The Indian stock markets are soaring like there is no tomorrow. Starting at 13,000 in the beginning of this year, the Sensex crossed 20,000 by October.
Will the Sensex sustain the gains or will it go down again?
Where is the stock market going? Will it rise further? Or will they crash again? What should a small investor do in such a scenario? Should he hold on to his stocks or sell them? Should he buy stocks now or stay away from the market?
Market expert Pranav Sanghavi answered many such readers' queries in an hour-long chat on Wednesday. Here is the transcript:
PRANAV SANGAHVI says, Good afternon and welcome to the chat. Let's begin.
karan asked, Good afternoon Pranav, what should be the strategy for next two months if one wants to buy some quality stocks.which sectors/stocks should one look for with a short term(say about 6-9 months) and with a long term(a few years) time frame in mind.
PRANAV SANGAHVI answers, at 2007-11-28 11:59:42Hi Karan, I would go with the cement, power, banking ad infrastructure stocks. You could look at stocks like DLF, GMR, SBI, NTPC, Pwer Grid, Guj Amb, Grasim etc.
ps asked, I got 15 Mundra port at IPO price. Should I hold or sell ?
PRANAV SANGAHVI answers, At current status the stock is fairly valued but on a longer term basis I think the stock has potential to go up further. If you have some other investment in mind then probably you could book profits and look at some other sector.
ps asked, Can I subscribe to Jyoti Labs IPO ?
PRANAV SANGAHVI answers, They are a decent mid sized pharma player wiht a few popular brands in the market. they also have some expansion plans post the IPO so you could surely look at it.
Bharat asked, Hi Pranav, I have bought RPL 200 shares at Rs.275/-. Please advise me how to go about this particular stock.?
PRANAV SANGAHVI answers, Hi Bharat, unfortunately you have got in to the stock at very close to its highs. You may not see your price in the very short term but if you can hold on then you will surely see profits beyond 6 months.
kumar asked, hi good morning sir, Can i invest in essar oil.. if so what is max. price at which i should buy?
PRANAV SANGAHVI answers, Good afternoon Kumar. Essar Oil has most things going for it. The Promoters are putting in money at close to market levels and not a discounted rate. The Oil refenery segment in our markets is getting rerated. I think you could surely hold on to the stock with a long term view. But the gestation period is also a bit longer than RPL.
ps asked, What are your views on Core Projects and Technologies? Can I accumulate for long term ?
PRANAV SANGAHVI answers, I don't follow that stock so I won't be able to help you sorry.
abhay asked, Iwant to invest in long term for atime period of 6 months to 1 year and some investment for 3 Years . Please suggest the stocks whic can give good returns. How about the Auto market such as Asoka Lyland for long term invest ment. Regards abhay
PRANAV SANGAHVI answers, You could surely go with the frontline stocks like SBI, RIL, L&T etc if you have a 1 to 3 yewar outlook. They will be the best performers. The Auto segment is facing a higher interest rate scenario currently but eventually when the interest rates do come down a bit the auto segment should outperform as there is good potential for growth in the sector.
karan asked, please name one company each from the following sectors(please add/delete sectors if you wish to do so) that you would like to watch/look for in the coming months: banking, infrastructure, cap goods, power, IT/Software, engineering/tech, pharma, telecom, etc
PRANAV SANGAHVI answers, From the sectors you have mentioned Iw ould look at SBI, HDFC< ICICI, DLF, Unitech, Gmr, Indiabull Realty, L&T, BHEL, NTC, REL, Infosys, TCS, Wipro etc.
ps asked, Can I enter RIL and REL at current levels ? Am a long term investor.
PRANAV SANGAHVI answers, From the highs of the market it has corrected marginally already. But I would still wiat for a minor correction before I jump in to the frontline stocks. As a long term investor you could surely pick up the stocks in parts on evr dip.
kumar asked, i had purchased DSQ software 300 nos. 2 years back @ appx. Rs. 50/-. Will the company be listed again?
PRANAV SANGAHVI answers, It has serious SEBI irregularities and has been penalised. Even the promoters have faced a lot of problems due to their un ethical dealings in the markets. I doubt it seriously.
ps asked, What would be a good level to enter SBI ?
PRANAV SANGAHVI answers, Keeping the rights issue in mind you could enter even at current levels to get the rights benefit. If you are holding on to the stock witha long term perspective.
kaps asked, is buying infosys in this 52 week low a good decision.
