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 SANGHAVI says, Good afternoon every one. Hello and welcome to the chat. Let's begin.
karan asked, Hi Pranav, Good afternoon the markets now seem to be consolidating... what do you feel?
PRANAV SANGHAVI answers, at 2007-11-21 12:03:08Yes i think they should move sideways for some more time before they resume their upward movement. There could be a minor correction also. But beyond that markets look to rise.
karan asked, which stocks could be looked at these levels for a 6-12 month outlook...
PRANAV SANGHAVI answers, When the markets correct I would pick stocks like L&T, RIL, SBI, DLF, IDFC, NTPC etc.
karan asked, some IT stocks seem to be very attractive at the moment. should i wait for some more correction in stocks like INFY, Wipro, TCS, etc or shall i start buying in small numbers... what r your favorite IT picks for long term investment... i can wait for some more time also for investing but fear that the levels might go up a bit... could you please suggest?
PRANAV SANGHAVI answers, Yes they are at extremely attractive valutaions if you look at thier histoircal PE multiples. But one can't forget that the dollar looks to slide further with the huge inflow of funds India is witnessing. This willcontinually dampen the tech sectors performance. I like all the three stocks you mention but I would not be in a hurry to get in right now.
karan asked, please give your top picks from the banking sector
PRANAV SANGHAVI answers, I like SBI, HDFC, ICICI, Uco, Dena, and some more midcap banks who look to give good results for FY08.
karan asked, please tell good websites and/or softwares related to Indian stock markets
PRANAV SANGHAVI answers, At the very high end you could look at a Bloomberg terminal. At lower end the NSE, BSE, Moneycontrol sites are pretty decent.
ravii asked, Hi sir i want to become professional in stock market plz suggest me some study material to become expert thx
PRANAV SANGHAVI answers, You could take up courses both basic and advanced offered by BSE and NSE's training Institutes. Also, ICWAI has a course specifically on Stock Markets and also NMIMS a year or so back has started an MBA course with Stock Markets as its core focus.
ravii asked, Hi sir i hve invested in TCFC Finance Ltd @61.95 for 100 shares & Lincoln Pharmace 100 shares @ 7 Rs Plz tell me feuture of this shares thx
PRANAV SANGHAVI answers, If you are making profits I would suggest you book them.
SHANE asked, WILL RPL AND RNRL COME DOWN FROM NOW OR WHEN THERE WILL BE THE NEW IPO ON RELIANCE POWER
PRANAV SANGHAVI answers, They had moved up tremendously over the last few weeks. So a marginal correction or consolidation is good for the stock. RPL on a longer term should give you good returns but beyond 1 year horizon.
SBRAY asked, WHAT WILL BE SHORT TERM TARGET OF JPHYDRO?
PRANAV SANGHAVI answers, I think the company is in a fixed price business of hydro power. They have long term fixed rate contracts. So I feel beyond a point the stocks is a bit over valued. One could surely take some profits off the table. Higher prices willdepend on their expansion plans.
SBRAY asked, WHAT WILL BE SHORT TERM TARGET OF JPHYDRO?
PRANAV SANGHAVI answers, I think the company is in a fixed price business of hydro power. They have long term fixed rate contracts. So I feel beyond a point the stocks is a bit over valued. One could surely take some profits off the table. Higher prices willdepend on their expansion plans.
po asked, Can I enter Power Grid at these levels ?
PRANAV SANGHAVI answers, You could look at the stock with a long term perspective. But get in on dips and corrections.
po asked, Can I enter Grasim at these Levels ?
PRANAV SANGHAVI answers, You could look at Grasim too with longer term outlook. It is a strong player in the cement sector and the demand for cement doesn't look to die down even beyond the next 2 to 3 years considering the huge infrastructure development in our country.
po asked, Please suggest some good small caps
PRANAV SANGHAVI answers, That question is more of a paradox. Be very careful and study the stock twice before entering the fast rising small cap stocks.
hsshukla asked, Pranav do u recommend to purchase ISPAT and IFCI at this level?
PRANAV SANGHAVI answers, You couls lood at IFCI if it corrects by around 20% but I would stay clear of Ispat unless there is official news about the company.
ushinor asked, Hi, how do you rate hindal co at this level
PRANAV SANGHAVI answers, It is a decent stock but witha long term bet. You would need to hold it for atleast 1 to 2 years.
