What to buy/ sell & how to rejig portfolio now?

Synopsis “In the last couple years, we have made a lot of money in IT and commodities. But now capital goods – engineering stocks have also started doing well. So commodity consumers like engineering and infra and even the banking space, can be good in the next six months to one year.

” ETMarkets. com Related We are in a tradable rally; I would be more comfortable around 15,000: Andrew Holland Bajaj Auto & Tata Motors top auto picks for medium to long term: Amit Trivedi ETMarkets Smart Talk: Time to follow Warren Buffett’s advice to ‘buy the fear’ in market: Sunil Damania “If inflation is the way it is and with the kind of small correction that we keep on seeing in inflation, it does not spike from these levels, then the liquidity squeeze by the RBI may not happen domestically. If that does not happen, credit demand will be retained and so banks and commodity consumers are the space where one should be in and where one can make money,” says Neeraj Dewan , Director, Quantum Securities.

The market participants might not agree on a lot of things but there seems to be a consensus that M&M is in a long-term uptrend. Is that something you would concur with? Yes definitely. I have been positive on automobiles since the times steel started correcting.

Also for M&M, which is into commercial vehicles, the numbers have been good. Commercial vehicles have been a promising space and even the passenger vehicles are picking up. With the onset of monsoon, which is expected to be normal or a little above normal, M&M is in a sweet spot where their presence in commercial, passenger and farm equipment will give them a good boost.

If we get some control on inflation also the commodity prices correct the way they are correcting, it is a good sweet spot for Mahindra & Mahindra. At what price would Mahindra & Mahindra become a sell now? It has gone to Rs 1,000 from Rs 500. We need to see two-three more quarters because operating efficiencies will work in their favour, which was not the case last year.

Of course, there is volume improvement, there is price improvement because they had taken some price increases also and then there will be margin improvement. It will be because of operating efficiencies and the commodity prices coming down. I would say that I am not looking at too much upside from these levels but a 15-20% upside cannot be ruled out looking at the kind of margin improvement which may happen.

At that price, one needs to take a fresh call on whether you want to hold on or book some profits. Stock Analysis – Know before investing Stock score of Bajaj Auto Ltd moved down by 2 in 3 months on a 10-point scale. Subscribe Now Exclusively for Stock Analysis Stock score of Bajaj Auto Ltd is 8 on a scale of 10.

View Stock Analysis » Where is Paytm headed? I was not very positive on this stock right from day one because I really do not understand the business model and how they are going to make money. I think they will bleed a lot before they start making money. I don’t know how long the bleeding will continue and that is why I am not in that camp which buys stock just on the hope that because the business is doing well, because promoter is buying, the bleeding will stop at some point of time.

I need to see some clear indication of the bleeding stopping but that is not visible right now in the stock like Paytm. I will not really look at it or invest into this even at the current price or even if it comes down again to Rs 500-550 levels. MORE STORIES FOR YOU ✕ We are in a tradable rally; I would be more comfortable around 15,000: Andrew Holland Bajaj Auto & Tata Motors top auto picks for medium to long term: Amit Trivedi ETMarkets Smart Talk: Time to follow Warren Buffett’s advice to ‘buy the fear’ in market: Sunil Damania « Back to recommendation stories I don’t want to see these stories because They are not relevant to me They disrupt the reading flow Others SUBMIT Bajaj Auto which was hammered in trade almost a month back for taking no decision for a proposal on buyback has approved that on Monday.

They are sitting on cash of nearly Rs 40,000 crore. What did you make of the news? I think they were in two minds over the buyback. So one, the value is a lot less than what the Street was expecting and then it is a market buyback which is not a tender based buyback.

These are the two things which disappointed the market but then the tailwinds of the auto space and the commodity price correction is with the stock. We may not see the stock correcting. The Bajaj Auto buyback was definitely a disappointment.

On pharma stocks The stronger pharma names have definitely made a comeback whether it is the likes of Sun Pharma, Divi’s Lab and some of the stronger ones. The last couple of years saw every pharma stocks, even the one you have not heard, doing well but then we saw a good correction in pharma. Going ahead, there is definitely a strong case for the bigger, stronger companies to do well from here.

Sun Pharma definitely fits that bill. What is your favourite lockdown trade? I am not looking at lockdown trades right now. I am still with the opening up trade.

Look at the travel tourism business and how they are booming. Hotels, airlines and everywhere, people are out shopping or travelling. I will still stick with the opening up trades and not look at lockdown trades right now.

I want to revisit some of your old ideas which you have in a sense recommended and endorsed. One of them was HDFC Ltd and the stock has done okay, If HDFC Ltd is getting its mo-jo back, where is HDFC Ltd headed? We recommended the stock and after that the merger announcement came. We saw a spike up and then the stock came down all the way to where it started from.

But I feel that the merger in the long term is going to be digested well but just because initially the bandwidth of the company, the management gets consumed in the merger process, there is always apprehension what will happen in three, four quarters when this merger process is going on. Which are the stocks where you are telling your clients that it’s time to reassess them because the template has changed? In the last couple years it has been IT and commodities where we have made a lot of money. But now capital goods – engineering stocks have also started doing well though it is not cheap like it was about six months or three months back.

But that is the sector where along with infrastructure,commodity consumers and even the banking space, the next six months to one year can be good with a kind of commodity correction we have seen. Even the credit growth in banks may continue. If inflation is the way it is and with the kind of small correction that we keep on seeing in inflation, it does not spike from these levels, then the liquidity squeeze by the RBI may not happen domestically.

If that does not happen, credit demand will be retained and so banks and commodity consumers are the space where one should be in and where one can make money. (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times) Read the now! Indulge in digital reading experience of ET newspaper exactly as it is.

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