PRANAV SANGHAVI answers, I think Infy will continue its 20% plus growth in dollar terms atleast. It may still face the problem of a weaker dollar in the coming year too. But with a longer term view you could look at it. Although Infy did look attractive at 1750 and it went down to 1500 levels.
ps asked, Can I enter Tata Steel at current levels ? How much appreciation is likely in a year ?
PRANAV SANGHAVI answers, I would surely look at Tata Steel witha longer term outlook. In a years time you could easikly see a 20 to 30% return from current levels. As the profits of Corus get built in and its debt is reduced the profitability of the company will rise substantially.
b asked, Will the Sensex sustain the gains or will it go down again? Where is the stock market going? Will it rise further? Or will they crash again? What should a small investor do in such a scenario? Should he hold on to his stocks or sell them? Should he buy stocks now or stay away from the market? Did you make profits while the Sensex scaled dizzying heights? How do you plan to consolidate your gains? What should your investment strategy be now? Should you invest more in the market? Should you consider selling a few stocks? What would be the best stocks to buy, sell or hold at this juncture?
PRANAV SANGHAVI answers, Every meteoric rise has to be followed by a correction. The markets could correct marginally further backed by either news from global markets or some local factors. But overall on a longer term our markets still remain in a bull phase atleast for the next 2-3 years. Correctiosn should be used as an opportunity to get into quality growth stocks.
ps asked, What are your views on ABN Offshore ? Can I enter at these levels for long term play ?
PRANAV SANGHAVI answers, Well it is a large player in the offshore drilling business. You could surely look at it with long term outlook.
kumar asked, i purchased OBC (Rs.240), UCO (Rs. 61), Ispat (Rs. 39 & 48), Souther Ispat (Rs. Rs.16.60) and MRPL (Rs. 87.20). Kindly advise on holding/selling. Thanks
PRANAV SANGHAVI answers, OBC, UCO and MRPL could be held from the pack you mention. The others you could sell and book profits unless the company comes out with positive news.
kumar asked, Will Welspun India will surge further? What is the maximum it is expected to go?
PRANAV SANGHAVI answers, Wellspun has had a good run over the past year. Now it should grow in tandem with its results and news flow.
VVR asked, Dear Pranay, Good Afternoon, Your advice on Telecom Sector Idea @ 110 RCOM @ 550. Holding these for 5 years is a good bet or booking part profits regularly is ok pls advice
PRANAV SANGHAVI answers, Good
afternoon VVR, India's telecom sector is te fastest growing sector in the whole world. I would surely hold on to both Bharti and RCom. The new regulatory rules may cause some short term ruffles in the expansion plans of these companies but on a longer term the stocks will outperform the markets.
ps asked, What are the risks of entering a low liquidity stock like Lakshmi Machine Works ?
PRANAV SANGHAVI answers, The risk is of getting stuck with the stock when you wish to exit. If there is some negative news and there is a market wide selling you will not be able to exit the stock.
ravii asked, hi sir can i purchase religare & mudra port at this levels...?
PRANAV SANGHAVI answers, I would wiat for a small dip with a view to hold on for a longer term.
gauravbe asked, Can I buy STC (State Trading Corporation) at current level? What is the next target? They have announced bonus
PRANAV SANGHAVI answers, You could look at it with a view to receive the bonus. You could then take a cal lbeyond its Decemeber quarter results.
gauravbe asked, Can I buy English Indian Clay at current level? What is the next target?
PRANAV SANGHAVI answers, I don't follow that stock so will not be able to help you.
karan asked, Please suggest some good books on valuations, analysing financial statements/balance sheets. i would prefer some good text books rather than some general books.thank you.
PRANAV SANGHAVI answers, The BSE offers some good courses on Fundamental valuations and studying companies balance sheets. You could take up that course.
vinyl asked, Please advise me on share with low market price, but can go upward and reward in near future.
PRANAV SANGHAVI answers, You could look at Idea, Power Grid, IDFC etc.
manas asked, i hane bharti@950 what is the future next month
PRANAV SANGHAVI answers, I would hold on to the stock despite the nervousness in the markets over the new regulations announced by the telecom ministry.
nalini asked, hi sir i am holding RPL,RNRL tell future rate
PRANAV SANGHAVI answers, Today again there is a rumour about RNRL that it will be taken over by RIl as a settlement. If it is true then the stocks could again see some rise. If it is just a rumour it may see some downside. RPL could be held with a 2009-2010 perspectiv eas you should get 50% plus returns once the commercial production is under way.
karan asked, I am holding RIL and RComm about 50 shares each bought a few years back at very cheap rates. how long should i hold on to them. please suggest a couple of good buys which can prove to be assets in coming years.
