If you have been holding some cash, it can be invested and you should be buying slowly into the market, says Neeraj Dewan, Director, Quantum Securities.Would you be tempted to buy the market just yet?It is very difficult to buy at the bottom. I would say one has to look for value and when you find it, start accumulating. Also, one should stagger the purchases. If you have been holding some cash, it can be invested and you should be buying slowly into the market.
Where do you stand on the PSU basket?There is value in that basket but one cannot be buying everything. I think there are a couple of good stocks like
and Bharat Petroleum Corporation Limited (BPCL). One can look at these stocks on privatisation expectations. Also, among capital goods stocks, there is BEL which should be doing well as they have an excellent order book. So, there are PSU stocks which can be accumulated.
What else should one look at in the current market climate?Beside the PSU stocks that I mentioned, one should be looking at consumption stocks like cement. The demand for cement will continue to be good going ahead also. As construction activity picks up, there can be some hiccups because of the Covid cases but beyond that, if one is investing for a couple of years, then cement is one space and construction is another space where we have opportunity. Even real estate has picked up. That is one sector where I see growth coming back. Besides that, there will be the logistics sector which should pick up as the economy recovers. Logistics is one space where the numbers should be good and the valuation will be justified.
Where would you place your bets within the larger banking group?As far as Kotak and HDFC Bank are concerned, they are not really that cheap as far as valuation is concerned. If one is okay with 10%-12% return over the longer term, one can still invest into those stocks but if one has to play the recovery with some exposure towards corporates, then
and ICICI Bank among the larger banks would be the one where I would like to place the bets on.
I would like to go really down and look at some of these smaller banks like IndusInd Bank or even something like a
or , but I think I would rather see what is happening with the March provisions because after the Supreme Court judgment yesterday, some NPA recognition will happen now. I would wait to see the recognition happen and then get into the banks in a larger way. but for the time being I would like to look for safety towards banks like HDFC Bank or Kotak and if one needs to take some risk, may be ICICI Bank and State Bank of India.