Despite weak global cues continuing for some time, Indian stocks were in great demand, especially auto, pharma, IT and metals stocks. On July 6, this lifted the Bombay Stock Exchange's benchmark 30-share Sensex past the magical 15,000-mark.
The unprecedented Bull Run started on May 6, 2003 when the Sensex was at 3,001.21 level. In took just 67 trading sessions to cross the 4,000-mark and touch 4,026.27 points on August 19, 2003.
Did you make profits while the Sensex scaled dizzying heights last Friday? 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?
Market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such readers' queries in an hour-long chat on Friday. Here is the transcript:
PRANAV SANGHAVI says, Good afternoon everyone and welcome to the chat. Let's begin.
jamal asked, i hv 10000 pentium infoteck share pl advice me
PRANAV SANGHAVI answers, at 2007-08-24 12:04:41I would switch to a quality stock in the tech sector.
shashi asked, what can i do for sugar sector
PRANAV SANGHAVI answers, I think the sugar sector will remain a bit of an underperformer for some more time. Unless the government intervenes and adds some sops for the sugar sector. You could look at exiting the sugar sector and look at some low PE cement sector stock.
gaurav asked, can u please advise me on whether to buy or sell shares of tisco in the current situation
PRANAV SANGHAVI answers, Right now all the metal stocks are taking a slight beating. Tisco is a commodity stock and it will tend to be cyclical. But if you are a long term player and can hold for 2 to 3 years you could look at it.
NIL asked, DEAR SIR GOOD MORN PLS TELL THE FUTURE OF PIRAMID RETAIL I PURCHASE @64RS. TODAY IS 49RS
PRANAV SANGHAVI answers, Pyramid Retail is a part of the Ajay (Nicholas) Piramal Group. They do have plans for setting up medium sized mall formats all over the country. Their retail foray has not met with great success. But they are finalising plans to raise further funds for expansion to develop more malls. I would hold on.
vaishali asked, i have idbi ( share) rate 128 wt can i do
PRANAV SANGHAVI answers, Surely hold. It also has a large investment portfolio and the banking sector also looks positive for the next few months.
shiva asked, i have 1000 reliance communications @ 555.i can hold on for 6 months. pls advice
PRANAV SANGHAVI answers, RComm is surely amongst the top two players in the telecom sector in India. It has big plans going ahead and I would think you could even accumalate more stock at lower levels. Surely hold.
shals asked, what do u think is the future of Hindustan Zinc and Microtek. I hv huge positions in these.
PRANAV SANGHAVI answers, Hindustan Zinc has been rangebound for quite some time. The company being in the metals segment the prices will fluctuate from time to time depending on the local and international prices of the metals. Hind Zinc though is a fundamentally strong company. I would hold.
vaishali asked, i have infosys ( share) rate 2000 now it is 1800 some thing wt can i do
PRANAV SANGHAVI answers, It looks difficult for the Tech stocks to bounce back as quickly as they have fallen. With a steady pressure on the dollar to depreciate I think the tech stocks will take that much more time to bounce back. At these lower levels you could buy in parts on major dips. Albiet with a long term outlook.
NIL asked, FUTURE OF MANGLORE CHEMICAL AND FERTILISER I PURCHASE@28 HOLD OR SELL THIS ONE
PRANAV SANGHAVI answers, All the fertiliser stocks have witnessed some sort of a mini rally. I would book some profits and hold the balance.
abhishek asked, hi, how should we as normal investor these fluctuations happening specially downward in the market
PRANAV SANGHAVI answers, One should not panic. Corrections are a part of the game and if you are a longer term investor and if you have spare cash I would use these large declines to pick up quality stocks.
manu asked, Sir, GMR industries are trading in market for more than a month due to slip, when it will come again in market and what is your view this stock and this sector ?
PRANAV SANGHAVI answers, All the real estate stocks are witnessing a volatile phase. I think eventually they will recover as a lot of foreign money is waiting to get into infrastructure and real estate stocks.
Amit asked, Going forward where do you see the sensex
PRANAV SANGHAVI answers, I see it making new highs next year. But in the very short term as I had said a month or so back I still feel the markets will remain volatile.
deepak asked, IFCI future ( specifically about stake sale)
PRANAV SANGHAVI answers, I think IFCI is a turnaround story. Its investment portfolio has gained in value handsomely. It does have a lot of NPA issues to resolve yet. Once they are behind the company I think the stock will do well. Especially if they do manage to get a strong player to partner them through the stake sale. The funds raised would help IFCI reduce their NPA's and also help it to grow their business.
Manoj asked, Sir, what yr. view in the current situation of small investors..what to buy?
PRANAV SANGHAVI answers, I would look at frontline Engineering, Cement, Real Estate, Telecom and Banking stocks.
ANIL asked, should I invest in MF at this time or Wait ?
