What did you make of the up move that we are seeing in IT stocks and what are the opportunities here?
Post results, we saw a breather in most of the IT companies and that is what is coming back now. Most of the stocks have corrected 10% to 15% including TCS at around 10-12%. We like the sector and it is going to continue to do well. IT and especially midcap IT companies saw blockbuster returns this year. Going forward also, largecaps are leading it now but the midcaps will continue to do well. So TCS after the recent correction, Infosys with its blockbuster numbers and L&T Infotech which has done quite well and has still more upside left, are the three stocks one should look at in IT.
I personally feel there should be a good amount of allocation in IT in the trading as well as investment basket.
Today we have seen a very decent up move on . What do you make of that?
Aviation has done quite well in the last couple of months and following the opening up of the economy and trades, most of the stocks related to that have done quite well. So Aditya Birla Fashion, PVR and Indian Hotels — all have done quite well.
InterGlobe Aviation number should be good and post OPEC meeting, supply and oil price concerns seem to be less and that augurs well for InterGlobe Aviation.
Hindalco’s performance clearly seems to be a beat on all counts. What do you make of the earnings and what happens to the stock from here?
Prima facie, the Hindalco numbers look quite strong. So obviously, one should look at it. Most of the metal companies so far have reported strong numbers as we saw in steel companies like JSW, Tata Steel, Steel Authority, Jindal Steel and Power.
Similarly, Hindalco has shown one of the best quarters after a long time and we saw that the prices have moved up for aluminium very well in this quarter and the realisation should be good for this quarter. More importantly, we have to look forward to the management’s commentary going forward in terms of how it is going to be for Q3 and Q4. It looks very convincing for Hindalco at these levels and there is room for another 15% to 20% rise from current levels. So one should stay invested or allocate more money at current levels for Hindalco.
Is there merit in staying put with FMCG investments given the kind of high inflationary cost pressures that one has seen even though many companies have managed to successfully pass on the raw material cost pressures in terms of price hikes to consumers?
After a lot of time, there is a pinch of inflation. Hindustan Unilever is one of the best picks among them which will continue to do well. Obviously the cost has been passed on to the end consumers. We have seen in the past also that Lever makes a lot of sense in that space.
Marico is another stock one should look at. Because of the inflation, we saw the margins get hit a little bit. These two stocks remain attractive in the segment. Post correction, my top FMCG picks would be Lever and Marico from current levels.
