Here are some stock ideas from Prakash Diwan

In an interview to CNBC-TV18, Prakash Diwan of Altamount Capital Management, spoke about his reading of the market and his outlook on various stocks.Below is the verbatim transcript of Prakash Diwan’s interview to Anuj Singhal, Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Sonia: Are you buying into any rate sensitives ahead of the Reserve Bank of India (RBI) policy?A: Not particularly just because the RBI policy -- what happens is as we get closer to the date, this is a typical reaction that always comes through. My sense is if there is anything less than 50 basis point of a cut, it could be again be read as a disappointment by the markets. So, you might get caught in a bull trap, so no point trading just for that short blip.The larger picture seems to be turnaround that is happening in the US market in certain pockets and hence the global shift in terms of priorities. Some of the sectors in my view will start specially when gas is being talked about in a very different tone right from the Prime Minister to the foreign experts to somebody was commenting on how India is playing such an important part in that global trade.I would rather look at opportunities like shipping companies, which are involved in gas in global trade. They are the ones who are going to benefit, so there is much more to play. Rate sensitives are good trading bet, you should have bought it definitely yesterday not today, today is a tad late.Anuj: Your thoughts on how to play the oil trade now because you spoke about gas but we have seen Oil and Natural Gas Corporation (ONGC) for example at near highs – 52 week high, we have seen Aban Offshore, couple of these ancillary stocks do well, anything that you would want to pick here?A: One of my favourite plays in this has been Engineers India (EIL). We are looking at two things. One is as crude goes up or remains in elevated zones, hydrocarbon infrastructure setups will start making more sense and India is looking at a lot of energy, self sufficiency and stuff like that. So, that is definitely going to spur all these now cash rich oil marketing companies (OMCs) with the upstream capabilities to enhance refining capacities. We have not had much of refining expansion as yet. It could trigger a huge change in that and even the smaller companies will start participating. If you look at from that angle Engineers India offer a very strong opportunity. It is not even diluted itself in value, in this mayhem that we saw in the last couple of weeks.The other company is again Mangalore Refinery and Petrochemicals (MRPL), which is again subsidiary of ONGC in a way, but in terms of being under rated it stands out starkly. So, lot is happening in the oil and gas sector and you will have to look at something which is more India specific rather than just a simple correlated linear growth story for the crude prices. There are more complex plays available and I think Engineers India is definitely one of the best.Latha: How would you play the consumer stocks, they have taken a fairly big beating but we heard tell-tale evidence of Havells doing well in its November sales. In this entire gamete of consumption stocks has anything become attractive and good enough for a rebound -- after all it is only a cash crunch it is not anything long-term?A: In fact, now the way we see the numbers coming in initially when this was announced we thought all of them would take a hit. Things were bad now the companies are coming back saying no-no November was not so bad, so it is very too early to say things are good or bad to be honest. The way things are, the impact would be felt six month down the line when really the demand gets impacted and we are a fairly price elastic economy and market when it comes to consumer products.My sense is that damage could probably be slightly more painful and longer. It is not yet going to be visible in November or December numbers, but at lower levels I would buy a Maruti Suzuki, I would buy an Eicher Motors those are opportunities that you always wait for. I would still stay away from consumer goods, but my preference in that space is Fast-moving consumer goods (FMCG) companies.The organised FMCG plays will benefit tremendously after a while. So, if you are willing to wait for that dip to happen you don’t know when it is the lowest, but you would start accumulating some of the stronger FMCG names in this dooms peak environment.For full discussion, watch accompanying video...