'SIP approach is the best for investors'
AK Prabhakar, Senior Vice President (Equity Research), Anand Rathi Financial Services spoke to Surabhi Roy on the market outlook and investment strategy
How do you see the markets panning out in the month of August given all the key developments lined up?
The market has been moving in a range of 200-400 points in Nifty and we feel 4,900-5,400 could be broader range of market with outperformance in Healthcare and select FMCG stocks. We expect weakness to continue among Auto segment and PSU Banks.
Global shares have edged up ahead of ECB, Fed meetings. Do you think we will get anything out of this?
Fed meeting has been postponed to September and ECB has to act on rate. We don’t expect any bigger move but if any major action takes place, India would be a major beneficiary. We have already seen $11 billion as inflow and July has been surge of inflow.
How did you read the RBI's move yesterday and What is your view on the rupee movement?
RBI move in SLR cut by 1% is positive, but many banks have higher SLR so now banks need to act to reduce SLR and lend to private sector. For next 1-2 months, rupee can be seen in the range of 54-56.50.
Are there any stocks in the large-cap space that can be sold at the current levels?
Auto shares like Hero MotoCorp, Tata Motors, Punjab National Bank, Bank of Baroda and Canara Bank looks weak at this moment, where one should avoid. Shorting is advised for smart traders only.
What is your investment strategy given the current scenario? Which sectors are you bullish/bearish on?
Given the current volatile scenario, we think following the Systematic Investment Plan (SIP) approach is best suited for the investors to get returns gradually. On the bullish side Healthcare segment looks good at this moment and on bearish side Auto Industries have been facing lot of pressures. This has become stock picker's market. Power and Financial stocks like Rural Electrification Corporation, Power Finance Corporation & PTC look good and can give significant returns. In the defensive segment, we are bullish on Emami, Zydus Wellness, Tata Coffee, Cadila Healthcare, IPCA Labs and Castrol India. From the mining space NMDC and MOIL look good at this juncture.
What is your outlook on the mid-and small-cap spaces? Do you find value in any of the stocks from a medium-term perspective?
Mid-Cap selective outperformance is very high buy quality companies with good growth and Corporate governance. Bayer Cropscience with a price target Rs 1,250, NBCC with a price target of Rs160 and Tube Investment with a price target of Rs 200 are few picks which interest us for medium to long term perceptive.
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