PRANAV SANGHAVI answers, They have given fantastic returns over the last year with Rcom giving over 200% returns and RIL over 400% returns before the issue of the 4 free shares. The companies look to continue to perform over the coming years so you could continue to hold on.
kavita asked, I buy and sell shares on short time basis. Whenever i find some margin, i sell and book profit. I earned Rs. 10000/- in last 3 months. Where scrips go down in value, i hold it. I am working and filing IT Return. How i will account for these shares? Whether i am required to include in IT return about each and every purcahse and sales? Kindly reply.
PRANAV SANGHAVI answers, You short term trading profits will be rated as short term capital gains and you will be liable to pay 33% tax on the same. If your total income is below the taxable income slab then you are not liable to pay tax but surely liable to decalre the same in your return.
Mithun asked, How will RNRL, RIIL, IFCI and Power Grid will do in next 3 years
PRANAV SANGHAVI answers, I think all the stocks should do well and I am assuming that for IFCI the wining bidder for the strategic sale will have large expansion plans for the cmopany to bring it back on track.
Prakash asked, Pranav could guideline me how to start on with Shares
PRANAV SANGHAVI answers, I would suggest that you take up some basic courses offered by the training institutes of both BSE and NSE. Then consult a broker before starting to invest.
kamalnath asked, i was allotted SV Superchem at hefty price.. Now the market value is Rs. 2.99. what is the future of the scrip?
PRANAV SANGHAVI answers, The figures say it all. This is the very reason I don't propogate investments in small cap stocks which give meteoric rises and then fall off the face of the earth.
dpshewale asked, what is ur opinion about teledata
PRANAV SANGHAVI answers, There were talks of the company demerging and givng 3 to 4 free shares of subsidiaries under the scheme. But no forthcoming news on its update has been received. So I would continue to hold on.
aravindsr asked, hi wat do u think about RPL and wat about TATA MOTORS.. it reached 800+ and all of sudden its not in 710's wat do u suggest on these 2 stocks?
PRANAV SANGHAVI answers, Tata Motors is facing the higher interest rate factor. Once the interest rate scenario eases and is lowered tehs tock should start climbing up again.
aravindsr asked, wat about RELIANCE ENERGY , i bought it at 1865 and not its in 1760's wat do u suggest....
PRANAV SANGHAVI answers, If you are a long term player you could surley continue to hold on. India is a grossly underpowered country and REL has plans to set up huge projects in the coming futurte which will benefit its top and bottomlines.
kRISHAN asked, cAN U PLAESE ADVISE THE mARKET UP NEXT TWO MONTH
PRANAV SANGHAVI answers, December may remain rangebound due to lack of FII flows and participation. But beyond that and Decemeber quarter results I think the markets should spurt up again.Liquidity is the driving factor right now in our markets. If we see sudden spurt in liquidity the markets could rise again.
cheeta asked, sir dlf
PRANAV SANGHAVI answers, Its a good hold and buy on dips.
mahesh asked, I have invested 5000 in reliance gold ETF the share allotaed is 4.84 units.I have deallotaed the units so when can i get the refund.
PRANAV SANGHAVI answers, If all you r money is invested then I dont think you shoudl get a refund. You will have to multiply your units with the NAV of the Fund.
gaur asked, I hold NTPC 50 shares @ 235/- .. Please let me know the expected trend in next 10-15 days
PRANAV SANGHAVI answers, I won't be able to give you a picture for 10-15 days but over the longer term you will surely see an upside to the stock.
syam asked, In current market trend, how you will suggest to invest in Mutual funds with Only Infrastructure series only, let it be any series.
PRANAV SANGHAVI answers, Infrastructure looks to grow at a rapid rate in India. Any infrastructure fund should perform well over the next few years surely.
nita asked, Hello Sir, Can I subscribe for Reliance Power IPO? Sir, Pls advice as this will be my first IPO.
PRANAV SANGHAVI answers, yes you could invest in the IPO.
arun asked, want to invest rs 6000 every month thru SIP's. please suggest suitable funds. preferably equity funds
PRANAV SANGHAVI answers, I would look at large cap iversified growth funds like DSP's Tiger Fund, HDFC's Growht Fund, Templetons INdia Opportunity fund etc.
PRANAV SANGHAVI says, Well it was great chatting with you guys but it's time for me to leave. Hope to see you'll next week. Bye for now.
Chat with Pranav every week!