Just a few days away from Diwali and the Sensex is already giving reasons to rejoice. After three days of continuous rally and the market touching new lifetime highs, the 12,900 level was breached by the Sensex on Monday, closing at 12,928.18 up 191.76 points. Also, it was the second-highest closing ever for the Nifty.
The rally was led by frontline IT and a couple of private banking stocks. However, the midcaps and the smallcaps did not go anywhere, although they started strong.
So what do experts like and recommend at this stage? Do they think there is still some steam left in the leaders of today's rally or do they see midcaps taking over the reins for the next rally? They give their picks...
Sandeepa Arora of India Infoline says it looks like there is still some steam left to this current momentum in the markets.
Giving her picks in the banking space, she says that it seems that like most banks, HDFC Bank and ICICI Bank are fairly priced, so it's now difficult to recommend buying them at these levels. "If you are a long-term investor, continue holding because if you look at HDFC Bank, YoY, they have been growing at 25-30 per cent. However, in the short-term they look fairly priced," she says.
In the tech space, Arora likes Hexaware, whose numbers that are still to be seen. Aztec came out with some very good numbers and so, according to her, it should show some performance. She also likes Subex.
"There are a lot of stocks out there which have value on the midcap side, but I think our top pick still would be Infosys and we continue to maintain that," she says.
Turning the focus on realty stocks, Arora says DS Kulkarni, which has its presence in one of the fastest growing cities, Pune, is a company that the brokerage has put a 'buy' on. "We put a 'buy' when the market price was Rs 260. Now that company has, if you value its land buying, itself converted to about Rs 170 per share. We have put a target of Rs 418," she says.
Another stock that Arora puts light on is Prajay Engineers, which is a Hyderabad based company. She sees growth for this company to be in the range of 50-75 per cent over the next three-four years.
On GE Shipping's demerger, she says that it is in momentum and there is going to be value post the demerger for GE Shipping. "So if you are an investor, continue to hold on because it looks like it's headed towards Rs 400 shortly," she suggests.
Nilesh Vasa, CD Equisearch gives his views on midcap technology and says that this space has not been performing so well of late. "But I feel that stocks like Tulip, Prithvi which are basically niche stocks, not purely midcap IT, are doing well. We also like Patni," he says.
On banks, Vasa says, that banking was neglected sector, but it did get into focus on valuation basis. "But now the valuation has increased "X" level, which is why you can possibly book your profits there."
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