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.
Siddhartha Khemka anticipates short-term pain in IT but remains positive on the market outlook. As some of the larger sectors like banking, auto, cement, capital goods continue to report strong numbers, the market could continue to see an uptick. Metal sector momentum driven by global factors. A weak Q4 is expected for metals. Market focuses on select themes amidst recovery hopes post-monsoon.
For the last nine years on the priority list of the government has been building physical infrastructure like roads, highways, ports and airports. Binding all the infrastructure projects, whether big or small are two commodities, cement and steel. In the cement sector, small and mid sized companies have been able to take advantage of this focus and increased spending by the government and have been able to both clean up their balance sheet and in some cases, they have gone ahead and increased their capacities which would be getting commissioned soon. With continued focus on infrastructure, will these companies be able to see another round of re-rating?
Sanjiv Bhasin says: “When it comes to religious torism, the winners are going to be Indian Hotels and IRCTC. Also, add UltraTech, Ambuja and Dalmia Bharat into your portfolio on this correction. Cement will be a no-brainer right up till the elections and you will see more cause of price hike.”
Cement has been a sector where most of the analysts have been caught off guards. The stocks have done well and a large number of analysts have been sticking to their stands that pricing and capacity utilization is an issue. What they probably ignored was the fact that any industry which has been facing headwinds for a long time tends to sort the issues and few players are able to make a comeback as consolidation takes place. Pretty much what we have seen in power. Due to government focus on infrastructure for the last nine years, a number of cement players have been able to improve their balance sheets and also become operationally efficient. With the policy continuity there is a high probability that we may see a similar trend in coming years.