Some of the beaten down banks are better off: Deven Choksey

Are we likely to see that fresh high level? If not in the coming week, are we likely to see 19,000 at least in the year?

Well, obviously. I think the required constituents for Nifty to go up to the next

are in place already. On one hand, we are almost at the end of the earnings season for the second quarter. We are also experiencing the fact that the disadvantages of other countries are becoming an advantage for India. In terms of the options to invest money across the globe, India remains a favourable destination given the kind of strength that we are demonstrating in our economy.

Given these conditions, some heavyweight sectors in the Nifty, including banking and financial, will see a steady up move going forward because banking and financial suggest that the economy is basically growing and growing faster.

Till now, the corporate lending side of the book was not so sure but in the last one and a half-two quarters I believe that the corporate lending side book has started becoming very strong with 15-16% growth coming in for larger banks.

Retail lending book, housing finance remain strong, primary sector book stays on a steadier path to growth. Everything put together, the indication is that heavyweights like the banking sector would possibly drive the Nifty to the newer levels in the coming months.

This week, we had quite a few IPOs and they saw considerable traction. Even the ones currently open saw good response. Is there anything you want to highlight which could see good listing gains?

The company which got listed yesterday is the one we can talk about. The DCX Systems’s business plan sounds extremely convincing with its focus on the defence sector. The business is quite profitable.

I saw the numbers at

when the IPO was filed. I think somewhere around 16-17% ROC will continue and the growth rate assumed is on a significantly higher side.

Even valuation-wise, I find the company slightly more expensive compared to other listed peers in the market in the defence sector. The company remains relatively strong as far as the opportunity goes.

Bikaji, getting listed next week, is a company one can selectively look at, if the valuation permits. The opportunity in the food and food category businesses remains extremely convincing and strong with the discretionary power also increasing. So, I would think that any corrective price or the fall in the market would mean that companies like Bikaji would probably also be one to look at into the portfolio.

We are talking about Bikaji. The prospects are looking good but this week consumption was definitely underperforming whether it is , which was down reacting to its earnings. We saw margin erosion at Trend. There was margin erosion at , which impacted the earnings. There was a sense that consumption was on the back seat. Do you think this is just the earnings reaction or do you see this as many people booking profits after that huge run?

Both earnings reaction and profit booking are at play. The packaged food category and the retail sector are sure shot bets. Not many companies are available in the horizon in the listed space though and I think one can possibly argue that some of the packaged food category companies would remain relatively strong, one has seen how exactly

has performed this week after a good set of numbers I think the company has bounced back from nowhere.

The point I am trying to make is that investors have the appetite to add this kind of ideas into their portfolio. What one has to look at is valuation. As long as that is not prohibitively expensive, one can gradually accumulate these kinds of stocks into the portfolio.

Is there any company that caught your attention or any other earnings that you would want to highlight which probably you think could rerate a stock or may derail it – whether PSU banks, auto – any sector?

looks interesting. The domestic portfolio of Tata Motors and its commercial vehicle portfolio in the form of passenger vehicles have been doing very remarkably well and even results suggest that the commercial vehicle segment is in for a very-very smart recovery. Even results endorses this view.

JLR is improving but at the same time I think it is still a cause of worry as far as the near-term improvement is concerned. Given the situation, I think the downside in the stock is possibly limited. The domestic portfolio would probably move smarter for Tata Motors. For other commercial vehicle manufacturers like Ashok Leyland, the numbers are reasonably good going forward.

The auto space, even two-wheelers, are showing better numbers of late. So, auto, auto ancillaries could possibly be the ones where one could train her focus for the next six months largely because of the fact that they are beaten down available at a comparatively lower price to its previous highs. Opportunity- wise, I think the situation is getting better as far as auto is concerned. We definitely also look at I think banking space very very closely and we feel that some of the beaten down banks are better off. I think

has actually shown performance in the trade. Similar could be a situation with Kotak going forward so I think one could have a look at them. Public sector banks remain good but at the same time I think they have beaten down so rerating definitely can be expected on them.