The News International Team
10:30am Market Expert: Valuations for Indian market have gotten out of hand and the next 12 months could be “very painful” for some parts of it, believes Dimensions Consulting’s Ajay Srivastava.
Srivastava said that economy looked “fundamentally positive” in the wake of reforms undertaken by the government, but the steps will take time to percolate down to earnings.
“Some correction has already happened. More has to happen,” he said. “The investor should reallocate his portfolio away from stocks that have made him profits. Also, don’t make large commitments [to stocks].”
But still, the analyst said pockets of opportunities existed within select stocks and sectors.
He picked out telecom stocks as one that are poised to double in the next two-three years. “After the spectrum auction, their cost of material has become fixed. They will have assured revenue. They can’t be many new players in the market,” he said, adding that the shift in dynamics will cause valuations for these stocks to go from the 2 to 4 times price-to-book they are currently at, to 7 to 10 times.
10:00am Market Check
The market trimmed its early gains with the Sensex rising 61.30 points to 27518.88. The Nifty managed to hold 8350, up 13.85 points at 8356.
Deven Choksey of KR Choksey Shares says yesterday’s fall (of 654 points on the Sensex) provides an excellent opportunity for those who want to create long only portfolio.
One should now look at investing into quality stocks from the private banking space that have fallen anywhere between 10-30 percent and whose business models look robust, he adds.
The broader markets marginally gained too with the advance:decline ratio at 1001:787 on the Bombay Stock Exchange. Reliance Capital, Gulshan Poly, SBI, Garware Poly, Axis Bank, HDFC, Bharti Airtel and Infosys were most active shares on exchanges.
Top IT exporters TCS and Infosys gained more than 2 percent after Accenture raised its 2015 outlook for revenue growth to 8-10 percent in local currency. IT firm sees Q3 revenue in range of USD 7.35-7.6 billion.
Larsen and Toubro gained 1 percent as L&T Construction won orders worth Rs 1,711 crore in March. ONGC, Hindalco Industries, Tata Motors and Sesa Sterlite were other prominent gainers, up 1-2 percent. Among banks, ICICI Bank, HDFC Bank and SBI climbed 0.4-0.9 percent.
However, HDFC, ITC, Axis Bank, Sun Pharma, Mahindra & Mahindra, HUL, Dr Reddy’s Labs, Hero Motocorp and Bajaj Auto declined more than 1 percent.