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    IIFL’s Sanjiv Bhasin is bullish on these 5 stocks

    Synopsis

    Midcaps are going to double, triple or even quadruple in next two years, says Bhasin.

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    Midcaps are going to double, triple or even quadruple in next two years. So stay with players where you have confidence and visibility, said Sanjiv Bhasin, EVP-Markets & Corporate Affairs, IIFL in an interview with ETNOW. Bhasin is bullish on IDFC Bank First, NBCC, L&T Finance and Nagarjuna Construction, Godrej Properties and some of the PSUs.

    Edited excerpts:



    Everyone is saying that valuations in the broader end of the market are becoming more attractive now. Where are you finding opportunities?

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    We have seen the maximum amount of despondency in midcaps and the PSU basket and that is where the money lies. I am sure by middle of April, you should be closer to 12,000 and 13,500-14,000 by the end of the year.

    Midcaps are going to double, triple or even quadruple in next two years. So stay with players where you have confidence and visibility. It will be construction, real estate and consumption. Select auto and metals, where you have been contrarian will pay out because consumption is going to come back strongly.

    So, IDFC Bank First, NBCC, L&T Finance and Nagarjuna Construction are some of the names. I am very bullish on Godrej Properties and some of the PSUs are no-brainers. There, yields are better than anything you are getting on fixed income and select businesses are performing very strongly.

    What is happening with some of the power names -- PFC, REC or NTPC? They are all buzzing?

    I had stuck my neck out at 75 on PFC and 100 on REC. I told you 8-10% is the dividend yield, We have been too pessimistic on these PSUs. As a whole, there is so much despondency in PSUs that I have not seen in the last 20 years. They have given excellent returns -- almost 50%, 10% dividend yield and I think this is just the beginning.

    Power lenders are going to see better asset quality, better time of performance, margins are going to increase because of the NBFC imbroglio. These are in a sweet spot. Like I said, we have been very positive in this decline on some of the PSUs like NTPC, ONGC, Coal India, BEL, BEML and NBCC.

    I would suggest wholeheartedly to all investors buy the CPSE ETF because once you get a stable government, which we think Modiji-led coalition will be, you are going to see select PSUs giving huge amount of returns even after the present move of 50% upside by the end of the year.

    From the broader markets, names like Arvind Fashion are catching our eyes in retail. Are you tracking this segment?

    Yes, Arvind Fashion as a brand has been hitting circuits from the time it got listed and there were some aberration on that. I have not tracked it but I think it is a very, very superior brand and that should do well. If you wanted to play that, we have a dark horse in the shape of Monte Carlo Fashion which was purely into woollen garments and now it has got into cotton.

    We think that is a very pedigree name from the house of Nahar and that could be a select outperformer. You want to be in more visible names on a lot of sectors and stocks like I mentioned. So construction, consumption, banks and select metals are going to be outperformers. We are very bullish on a stock like Ashok Leyland where the entry into limited commercial vehicles is doing excellently well.

    Their electric vehicles are going to be launched in Ahmedabad and Gujarat and we know that a large part of the order inflow for both the buses, on the aircraft side on airport expansion and on the army side, they are going to have huge order inflows. So select stocks are going to give you huge opportunity because of the price points and we are very bullish on these themes.

    Naresh Goyal and his wife Anita Goyal have quit Jet Airways board and the stake is being reduced to 25.5% from 51%. Will there be a little more clarity now and is there headroom for upside on Jet?

    Jet has been the poster boy of management irregularities and at a time when air traffic is at its highest, it is stuck with the huge debt problems and that tells you that now banks are very powerful and resolution of errant promoters is on the cards.

    In case of IBC, NCLT, you have seen in case of the ADAG pack and other cases, wherever there are wilful defaulters, the assets will be auctioned. It is a very positive move. How well it plays out it is anybody’s guess, only time will tell.

    But it definitely tells you that there is a floor to the price of Jet. Given that at present, behemoth Indigo and SpiceJet have gained immense amount of the traffic and pressure and ease in the margins, we will go with Indigo and SpiceJet.

    Sooner rather than later, a very wilful suitor will take a stake in Jet and it will be the beginning or end of some of the woes. For the time being, there will be a lot of ifs and buts but this is a very, very welcome sign.

    What is your outlook when it comes to OMCs?

    It is very, very positive. This time the Indian outperformance is going to be even more evident because of three things -- bond yields, rupee and oil. Oil is headed below $60 in the next two months and so $70 has been a top.

    I am extremely bearish on oil, global growth is going to be to and fro. You have got yields hitting 2.4%. RBI is going to cut rates now and give you more dovish signals. Thirdly, rupee is below 69.

    OMCs are going to winners on both sides, lower crude, higher processing, higher GRMs and the rupee benefit. I am extremely positive and like I said. do not try and play it on an individual stock. Rather buy CPSE ETF as that will give you much more visibility and a lot of sectors and stocks of the prime PSUs which will be part of that.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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