Choksey sees markets surging higher in January, bets on IT

Having corrected already 300 points, I see that possibility of going down of not more than about 100-125 points on Nifty from current levels and that could give a good base to Nifty to get stabilised,? he elaborated.

According to Choksey in the next one-two months we are going to see a good tight range for the Nifty of around 300-350 points and thereafter probably from the middle of December to January we should be seeing a further upside taking place.

Choksey?s top picks in the IT sector are Infosys, TCS, Wipro, Mahindra Satyam and HCL Technologies.

Here is a verbatim transcript of his comments. Also watch the accompanying video.

Q: We have already corrected to 6,000. How much more of a cut are you expecting?

A: The amount of cut that we could probably see is not much from current levels. We have already seen about 300 point kind of a correction which we have seen from the highs in the market. Now whether the market would further go down??it probably to a certain extent spends on the liquidity factor, which is showing some amount of kind of a volatility currently. More importantly because the dollar as a currency is gaining relative strength compared to euro in current times and as a result of which the general tendency of the investors globally would be to stay with the dollar currency and investment in dollars. To an extent you may not see the kind of liquidity which we have seen in recent past and as a result of which it can possibly drag down the market to a certain extent. But having corrected already 300 points, I see that possibility of going down of not more than about 100-125 points on Nifty from current levels and that could possibly give a good base to Nifty to get stabilised.

In fact, I do see that in the next one-two months you are going to see a good tight range happening for the Nifty of around 300-350 points and thereafter probably from the middle of December to the beginning of January or middle of January you should be seeing a further upside taking place. But overall the earning momentum would provide good impetus to the market for future growth as I see it currently.

Q: What have you made of the technology numbers that have come so far? HCL Tech just reported and the growth has been so strong be it HCL Tech, Infosys. How would you play these stocks and what would your preferred picks be?

A: HCL Tech probably on one count to a certain extent disappointed. Maybe the forex loss that I see from the reported numbers, to a certain extent, it?s been on a relatively on higher side maybe this was not factored in by us while working out this numbers. The euro currency may have played its role, looks like at this point of time. I think more important part is that the companies are basically trying to grow in a double-digit and that is very important and this company has also shown that kind of growth at the top-line level. That gives good confidence.

As far as the valuation goes probably they are not very expensively traded like HCL Tech on a forward earning estimate basis is getting somewhere around closer to 17 times whereas average for the midsize-IT companies could be around 16 times, they are not very expensively traded. If they show better promise for the growth at the bottom-line level as well then in my viewpoint there would be some buying interest returning back to likes of HCL Tech or Mahindra Satyam and probably would see more amount of action happening in that particular area.

In frontline IT companies, we do like Infosys, TCS and Wipro but at the same time we don?t see too much of headroom for these companies in given situation unless some amount of inorganic growth takes place. Otherwise the larger opportunity should be see in likes of Mahindra Satyam and HCL Technologies.

Q: What are you thoughts on Oberoi Realty? Where do you see it listing and what is the fair value according to you?

A: On the whole, if you look at this particular company, I like the business model because its one of the better model?it is an asset light model. I like this particular business because they have good amount of properties under execution for which they have demand in Mumbai market. That is why I am positive in this company. But if you are looking at the valuation currently at which they have placed this share, they are not as cheap. Probably they are among the expensive lot as far as the valuation goes. From that perspective I don?t see too much of follow-up buying happening immediately on the listing and maybe you could see between 3-5% kind of a discount happening on this stock over a period of time after listing.

If one gets this stock relatively closer to somewhere around Rs 225-240 levels?that maybe the first entry point even though have to pay some premium to the business model that this company assumes.

Q: What would your thoughts be on both of these Piramal Healthcare and Biocon?both of them news based?

A: I find Biocon quite interesting and definitely the stock could get rerated going forward as well because Pfizer kind of a deal is something that definitely in a short to near-term is a good point and at the same time the assurance to get the higher amount of income also again of USD 150 million over a period of time and that itself is a very good point as far as this company is concerned.

In my viewpoint the way in which insulin market for which they have tied up with Pfizer, I see good amount of prospects happening for Biocon. This company has struggle for long period of time in getting into this kind of developments and probably the better times are going forward ahead for this company. So certainly I would like to have Biocon as far as investment choice is concerned.

We are the Best share market tips and stock tips provider in India for Intraday trading of cash , Nifty future and Nifty Options.We give only sure shot tips so that you can trade with high volume