Watch the interview of Sharmila Joshi of sharmilajoshi.com who shared his readings and outlook on specific stocks and sector & Feroze Azeez of Anand Rathi Financial Services answered few personal finance queries.
Below is the verbatim transcript of Sharmila Joshi's interview with CNBC-TV18:
Adani Power
In Adani Power, there are little bit of positive newsflows today and overall we can think that perhaps power as a sector is now -- it does seem it is getting its attention and a lot of their problems are getting addressed. So there could be an upside from current levels but it is not my favourite sector. I must say both for Adani Power as well as Lanco -- especially for Lanco, also given the fact that we are in such a vibrant market, it makes sense to be invested in companies where there is less leverage and there is a better business outlook because that is where you will see faster returns. So I would advise to get into some other stocks, other sectors as well as stocks where the balance sheet is cleaner and there is less leverage because those will still be the first stocks to move in this market. Pharmaceutical is a great space to be in. But even within the infrastructure space if you were to be in a stronger stock, maybe like Larsen and Toubro from the frontlines or Thermax or even maybe a stock in the road space like ILandFS Transport would do better.
ONGC
ONGC - it is best to exit not because of today’s news flow but overall the scenario doesn’t seem very positive for Oil and Natural Gas Corporation (ONGC). The only positive that I can say is that because you are seeing crude prices where they are, the oil marketing companies are not making a loss, so there is no threat of a very big subsidy burden on ONGC any more but that said there is no big positive because I do not see crude prices recovering in a hurry from current levels and unless crude prices recover, company like ONGC doesn’t make money. Their balance sheet starts suffering once crude falls significantly below USD 65 per barrel and that’s where it is going to stay for some time. So the best strategy would be to exit.
ITC
There doesn’t seem to be any real good news for ITC and we have had another duty hike in this budget and the company has said that they will pass it on to users but somewhere the results indicated that the elasticity in passing on prices has come down. So you will see numbers for cigarette sales coming down. I think the good news is that somewhere along the line, the company had begun to diversify away from cigarette not exactly away but getting into other businesses where you wouldn’t be hit by these constant duty hikes the way cigarette business is. So they have increasingly gotten into food, they are in other businesses, they have a hotel, they have an agri business, they have paper and company’s strategy to focus on food business going ahead is also -- they have spoken about that very widely in the press in last couple of months, so you have to give time. One should stay invested. My target on the stock would be closer to Rs 375-380 but you need to wait for this entire food business story to play out for that to increasingly contribute to the topline as well as the bottomline.
SBI
One will have to keep the investment horizon little more than a year because that is how long is going to take for banking as a sector to sort of get back on track but within that space, I think the last quarter numbers of State Bank of India (SBI) were quite satisfactory and within the PSU space, perhaps they were among the few banks that gave a good performance and you saw a lot of positives within that number. So I would stay put in SBI and with a timeframe of about 12-18 months, I have a target closer to Rs 325-330. So one should be patient and stay invested in SBI.
JK Tyre and Industries
One should hold JK Tyre and Industries. The results for JK Tyre and all the tyre companies are now not as run away as they were last year. However, they will continue to have a strong quarter and hopefully the pick up in demand will also benefit them. If I were to look at a 12-18 months kind of a price target then I would look at a price closer to Rs 148-150.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