PRANAV SANGHAVI answers, This would be a good time as the markets have already corrected over 10% in the last month and they may correct marginally more. But beyond that and the consolidation phase after I think they should move up gradually.
samir asked, Please advice regarding RPL RIL & ITC 6-12 months target price / expected result. Should I buy more for 3-4 months target?
PRANAV SANGHAVI answers, RPL could gain another 15 to 20% from it current levels. RIL is a heavily weighted index stock but in a bullish market it should give a decent return. Especially with the large expansion plans of RIL. ITC has been a range bound stock for the longest of time. ITC may not outperform the market. Althou huge delivery based institutional buying has taken place in the stock in the last two days with over 60% of the volumes resulting in deliveries. They also are planning a large investment in the booming Hotel and Liesure sector.
samir asked, Please tell us regarding Tech mahindra & IVR Prime
PRANAV SANGHAVI answers, Tech Mahindra is a fundamentally storng script and a good performer in the Tech sector. I feel the only reason its coming down is the Dollar weakning. IVR Prime is a sister concern of IVR Infra. Its still a relatively new company but going by their past performance they should do well.
mkumar asked, Sir, Is it the right time to buy Reliance Communication, L&T, BHEL & ABB for a period of one year.
PRANAV SANGHAVI answers, Yes absolutely. Especially the days the markets are down like 400 to 600 points.
Jaideep asked, What are the prostects of Arvind Mills and RNRL?
PRANAV SANGHAVI answers, Arvid Mills much like other textile stocks may remain an underperformer. But RNRL could be looked at with a 6 to 12 month outlook.
Ashok asked, Views on Merck India
PRANAV SANGHAVI answers, It is a strong MNC player in the pharma sector. I would hold on.
pallavi asked, should I invest in Forties right now and what about Flex and Patel Integrated.
PRANAV SANGHAVI answers, Do you mean Fortis Healthcare? I think the issue was not priced right and I would wait for a few quarters of results before taking a call.
rkmm asked, How long Technology Shares will take to bounce back?
PRANAV SANGHAVI answers, It looks to be atleast 2 to 3 quarters before they come out with a strategy to overcome the dollar depreciation.
sethuraman asked, at what level in sensex, market may see strong buyings?
PRANAV SANGHAVI answers, At 13,800 there has been strong buying by local institutions. but there is marginal support even at 14,200 levels.
Mayuresh asked, HI, What is future of Nagarjun ferti, RPL and IDBI
PRANAV SANGHAVI answers, I would stick with IDBI and RPL. Both should yeild you decent returns over the next 6 to 12
venkatrao asked, what about IFCI CALL OPTION STATUS
PRANAV SANGHAVI answers, It depends which strike priced Call Option you are looking at.
pallavi asked, I have invested PFC and I am getting 60% absolute retrun should I keep this stock or not?
PRANAV SANGHAVI answers, You could deifnately book some profit as it is not directly into the power sector but more of a finance company.
stockfreak asked, Hi Pranav, are mid-caps better buy now or large caps?
PRANAV SANGHAVI answers, Hi Stockfreak, midcaps get hit highest at times of correction and take that much longer to recover. But if you do your study and ween out quality mid cap stocks you may get a few at decent valuations. But with large cap stocks you will be that much safer at times of corrections and rallies.
SP asked, Hi Pranav,what is your long-term view on DLF and pahrma stocks like Cipla,Ranbaxy ?
PRANAV SANGHAVI answers, I think DLF is one of the largest player in the organised real estate arena. They have delivered funtastic first quarter results with a little over Rs. 1500 crores in net profit on a top line of Rs. 3000 crores. If you just multiply that with 4 you get a net of Rs. 6000 crores for FY08. That itself would be a great performance. I would look at Dr. Reddy rather than a Ranbaxy. And a Dabur rather than a Cipla.
mallik asked, i have purchased Welspun India at Rs 125 one and half year back. Now it is traded at half the price. Let me know the out look of the stcok and should i hold for soem more time or sell it now.
PRANAV SANGHAVI answers, You may not see great appreciation in the stock in the near future. If you can book a loss I would swithc to a growth sector like telecom.
venugopal asked, hi good afternoon.i hold 600 shares of kajaria ceremics at 45 average price,bsel infra at 88 average price 750 shares and k sera sera at 29,350 shares. iam losing huge lot of money by selling at current levels. please advice me what should i do now?
PRANAV SANGHAVI answers, If you do hold on over a longer time you may see your prices. but These are all mid cap or small cap stocks and when such huge corrections come they get hit the most. I would get out these stocks and stick with quality stocks.
Thiru asked, Is this the time to make lump-sum investment in MF for the 3 years time?
PRANAV SANGHAVI answers, You could look at large cap diversified funds. It would be a good time with a three year time frame in mind.
vilas asked, is it IPO's r best to invest in?
PRANAV SANGHAVI answers, Not necessarily. It depends onv arious factors like the quality of the company, the price of the issue etc.
rvveer asked, How is praj industries at todays level
PRANAV SANGHAVI answers, I am still bullish on Praj even at todays level. I have been recommending the stock since it wat around Rs. 100 when it was Rs. 10 paid up.
