US yields and Indian midcaps are experiencing a shift in the market. There are now three rate cuts, softening yields, and a potential correction in the PSU basket. PSUs have seen under ownership and outperformance, but there is extreme overbought conditions. In terms of earnings, Ashok Leyland and Bharti Airtel have shown strong numbers, while some agrochem and specialty players are in an accumulation zone.
Vodafone s net losses have narrowed in the December quarter, with positive guidance on funding and gaining market share in the telecom space. The stock has potential upside given strong net ARPUs and the upcoming entry into 5G. Funding remains a key issue, but once resolved, the stock can be re-rated. PSU names, such as NBCC and HUDCO, are expected to surprise on the upside, along with energy and gas companies like Nalco and GAIL. Indigo, Ashok Leyland, Dhanlaxmi Bank, and Nalco are predicted to be outperformers.
SEBI s new disclosure norms have led to compulsory unloading of HDFC s heavily owned FII stock, causing fear and a perfect storm for private banks like HDFC, ICICI, and Axis. However, investors should consider buying Axis and HDFC Bank due to their potential for credit growth. Birlasoft, Tata Steel, and Tech Mahindra have shown positive earnings, while Balkrishna Industries is a standout in the tire market. The ongoing legal battle between Zee and Raymond is affecting sentiment, but the underlying businesses of both companies remain robust.
Regarding real estate, Bhasin advises waiting for numbers and warns that new launch prices may not be sustainable. Sanjiv Bhasin suggests booking out of DLF and Godrej and getting into some banks after recent price correction. . He is also favourable towards Paytm, ICICI, Axis, Wipro, HCL Tech, ONGC, GAIL, SW Solar, and Dhanlaxmi Bank.
Sanjiv Bhasin, Director, IIFL Securities, believes there is still room for specific stocks like Kotak Bank, Dixon, Paytm, Nalco. He highlights the positive traction shown by Kotak Bank and the potential for it to deliver strong results. Bhasin also emphasizes the long-term potential of Dixon due to the growth of electronic manufacturing services (EMS). Additionally, he discusses the positive outlook for Paytm.