Megastar asked, What are the prospect of Unitech, GMR Infra and Magnum ventures ?
PRANAV SANGHAVI answers, Unitech and GMR both are good long term bets. THey have large projects on hand and under development.
JO asked, Hi Pranav,I have 10 BajajAuto @2340,150 RPL @260,10 Airtel @942 your long term and short opinion on these,also which are the other hot picks in your view...thanks
PRANAV SANGHAVI answers, Bajaj Auto will really spurt when the interest rates begin to go down. Iwas expecting them to come down this last quarter but with the excess liquidity inthe marekt the government cannot afford to reduce interest rates. Somay be some time next year.
Megastar asked, What are the prospects for Sunflag iron, HFCL and Tatapower ?
PRANAV SANGHAVI answers, From the 3 you mention, I would only holdon to Tatapower. That has the best prospect for the next few years.
ARUN asked, Pranav do u recommend to purchase ISPAT and IFCI at this level?
PRANAV SANGHAVI answers, No.
Megastar asked, Where can we see Laxmi machine Works from here ?
PRANAV SANGHAVI answers, The equity is extremely small and very low floating stock too. Therefore the stock always has a perceived supply shortfall. So the stock always quotes higher than market PE multiples. But it should continue its good run.
kalyan asked, Hi pranav good afternoon. can i enter IOB,NTPC,POWER GRID at these levels . pl suggest
PRANAV SANGHAVI answers, I would suggest IDBI instead of IOB and yes NTPC and Power Grid could be looked at every dip.
mat asked, how abt religare?
PRANAV SANGHAVI answers, Religare has listed at a substantial premium to its market price. It looks fairly valued at 575-600.
I would now wiat for the next few qurters. it is now at a market cap of around Rs. 4000 odd crores.
Sahdev asked, Hi Pranav..I have bought 200 MRPL @ Rs.103. What's future growth from medium to long term perspective?Should I exit at current level or hold on.
PRANAV SANGHAVI answers, You could book partial profits and invest into other stocks.
Yogesh Sharma asked, Good Morning Sir, Sir, I have 150 share of DCW Ltd. @Rs. 18.95, 150 share of Ispat Industries Ltd.@ 42.95, 200 share of NEPC Micon @ Rs. 27.45 and 200 share of Magnum Venture, & 100 share of TTML. Give me advice to hold these stock for how mony month. Give suggestion I am long term Investor. Thanks Yogesh Sharma 9871325847
PRANAV SANGHAVI answers, You have got into most of the momentum stocks which were rising really fast over the last few weeks. They are going through a much needed correction. beyond that they may move upif their results are good.
Ravikiran asked, Pranav, Many analysts say HCL Tech is one of the best performing IT stocks. I have 1000 stocks of HCL. Pls let me know the 6 to 9 month prospects of HCL Tech.
PRANAV SANGHAVI answers, i would not go with HCL as the tech stocks look to remain underperformers. HCL also was never counted amongst the front runner tech stocks and always got a lower PE multiple than its peers. So I would look at other growth stocks.
raj asked, Dear pranav all stock analists are diplomat in their answer they only tell what to buy or hold never tell what to sell. MY QUESTION IS WHICH STOCKS SHOULD BE SOLD NOW ? I HOPE YOU WILL ANSWER THIS QS
PRANAV SANGHAVI answers, If you go through my chats from last year, there have always been times when I've asked people to sell. But if you are an investor of 3 to 5 year range and you are invested in quality front line stocks like SBI or L&T then why would someone tell you to sell. With our economy growing handsomely these stocks will also rise over the years. Right now all the mid cap stocks which have run up substantially could be sold to book profits.
ravindersignhalang asked, Hi Pranav, Kolte-Patil Developers,a Pune based real-estate company, are coming up with IPO @145 a piece. Would you advice it?
PRANAV SANGHAVI answers, Well as you mentioned Pune based they are a niche single city player. They have pan India expansion plans but how good is their execution ability in areas other than thier geographic reamins to be seen.
tanuja asked, do you really think that mkt will come down
PRANAV SANGHAVI answers, No market can have a one side run. In a perrinial bull market like ours where our bull phase could run for another 3 to 4 years corrections are bound to come every time the markets get euphoric and rise to unrealistic valuations.
