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Markets may see new high in anticipation of Budget: Anita Gandhi

27 Jun 14 | 12:00 AM

With markets consolidating ahead of the Budget Anita Gandhi, Whole-Time Director & Head - Institutional Business, Arihant Capital Market shares her views with Tulemino Antao on the market trends and outlook on sectors

The market seems to have entered consolidation phase after recent gains. What upsides do you see for the Sensex or Nifty from current levels till the Budget scheduled for July 10?


Markets have been range bound after the sharp rally seen post the election results. With brief consolidation post June F&O expiry we are likely to see new high in anticipation of Budget.

PSU stocks, across sectors, have rallied sharply over the past few weeks on hopes of reforms in state-owned enterprises. Other than the banking space which are the PSU stocks which look attractive at current levels?

There has been a rally across the board amongst most of the state-owned companies after the new government took over with banks leading the upside. However, we prefer stocks belonging to oil & gas and engineering sector.

Infrastructure stocks have also gained sharply following the new government's reforms in railways, roads, airports etc. Are valuations looking stretched at current levels and which would be your top five picks in the large-cap or small-cap segment?

Infrastructure stocks have witnessed a rally after clearance of large infrastructure projects which were stalled. In the large caps we prefer L&T. For mid-caps we would wait till budget as many stocks have run up sharply in the recent past.

IT majors which derive most of their revenues from exports seems to show a mixed trend. What impact would the strengthening rupee have on the first quarter earnings? What is your take on Infosys following the recent developments?

With reference to Infosys, one needs to wait & watch for one quarter till the time new incumbent gets hold over the Company. First quarter earnings will be proportionate with changes in the rupee level during that time span and respective hedge positions of those Companies. We do not expect major disappointment.

Auto companies are witnessing a mixed trend with respect to May sales data. Two-wheeler companies seem to be witnessing an uptick. Which is your preferred pick in the two-wheeler space at current levels for the long term?

Two-wheeler companies continue to register good sales growth. As of now Hero Motor is showing good strength in the pack.

Select mid-cap and small-cap stocks have surged in the recent rally with some of them rising between 100-200% . What would be your advise to retail investors and which five stocks would you recommend for an investment term of 2-3 years?

Since we are very close to budget day, we would like to see impact of budget on the sectors and stocks. Looking at the progress of monsoon and current crude level, we do not expect interest rates to come down in a hurry. So for immediate future, Companies having sufficient interest cover will be safe to invest.

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Sensex

Company Price Gain (%)
Dr Reddy's Labs2,486.457.47
Cipla591.454.04
Lupin1,032.453.02
Sun Pharma.Inds.519.552.59
H D F C1,790.851.37

Poll

Given the current crisis at Infosys, what would your investment strategy in the company's stock be?



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