Stocks to own in 20082007 was a year of records for Indian markets. We saw the highest number of 1000 marks being croseed on the Sensex. Sensex crossed six thousand marks as compared to five in 2005. Metals, capital goods and oil & gas stocks had a tear away rally giving over 100% returns. But the question now is cam we mange to give the same returns next year? Which stocks will help us give us similar smart returns? Here are some of the analyst and brokerage views on markets, sectors and stocks one can buy.
Deven Choksey of KR Choksey said, “We are entering 2008 with a lot of promises, economic fundamentals are strong and more strong are corporate fundamentals. There are good strategic plans in terms of organic and inorganic plans are in place and there is growth visibility. Rupee appreciation has made overseas assets more affordable for Indian companies. Valuations are also well placed. If Sensex sees 20% growth in FY08 then it trades at 18.5 times FY09 earnings. We had record FII inflows in FY07 and they are expected to be over USD 20 billion in 2008. There are lot of new papers coming in. IPOs worth Rs 1,75,000 crore are being planned for FY08-09 and we will see most of it coming in FY08. Thee is an increase in infrastructure spending of over USD 500 billion is being planned which is positive for the economy and will help the bull run sustain. We will also have intermediate corrections."
He further added, "Basel 2 norms are avourable for banks giving them higher valuations. Also interest rates are expected to go down next year, in the first half, which will help auto companies. Value unlocking will be seen in
DLF,
Reliance Communication and
Reliance Industries."
Choksey is bullish on banking stocks like
IDBI,
SBI. In the auto sector Bajaj Auto,
Maruti and
Tata Motors look good.In the hydrocarbon space it likes
Reliance,
ONGC,
GAIL. In the metal space he prefers integrated players like
Tata Steel and
SAIL. In the madcap space Kalyani Steel,
Bharat Forge and
Shreyas Shipping look good.
He further added that on the downside Sensex could go down to 18,500 levels and can see a upside of 24,500.
PN Vijay is also positive on 2008 as he feels that political considerations have taken a back seat and interest rates are seen softening which will have positive impact on many sectors. He further added that retail participation is also good and there is not much dependence on FII inflows.
Vijay is bullish on power, power equipment, construction, oil & gas, energy and capital goods sector. He like Karutri Network,
Punj Lloyd,
Kalpataru Power, L&T,
Reliance Ind, BHEL,
Sesa Goa,
Gujarat NRE,
Aban Offshore,
Shriram Transport Finance,
Eicher Motors.
Vijay Bhambwani is optimistic on the first half of the year. He is positive on capital goods and Technology space. He likes BHEL in the capital goods sector and
TCS in the IT space. In the madcap space he likes
Asian Paints and
Pidilite.
Devang Shah Head of Institutional sales at Sushil Finance likes power, capital goods and cement stocks. He is also bullish on midcp pharma stocks. Even he is of the opinion that first half of the year will be good. Later we could see some sideways movements and consolidation. He prefers stocks like
Indo Tech Transformers,
Voltamp Transformers and
Areva T&D.
Atul Suri is also positive on the Sensex and has a target of 22,570 and a target of 6805 on Nifty. He is bullish on themes from the education, airlines and madcap pharma space.
Dinesh Thakkar-CMD-Angel Broking said, “We expect 2008 to be another good year for the Indian stock market as it will continue to be the beneficiary of a favorable asset allocation on account of the strong quality growth being witnessed in India, which is being driven by the domestic consumption boom.”
2007 has been a landmark year for Markets which rallied to touch all time highs of 20K. The run-up in the markets was aided by unprecedented flows into the equity, with FII inflows during the year grossing $18 bn.. The liquidity flows towards India was driven by strong growth posted by the Indian corporate and high profitability of India Inc. vis-Ã -vis peers. This is also evident from the strong FDI and Private Equity funds that the India Inc. attracted."
"While at current valuations of 20xFY2008E and 17xFY2009E earnings, are higher than their historical levels, given fundamentals and continuous flow of funds towards Indian shores markets might don’t witness a significant downside. Overall we expect the markets to trade in the range 16-20x 1-year fwd earnings, which should provide an upside of at least 20% in line with the corporate growth expectations."
He further added, “The only near term risks to markets would stem from US slow down which in short term could hamper liquidity flows, however in the long run liquidity would continue to chase Emerging Economies, which are expected to be next power engines of global growth. Going into 2008 while we do not foresee a major decline in markets given strong fundamentals, however cheery picking approach at this juncture would be highly advisable especially for sectors like Infrastructure, Cap goods and Real estate where the prices in many cases have run-up ahead of the fundamentals. We rather advocate Investors to play the same through stocks in where core business is available at attractive valuations.”
In an interview with CNBC-TV18, Kotak Securities said that it expects the market to be rangebound trading somewhere in the 17,000-21,000 range. They are bullish on auto, banking, and technology segments and are bearish on telecom, cement, and TV broadcasting.
HDFC Securities is bullish on quite a few sectors like media, pipes and tubes, infrastructure equipment, education services, power transmission companies and fertiliser companies, Tejal said. They would like to remain cautious on FMCG, cement, standalone generation EPC companies, and some aviation stocks.
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