Is he market out of 'Satyam blues'? Or is it going to fall further drives by the Satyam fiasco? No one knows the answer as more and more skeletons are tumbling out about the Satyam scam.
In such jittery times, what strategy should you adopt? Which stocks to buy, sell and hold?
In an hour-long chat on Wednesday, stock market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such queries. Here is the transcript:
riyas asked, Hi pranav, What is your take on Aban offshore and L&T. I have 45 L&T and 850 and 20 Aban offshore at 1300. Thanks.
PRANAV SANGHAVI answers, at 2009-01-14 15:19:05I like both the companies. We may see a dent in L&T's profits due to its investment in Satyam where they could take a hit of Rs. 300 to 400 crores if they account for mark to market losses. But overall their business is in good shape and should continue a decent performance all through 2009. Aban is a great company with strong fundamentals. I would look at the stock in a correction with a long term outlook.
lathu asked, Will the market retest october low again. When the market will start recover. Is it after election.? What are stocks you would look for investment with 2-3 years horizon. Thanks.
PRANAV SANGHAVI answers, I do feel that we should test the October lows once before there is a stabilization phaze. I would look at that as a buying opportunity for the long term. Not much has changed, I still like SBI, L&T, NTPC, IDFC etc.
maran asked, Hi pranav, Is there any chace of recovering Satyam shares. What is the future of satyam. Is our govt. takeover the company? Please advice.
PRANAV SANGHAVI answers, I think it looks extremely difficult for Satyam to recover from the major blow. With due respects to Mr. Parekh and his abilities, I think a lot of the major clients of Satyam will start moving to other IT majors pretty soon. It is already a week since the news breakout and yet there is no clarity on the status of company's finances, managemet etc.
Khan asked, Hi Pranav, Is there any company following Satyam footsteps. There are some news about Tech mahindra and Unitech, Tata motors. what about their balance sheets. Are they strong enough to withstand these kind of crisis? I have 35 unitech and 25 Tech mahindra and 20 TELCO. Kindly advice.
PRANAV SANGHAVI answers, There are tons of rumors floating around as invetors have lost faith in the promoters and now believe anything is possible. There were rumors about Rolta and despite the management denying it the stock tanked on the rumors. Simillarly, there will be 100 other companies where there could be rumors. One can really not be sure. But I doubt Tech Mahindra would follow suit or Tata Motors too. Both companies are from a very high pedigree of promoter groups of India and would never resort to such activities.
naveen asked, HI pranav what is your take on realty sector stocks like parsavnath, Unitech, Lanco. I have 200, 150 and 50 shares respectively which are purchased at an avg. price of 317, 168 and 315 respectively. what is your suggestion ? i am a long term investor.
PRANAV SANGHAVI answers, All of them shall face a severe cash crunch due to low sales of their finished developments. When they have seen sizable correction over the next six months you could look at picking up frontline developers like DLF, Unitech etc. The second tier realty stocks could be left alone.
Khan asked, What is your take on Infosys and HDFC Bank? Thanks. Can i invest now.
PRANAV SANGHAVI answers, I like both the stocks. Despite such negative scenario over the last 6 months both have posted excellent results. Infy gave a growth of 33% and HDFC Bank of 44%. Both would make good picks for the long term when the markets correct anytime over the next few months.
Priyank asked, Hi.. How about adding RIL @1100 to the portfolio for short term??
PRANAV SANGHAVI answers, I would not as I see the stock going very close to it's October lows. I would look at the stock then with a long term outlook considering the news flows at that juncture.
vip asked, hi, plz tell me about buying aban, abb reliance capital & rel infra
PRANAV SANGHAVI answers, I like Aban, ABB and Reliance Capital from the socks you mention. I would buy it at a correction.
Ramesh asked, I bought Satyam 1000@100, what is the prospects of Satyam
PRANAV SANGHAVI answers, Why would you buy a stock when such negative news had been announced just that morning. You have got in at very high levels and looks very difficult to see those levels in the future. Unless all clients agree to stay back and the company receives monetary benefits from the government, I don't see the stock climbing back to those levels.
naveen asked, Hi pranav I have 60 shares of tech mahendra at an average price of 1500 . I see the fundamental of the company pretty good. I am a long term investor . what is your take on this?
