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Last Updated : Nov 15, 2016 12:04 PM IST | Source: CNBC-TV18

Here are some stock ideas from Prakash Diwan

In an interview to CNBC-TV18 Prakash Diwan, Market Expert at Altamount Capital Management shared his reading and outlook on the market.

In an interview to CNBC-TV18 Prakash Diwan, Market Expert at Altamount Capital Management shared his reading and outlook on the market.

Below is the verbatim transcript of Prakash Diwan's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Sonia: First on Tata Motors, disappointing this time both Jaguar, LandRover and standalone, how do you think the stock could react?

A: At least the last time I saw the ADR was almost down 2 percent because naturally they have not been able to leverage or translate the sales growth into any monitory gains and how do you explain such a significant miss on the forex hedging itself with a company which is so large and all over the world in terms of presence. So there is something definitely going wrong in terms of decision making and you can make out, so pretty worrisome. For somebody who has been so positive on Tata Motors and the other thing is -- I was talking to some of the dealers on the trucking side, on the commercial vehicle side and what they are not worried about is the primary sales is fine but the secondary market is absolutely at a grinding halt. So secondary sales of trucks doesn't happen without cash involved and that is going to be a big -- they will not be able to do any kind of major sales because the secondary market is going to dry out.

Latha: Which are the stocks you would avoid and which would you buy?

A: Secondary sales segment for trucks is out, commercial vehicles is out and enough has been written about the consumption goods, the while goods durables getting impacted but I am more interested looking at what is going to work and there is a whole new set of stocks that seem to be coming to the fore. Look at the companies that came out with numbers, QuickHeal. This is into anti-virus security for mobile phones primarily -- they are not competing with the companies, which are into laptops and desktops. Here, is a company which is starting to start seeing some traction because if Paytm transactions grow up so significantly, you will have somebody also protecting or enabling those. There is a company called Nucleus Software that does last mile software technology when products were payment banks. That is going to work.

You have an State Bank of India (SBI) with a Rel Jio getting into this kind of subscription numbers that it is and if the payment bank starts happening -- you have so many combinations that are coming through which are emerging.

My sense is that if the government enables itself to spend on infrastructure, it will do something very clearly about one of the largest employer and that is a construction space. So a lot of business will move from unorganized to the organized space, people who could write cheques and get things done and not necessarily everything is in cash.

The ability for the government to spend on reconstruction, on infrastructure development will make the BEMLs of the world also look positive. So you have so many other stories emerging as well.

Sonia: How did you read into Aurobindo Pharma's numbers, the stock has been very volatile but numbers are good?

A: The numbers were likely to be good as well because they did have a very robust quarter in terms of previous launches which are doing well but importantly the next big trigger for Aurobindo is going to be an acquisition which Ipca beat them in the last round but if they were to acquire something and hopefully it doesn’t become too heavy on the drag on the balance sheet then probably that will probably be the next scaling up which is required for Aurobindo. Otherwise, this has been the most insulated of names from the US-FDA wrath if you were to have it and things probably look now better for the pharma companies. So very positive on Aurobindo. This is a buy on dips as well.

Some of the pharma names will start seeing a lot of accumulation at lower levels but it is just a question that today people are frozen into complete in action and that is why all the good news is also getting completely ignored or swept under the radar. We are talking about earnings pataka, the kind of numbers that Star has delivered, there is a small company called Balasore Alloys which also gave away these numbers, Rs 340 crore of marketcap -- we have been talking about this segment, it itself is looking so promising because of the global change rerating. So you will have stories that still emerge. Balasore has done double of their entire last year's EPS in the first half itself and if they continue doing this, it could be available at around 7-7.5 FY17 earnings. So these are stories that you need to look at.

For full discussion, watch accompanying video...

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First Published on Nov 15, 2016 10:44 am
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