The markets have been on an uptrend since the start of the New Year. AK Prabhakar, Senior Vice President (Equity Research), Anand Rathi tells Puneet Wadhwa that he expects the markets to witness a steep fall post the Union Budget presentation in March. Edited excerpts:


The markets have been trending up since the beginning of the year. Do you expect a correction anytime soon? Have we run up too fast, too soon?

This is liquidity driven rally and hence the run-up has been very fast without any correction. The last time we witnessed such a strong up move was in September 2010 after the second round of quantitative easing (QE2) in the US. I expect the Indian equity markets could face a major correction post the Union Budget announcement in March.

What is your reaction to the Supreme Court’s verdict on the 2G spectrum case announced this Thursday? Was this on expected lines? How do you see the telecom stocks panning out as a result of this?

The Court judgment was on expected lines and this could benefit Bharti Airtel and Vodafone. Piramal Health, which holds a stake in Vodafone, also stands to gain from this ruling.

Do you find value in any mid-cap stocks at the current level?

Yes. Engineers India, IRB Infrastructure, GIC Housing, Cummins India, Berger Paints, Indian Hotels, Raymonds, Tata Sponge, Voltas and Oberoi Realty are a few stocks that still are value buys at the current levels.

How do you see the next few quarters panning out for Crompton Greaves and ICICI Bank as far as their earnings are concerned? Is it a good time to buy these stocks?

Both, ICICI Bank and Crompton, are our top picks from a long-term investment perspective.

What is your interpretation of the sales numbers of the frontline auto companies (two and four-wheelers)? Is the worst behind us?

I feel auto sales figures are usually good around elections and ahead of the Union Budget, and this time is no different. The sales figures for the month of January 2011 have been better than our expectations. However, the stocks have already priced in most of these positives at the current levels.

How do you see the Rupee panning out in the near-to-medium term?

For the Rupee, we still maintain our target of 55-57 against the US dollar by October 2012.