See downside in L&T; HCL Tech top pick: Ambit Capital

Saurabh Mukherjea, CEO-Institutional Equities at Ambit Capital told CNBC-TV18, "The greatest downside risk is in the most popular cyclical plays. The sort of the stocks which by default come become the de facto economic recovery plays and I think three come to mind are Larsen and Toubro (L&T) as the largest construction and engineering company in the country is obviously a default recovery play. I think there remains considerable downside in L&T.""UltraTech Cement as a largest cement company; it is almost seen as a default recovery play. I think there is reasonable downside. Amongst the larger banks we continue to believe that the compositions of ICICI Bank’s portfolio is the one which gives us greatest concern among the largest private sector banks. That is the default cyclical recovery plays is where our levels of concern are greatest," he added. "By dint of that logic where we have much greater confidence is in companies which have less exposure to the Indian cyclical story, more exposure to either an export centric story or a manufacturing story which has very little to do with the core economy. HCL Tech remains our favourite pick in the IT sector. PI Industries is a midcap chemical exporter that we have been highlighting for good couple of years. Our view is that both of these companies remain worth looking at.""In pharmaceuticals for a long time we have been looking at Torrent Pharmaceuticals as a midcap pharma company of considerable promise which has delivered quite steadily over the last two to three years. So, very much focusing on export centric plays or domestic manufacturing companies which are not linked to the core economic cycle, not linked to the capex cycle and hence veering away from a L&T, ICICI Bank and an UltraTech towards the names such as HCL Tech, Torrent Pharmaceuticals and PI Industries," he said.