Mayuresh Joshi, Head-Equity Research India at William O Neil, recommends buying opportunities in stocks like Exide, Amara Raja, and Pidilite in the midcap space. He also suggests considering midcap IT stocks and pharma companies like Sun Pharma, Cipla, Natco, and Torrent Pharma. Joshi says they will be keeping eyes open for any pullback in stocks like Persistent and Coforge within midcap IT space.
Reliance Industries oil and gas exploration segment has shown a significant jump in performance, with a 22% increase on a sequential basis and a 50% increase on a YoY basis. The current EBITDA number for the segment stands at close to Rs 5,800 crore. Mayuresh Joshi, Head-Equity Research-India at William O Neil, expects the numbers to remain stable and increase at a reasonable pace.
Mayuresh Joshi says: “Sun Pharma, Cipla and Lupin probably remain as holds in our global portfolios. From an earnings perspective, Torrent Pharma and JV Chemicals on declines or pullbacks can probably be looked at. Again, the key triggers remain the same across both these stocks.” The comfort stays with largecaps from a valuation perspective as a whole host of mid/small caps have run up quite significantly.
"For the largecap ITs, maybe one or two quarters of more softness can probably be expected. Generally, the third quarter is expected to be a weak quarter with a lot of furloughs expected and client discretionary patterns expected in the fourth quarter as well. But they should bounce back very smartly and fill in the valuation gap that the midcap IT companies versus largecaps probably have."