Sanjiv Bhasin, executive vice president - markets & corporate affairs with IIFL, expects stock markets to consolidate after recent selling. (Watch)
Stock Talk:
Buy Eicher Motors: Q4 numbers were in-line with estimates, but lot of that is already in price. Royal Enfield sales continue to show lot of traction. Although valuations are expensive, the stock will continue to be an outperformer. Upside of the stock will be capped at Rs 20,000 in the near term.
HDFC: Number of players in the mortgage markets is increasing, so competition may be higher going ahead. Asset quality may also deteriorate in future. HDFC stock has value around Rs 1,000-Rs 1,025.
Avoid Hexaware Technologies: It posted disappointing earnings for the third straight quarter. Being a midcap IT company, it will continue to underperform going ahead. Its earnings multiples are likely to drop to 10-12 times (of earnings per shares) from 15-16 times now.
Buy United Spirits: It is one of the best stocks to play the domestic consumption theme. It has a good brand recognition and reach. Diageo may also consider hiking its stake in the company, which would be a trigger for the stock. The stock can go back to Rs 3,100.
Avoid TVS Motor: Q4 EBITDA margin slipped to 6.3 per cent, indicating that there is something wrong with the company. At current price, the stock is trading at 20 times multiples (earnings per share). Current margins may be under threat as lower material cost is a thing of past. Right now the stock should be avoided.
Avoid Idea Cellular: The stock should stabilise near Rs 110, which is the fair value for Idea as it would be most impacted by Reliance Jio's 4G launch. Debt costs are also higher for Idea, which will dampen earnings.
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