne kind of a production, you are basically talking about the rated capacity of about 28 million tonnes in a year, which is something one could possibly look out for as far as the volume led growth is concerned and petro chemical segment. Plus, the newer plants are coming up so that should add further to the capacity and the volumes.The other side, the refining business, key points that I observed here is probably that is giving the comfort level -- one, the capacity is being expanded to 200 million tonnes. That is something which we are likely to see the full benefit in the FY18, but in the second half, fourth quarter, you should be seeing some benefit coming out.So, volume improvement in the refining segment, the pet coke gasification project should lead to higher amount of margin improvement for the company. At the same time, Reliance on higher amount of Basra crude which is giving them an advantage of lower prices. So, obviously the gross refining margin (GRM) would stand improved going forward.So, all in all, put together from the core business, I would think that the company should be reporting better numbers on a sequential basis in Q3 and Q4 here after.Sonia: What about some of these pharmaceutical names, Biocon and Syngene? Syngene’s margins were very strong this quarter and the stock is up 2.5 percent. Biocon also, decent showing, stock has been great wealth creators. What is the view here on?A: The simple view would be to stay invested into this particular space and the companies like Biocon. Also, finding interesting developments happening with Biospace particularly, with most of the companies including Dr Reddys Laboratories (DRL) where you are likely to see 2017-2018 and 2018-2019 financial years in which some of the products coming up into the market and that could possibly give a better visibility of earnings for the companies going forward. So, overall the view remains positive in this space and probably companies where the focus is on the bio and biosimilars.Sonia: Would you put any fresh money to work in HCL Tech after the numbers that you saw purely because if one wants to have an exposure in the IT space then HCL Tech looks a bit more promising since the company is quite confidence of maintaining their guidance for the full year?A: On one side, they are available on FY18 earnings estimates of Rs 65 earnings per share (EPS) at somewhere around 14 kind of a price-earnings ratio (P/E). So, certainly, it is not a bad looking valuation at all. That is where one would develop the confidence too, that when the valuations turn in your favour and at the same time when the companies are maintaining the guidance, I would think that one should possibly allot more money. Both, Infosys and HCL Tech, are showing very different kind of a character. Particularly in case of Infosys where they are showing the larger appetite for even the merger and acquisition (M&A) related strategy, the acquisition strategy.In fact, in case of Wipro’s transaction also yesterday, what one is observing is that they are moving very fast into the cloud space. And that is where I believe that this company are registering the presence. So certainly any valuation, which is sub-15 P/E ratio is a welcome valuation and to add this stock into the portfolio would be much larger comfort at lower valuations.Latha: Any other results in the midcap that impressed you or did not?A: I do not know. Too many results are coming in a lot. So, honestly, putting across any name right here is a little difficult, but overall impressive numbers have come up from the corporate banking space where you have also got YES Bank’s number which are quite impressive. Though not midcap particularly, but even the cement numbers of UltraTech came out to be very good. So, overall the numbers are coming up well and my belief is that in the auto and auto ancillary space, you should be seeing a distinctly different kind of an improvement into the numbers, the margins in particular for automobile ancillary companies. So, keep an eye on that space when the numbers get announced.Sonia: Wanted your comments on ICICI Bank, which is up 15 percent for the week. And despite the gains, the stock is still one of the cheapest in the private sector banking space. Do you see more upsides?A: Yes, from the valuation perspective, if the overhang of the non-performing assets (NPA) get out, which is happening now, with this particular deal too, I would think that the banks like ICICI Bank could have relatively better rerating possibilities. On one side, you have got higher earnings growth happening. On the other side, the overhang of NPAs coming out and the valuations are remaining attractive. So certainly, rerating should be seen on the cards.(Disclaimer: Reliance Jio is a part of Reliance Industries that owns Network 18 Media & moneycontrol.com)