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Ambit Capital's shopping list post Q2 results
India Inc has delivered a fairly mixed set of second quarter results, but Saurabh Mukherjea, head of equities at Ambit Capital believes the numbers were much better than what was anticipated. We are maintaining our Sensex target at 14,500 for the moment, he told CNBC-TV18.�
Next up, he said, the markets are looking towards the ongoing G20 meet for clarity on the European Financial Stability Facility (EFSF).
Europes bailout fund is delaying a 3 billion-euro (USD 4.1 billion) bond sale after Greek Prime Minister George Papandreous request for a referendum on the rescue pact for his country roiled markets.
According to Mukherjea, we could see a relief rally in the markets if there some clarity on EFSF.�
Besides that, an issue plaguing the Indian market has been the lack of reforms and Mukherjea sees little of it happening in the upcoming winter session of the Parliament.
Commenting stock specific, Mukherjea said, he expects BPCL , Tata Motors and Power Grid to outperform going forward. His other picks among midcaps include TTK Prestige , Eicher Motors and Gateway Distriparks .
He also likes Bosch and FAG Bearings in the auto ancillary space. I expect ancillaries to outperform OEMs next year, he added.
From the metal space, NMDC remains the only preferred play for Mukherjea. However, he advised avoiding overvalued consumer plays like Nestle .�����
Below is an�edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos.
Q: You have been consistently skeptical about the market. Has your view changed a bit over the last few weeks as the Nifty has come back to 5300 or you remain quite circumspect still?
A: Whilst at the market level we remain circumspect for variety of reasons such as domestic factors and global concerns, the result season has been more upbeat than we had expected it to be. What seems to stand out is that well run companies across a range of sectors seem to be able to cope with this economic downturn much better than the second rung players.
So in terms of separating the men from the boys so to speak, the result season has been quite encouraging and that's something we will look to build on in the coming quarters presuming the economy isnt going to turnaround very quickly. So it becomes that much more important to look to identify the HUL , the TCS or the Bank of Baroda of the world which seem to be doing a good job of steering the ship through stormy waters.
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