Sanjiv Bhasin emphasizes power stock picks, including RattanIndia. In auto sector, he would focus on Maruti and Ashok Leyland. PSU banks performance assessed. Cement sector potential highlighted. Concor is singled out as a dark horse in the railway stock segment. He also says that UltraTech, Ambuja are two cement stocks which should be in the portfolio.
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In the last four trading sessions, two private sector banks have seen significant development both related to their shareholding. First is the case where the news came out that FII’s have reduced their holding and in another case a private equity investor sold its stake through a block deal. After both announcements, the stock prices moved up sharply. A number of times in stocks, where there is big institutional holding, there are phases, where it is more of technical reason which keeps the performance down. Now, surprisingly, it is during this period that PSU banks stocks which have been doing extremely well for the last couple of quarters, witnessed some profit booking. In case there are a few more trading sessions where banks see a divergence in performance, one cannot rule that a narrative might come on the street, about how private sector banks are better than PSU banks. It would be better to ignore those noises.
One sector where the street has been giving differential treatment for many years has been the banking space. Private banks were preferred over their PSU counterparts. But three years back, things started to change. Much loved private sector banks started to stagnate, both in terms of absolute price movement and also in valuations. It was not that immediately the PSU banks came into limelight, there was a phase of more than a year when both private and public sector banks were ignored. But then a year back it was PSU banks which got into limelight and since then have been doing well. But as they say, any kind of bias dont go away easily. Analysts estimates for next year s upside potential are far higher for private sector banks as compared to PSU banks. Possibly they are taking into account the fact that when the capex cycle takes upturn, which it has, PSU banks are much more likely to benefit as they have balance size and more importantly the mind set for that kind of lending.