KRUPAL asked, Dear Mr.PRanay Tata Motors 50 shrs @ 650 Idea 100 shrs @ 110 RCOM 100 shrs @ 550 Cairn India 100 shrs @ 111 Is it good for long term?
PRANAV SANGHAVI answers, Yes you have made good investments at good rates also. You could surely hold on to these stocks.
akhil asked, well pranav as the share price of Gujrat Minerales fell drastically 2 weeks back....can u tell me the reason why...n i would like to invest around 50000/- in the gujrat minerals is at safe n whats the future of the company
PRANAV SANGHAVI answers, WIth our growing economy the demand for steel and cement should not die down. Minerals are the raw materials for these commodities therefore all these mineral stocks started rising but went beyond realistic valuations therefore they corrected. but with a long term view you could look at NMDC, GMDC, Sesa Goa etc.
DIPANKAR asked, what is the future of Reliance capital.
PRANAV SANGHAVI answers, They have made some smart investments last year which will bear fruits inthe coming years. I had mentioned the same in my chats last year. And the stock is witnessing the results of its investmetns.
kamal asked, Hi Pravan, had bharti @890, should we retain idea, dlf and bharti stocks
PRANAV SANGHAVI answers, Yes surely, all three are quality growth stocks.
pawan asked, Hi Pranab, Can you tell me is it good time to invest or market will come down further, if we have to invest now can you tell me the good stock and target for the same
PRANAV SANGHAVI answers, The markets could come down a bit further. But you could buy in pyramid fashion on every dip as no one can time a market perfectly.
lonelymango asked, religare at 600 is worth buying
PRANAV SANGHAVI answers, I would wiat for it to correct.
naresh asked, Hi pranav, I purchased 100 shares of GMR infra at Rs. 204/- per share. Should I hold.
PRANAV SANGHAVI answers, Yes.
lonelymango asked, what is RPL's future - should I hold RPL or sell ?
PRANAV SANGHAVI answers, RPLwill yeild good results over the next 1-2 years on its stock price once the commercial production starts off.
deepa asked, hi pranav....i have 100shares of keynote corp,3600shares of aurbindo pharma &15000shares of dcw.what should i do
PRANAV SANGHAVI answers, Aurobindo is a decent midlevelplayer in the pharma sector. They mainly make generic drugsan formulations for larger companies. DCW is a small player in a few plastic and detergent chemicals like PVC, Soda Ash etc. I would book profits in the same. Keynot I don't follow sorry.
bull asked, i have 500 share of kajaria ceramics @27.20? Please tell me the long term prospect of this share. It is currently trading at Rs. 25.00
PRANAV SANGHAVI answers, With the growth in the infrastructure development in our country they should benefit to an extent from the construction boom. So you could hold on to the stock.
chakri asked, hi sanghvi i am having infosys @1500/- can i sell it as it is going down day by day or hold it for some time
PRANAV SANGHAVI answers, I think you could book a loss on it in the nextrally the tech stocks face. The last time Infy touched 2000. You could exit and enter a growth stock and later revert back to the tech stocks.
sidk asked, hi Pranav, pls let me know on Dlf .is it a good buy at Rs 930.thanks sid
PRANAV SANGHAVI answers, If you can hold for a year yes it is a good buy. But buy on every dip.
Mani asked, What is your opinion about HDFC bank, UCO bank, India Cements, ITC Ltd? Hold or sell?
PRANAV SANGHAVI answers, I would hold on to all of them as they are all quality stocks. ITC for example has reserves of over Rs. 10,000 crores. So you can't go wrong with such stocks.
ashutosh asked, i have bharti@950, what is the future
PRANAV SANGHAVI answers, I would surely hold on as they are a major player in the fastest growing Mobil market in the world. And they will surely find ways to over come what ever hurdles that the Telecom ministry may throw at them.
PRANAV SANGHAVI says, Well its time for me to leave. Regret the slight technical snitch at my end in between therefore the delay in the chat. Bye for now. Happy investing.
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