Tanya asked, Good afternoon sir, Please tell your views on MRO-TEK and D-Link
PRANAV SANGHAVI answers, Good afternoon. MRO TEK i dont follow. But D-Link it a decent player in the hardward side of the Tech sector stocks. It is not dollar dependent and I think one could surely look at it.
Arup asked, Hi, can you throw some light on the future of Dish TV
PRANAV SANGHAVI answers, The Direct to Home business is still in its nascent stage in India. It looks to grow over time. I would hold on.
ajayg asked, Hi, ORBIT CORPORATION...what is your take on the same?? Will we see 500 levels soon? PLease guide???
PRANAV SANGHAVI answers, Orbit is a niche player in the real estate segment. Most of its developments are in the lucrative Mumbai area and especially South Mumbai area. They have a knack to acquire older buildings at lower rates and create new structures and sell them at very high premiums.
rvveer asked, Sir what is your views on Bajaj Auto demerger
PRANAV SANGHAVI answers, I think the stock should be held. After all along with Hero Hond it is the leader in the two wheeler segment.
goel asked, hi i invested in 100 shares of PETRONET LNG at 62.00 before 1.5 year. and then purchased 50 shares at 46.00 8 months back. Please suggest whether I should continue or exit.
PRANAV SANGHAVI answers, You could hold on. They have acquired two new ships recently and also have expansion plans on cards. So going forward you should see some price appreciation.
Arup_kon asked, what is the prospect, already i am having 18000 @84.So how much by March ,2008
PRANAV SANGHAVI answers, Which stock are you referring to?
mallik asked, how is the textile sector is doing now,is it the right time to purchase soem of the textile stocks
PRANAV SANGHAVI answers, It has been an underperformer. And it looks to remain so for a while.
rvveer asked, Sorry I want to know how is BHEL at 1600
PRANAV SANGHAVI answers, Definately a buy with a 6 to 12 month outlook.
singh asked, What are your views about investing in RPL, TCS, Dev Cr Bank at the current prices. Pls advise
PRANAV SANGHAVI answers, I would look at the former two rather than the last.
chanda asked, hello sir i m having 20 shares of INDRAY at the cost of rs.1403 should i hold it orsell it at current mkt price
PRANAV SANGHAVI answers, Sorry I dont follow that stock.
hemant asked, what do u feel we should do in such market situation
PRANAV SANGHAVI answers, Stay calm and not make decisions in panic. When the markets are really down on a particular day buy about 10% of what you intend buying of a quality frontline stock. In three months you should see decent returns on that investment.
srini asked, hi pranav....i have purchased 25 shares of RComm at 506 and 20 shares of DLF at 570..plz suggest as to how long should i hold...i am a long term investor
PRANAV SANGHAVI answers, I think beyond the March 2008 results in April you should see decent returns on both these stocks. They can surely be held for longer period than that too.
srini asked, hi pranav.what is the future of power trading corporation...i have bought 100 shares at 170...
PRANAV SANGHAVI answers, With the Power sector loking to grow steadily so will PTC.
r asked, which is the good share to buy at current levels..?
PRANAV SANGHAVI answers, You could look at SBI, L&T, BHEL, IDFC, NTPC, DLF, etc.
chanda asked, hello sir what is the prospect of hindalco(50 firstname.lastname@example.org)?
PRANAV SANGHAVI answers, Hindalco is a fundamentally strong stock. But it has a large acquisition on its hands much like Tisco and also it is in the Metals sector which are cyclical like most commodities. But you could hold on with a long term view.
DEVA1 asked, WHAT ABT REL COMMUNICATION
PRANAV SANGHAVI answers, Hold and buy at lower levels below Rs. 480.
email@example.com asked, given the subprime issue and the political instability on account of nuclear deal, do you think that the market is good in the long run. i am looking at a 10-15 year horizon.
PRANAV SANGHAVI answers, Both these situations are not long term problems. I think our economy is in a growth phase for atleast the next 4-5 years. If our internal corporate performance slows down then we should be worrying.
stockY asked, i am more an investor rather than regular player of stockmarket and a newbee at that too. what yould be your advice to me. should i buy now or wait a few days more?
PRANAV SANGHAVI answers, You could buy when the markets are correction buy you will have to pick quality frontline stocks. I would recommend you brush up on your study of companies also before plunging in.
jk asked, pranav do you feel that the markets can absorb further shocks in the coming days
PRANAV SANGHAVI answers, One cannot rule out further shocks due to global or local factors. Global especially since the FII's are extremely active and fairly large players in the Indian markets. Plus with our large F&O built up positions the market is also very sensitive to any kind of negative news and reacts quickly and sharply. I do not rule out volatility in short term.
PRANAV SANGHAVI says, Well it was great chatting with you all. But I must go now. Bye.
Chat with Pranav every week!