PRANAV SANGHAVI answers, Your entry rate is extremely high. No doubt that the company is good and has strong funamentals but price that you get into a stock also matters a lot. You could average when te markets correct with a outlook to hold for 1 to 2 years.
suneel asked, Hi pranav! i have indiabulls bought @435 i waited for nearly 6 months now to get back my money. what's ur suggestion on this?
PRANAV SANGHAVI answers, Indiabulls may take a long time to recover to your levels. You will have to wait for some time to recover your money.
anirudh asked, what about the entire infrastructure space. Most are trading at 90% down from highs. Can one expect a 500% gain from here with a 3 year timeline?
PRANAV SANGHAVI answers, I woudn't say a 500% return but a 100% return in quality realty companies like DLF, Unitech are surely possile from current levels with a 3 year time frame.
Ramesh asked, Hi, how about the aptech,geometric soft what is the prospects of these companies
PRANAV SANGHAVI answers, Aptech mainly has its revenues from operations in India. So a global economic slowdown will not affect the stock as much. But local factors will surely affect the company and it's growth could be at a slower rate this year. Geometric I don't follow sorry.
shail asked, Hi, I want purchase share of Ispat Industries. Yes or no
PRANAV SANGHAVI answers, I would not.
Ramesh asked, Hi Sir, I had invenstment in Govt securities-Mutual funds do i hold these if so how long to get the best of best returns.
PRANAV SANGHAVI answers, Mutual funds if held at an average of over 5 years will yeild you better returns than looking at them with a 1 or 2 year term. Especially the large cap diversified funds.
Mainak asked, Is Punjllyod is the future L&T?
PRANAV SANGHAVI answers, I wouldn't put Punj Looyd in the same category of L&T but yes Punj has proved to be strong performer and if it can tide through the next 9 to 12
months with a positive growth then it could surely give good returns in the long run.
sarv asked, dear sir your view on future capital kpit cummin idea.
PRANAV SANGHAVI answers, Unfortunately, Future Capial came at the fag end of a four year rally of our Markets. They were not able to capitalize as well as some of the early entrants like Motila Oswal and Edelwiess. I mean entrants in the listed sphere. For Future Capital to give huge growth in these difficult times will prove to be a challenge. I would look at the results for a few quarters before taking a call. You could look at Idea but only with a long term outlook.
Pras asked, Hi, I am suffering heavy losses, around 40% of my total investments.Shall I sell all and take a fresh position or hold.I am a long term investor.I have SAIl,TISCO,NTPC,RPL,XL TELECOM,UNITECH,DLF,SIEMENS,ALLAHABAD BANK,JP ASSOCIATES in my portfolio
PRANAV SANGHAVI answers, I think a mojority of the companies you have mentioned are fine to hold on to. A couple could be swithed to better peers in the sector. Like you could look at HDFC Bank or SBI instead of Allhabad Bank. I would also not hold JP Associates.
rkmutneja asked, what are the shares i can buy right now who will be a safe bet ..slow movers would do
PRANAV SANGHAVI answers, You could look at SBI, NTPC, IDFC, Indian Hotels, Voltas, L&T etc.
Sanjay asked, I have buyed Axis bank stocks @530. Should i sell it now @449 or can i hold it ?
PRANAV SANGHAVI answers, I would not hold on to an Axis Bank. I would much rather switch to a quality bank like HDFC Bank. But get in at the time of a correction in the market not like today when the market was 300 points up.
naresh asked, What is your take on Aban offshore and icici.ihave 30@700
PRANAV SANGHAVI answers, I like ICICI Bank with a long term perspective. The next few quarters till the interest rates don't come down further the banks may have a tough time but I see better prospects for them 9 to 12 months from now.
Rajat asked, I am purchase the 45 shares of Rpower at Rs 250. would i hold or sell?
PRANAV SANGHAVI answers, I would surely not hold on to a power or any stock which will have running capacity only 2 to 3 years from now. I would rather look at a stock like NTPC which already has thousands of MW's of power generation capacity already running.
Bala asked, Hi Pranav. If I wish to invest around 25000 in shares now, what would be ur portfolio?
PRANAV SANGHAVI answers, I would wiat fora correction and look at stocks which I have mentioned in my previous replies.
nilesh asked, Hello, How do you see Gujrat NRE Coke and KSK Energy Ventures?
PRANAV SANGHAVI answers, Guj NRE coke is a decent company. There seems to be preceived decline in demand for its coal but I don't think they will have much problem beyond say a quarter or two. So if youlook at them with a long term perspective then you could. KSK I don't follow.
gsbhatia asked, What is future of IT Sector. I am presently holding TCS 68 shares at Rs. 425/-. Kindly advice. Thanks
PRANAV SANGHAVI answers, TCS is a quality compny founded by quality promoters ie the Tata's. I doubt they will ever go the Satyam way. If at all they will be affected TCS will only stand to enefit in the face of existing Satyam clients moving to the top 3 IT vendors of Inda and TCS being one of them.
Ramesh asked, Hi sir, Global recession on finance and Tech,is hitted the investments made by individual, and also we don't know about the effect of forthcoming elections, pls. suggest when can one should enter into the equity market for maximum returns, and how much time it takes to get the max returns
PRANAV SANGHAVI answers, I would patiently wait for our markets to come close to the October lows to start investing in to the markets.
rupesh asked, when u feel market will stabilise and start upward run ?
PRANAV SANGHAVI answers, I think it will take over 6 to 9 months for markets to stabilize and then gradually move up based on corporate perfrmance. Indian economy would till be growing at over 5% as compared to most western economies would be facing negative or negligible growth. The smart money from the FII's will eventually flow back to growing economies like ours post stabilization of their own country's markets.
gsbhatia asked, Presently I am holding GAIL 96 shares at Rs. 150/- ONGC 75 shares at Rs. 475/- and Petronet 200 shares at Rs. 15/-. What is future of OIl and gas. Should I hold or sold. Thanks
PRANAV SANGHAVI answers, I don't think the Oil prices are gonn sky rocket very soon. They will also form a band from the current levels to say about US80/90 per barrel. With that scenario, I don't think the Oil & Natural gas companies would benefit substantially. Gail could urely be held of the stocks that you mention with a long term outlook.
adit asked, Hi Pranav How abt DLF@350, RCOM@350, PUNJLLOYD@250, SBI@1060, RIL@1065, REL INFRA@486, RPL@74, REL Capital@472 for Long term. Are these scripts good for long term ?????????? Thx
PRANAV SANGHAVI answers, Yes most of the stocks you have mentioned I would surely hold on with a long term outlook. I would like to switch Rel Infra and RPL.
Irfan asked, Hello... I bought Satyam Shares recently after govt take over. But the share price is going down. Should I sell it? Or is it good to keep it?
PRANAV SANGHAVI answers, Satyam could have been speculated upon at Rs. 10 but at these level I would not jump in to buy. If you are in profit you could book the same.
devendra asked, i have GVK Power 1000@26 & Sesa Goa 750@95 what should i do?
PRANAV SANGHAVI answers, would hold on to both. I like Sesa from the two and think your rate could be reached in the next 6 months.
parikshit asked, What is your view on IFCI ? If the stake sale is okayed how far can it go in short term ?
PRANAV SANGHAVI answers, I don't think the stock is going to rise sharply in the short term. Even if the stake sale is okayed, it will be a tough proposition o find a suitor in these times. I think the company missed a golden opportunity of having theSterlite group take on a strategic stake.
anuradhakota asked, Good afternoon sir. In the light of Satyam ficaso, can we suspect that some of the mutual fund houses are also publishing false figure, thereby investing in funds becomes more risky than investing directly in stocks.
PRANAV SANGHAVI answers, Not only the Mutual Funds but it could be any corporate. When a top level company like Satyam and a top 5 auditor like PWC have failed any one can fall prey to mis-representation of facts for benefit. Mutual Funds are though regulated by SEBI also so it is difficult but yet anything is possible.
PRANAV SANGHAVI says, Well its time for me to leave. Bye for now.
