Mkt to face more hardships on selling pressures: Karvy

Q: What’s your call on IT.? Has it come to levels where you think of buying or are you also worried by the environment and do you think you will get better prices?

A: We are worried about the environment, but they have been beaten down quite a lot, especially in the last two years; I am not talking about the last nine months but in the last two years they have been underperformers. So we do not see too much more of a downside for IT as compared to the market. So, IT should outperform in the market although you may see a net negative over the next month-month and half. Thus, by December end you should get extremely good valuation as far as IT is concerned.

It’s time for people to start looking at the next up cycle, because there is no point crying over spilt milk. So one should at this point of time start planning for the next up cycle because this market moves through cycle and we are somewhere possibly close to the bottom of the cycle; it could take a couple of months possibly the next three-four months or more, but it’s time to start preparing for the next up cycle.    

Q: What’s going on with Unitech. Other real estate stocks are at least putting up a bit of a fight but this one is sinking?

A: The issue is still quite bad. In fact, we have seen price coming down as far as the realty is concerned. We started seeing distressed selling at the wholesale level. Going ahead we will see distressed selling at the retail level too and that should be the end of the fall as far as these stocks are concerned. But that is still another two-three months away. So we will see some more downside for most of these realty stocks.    

Q: Would you buy either of these stocks now- Sesa Goa or Gujarat NRE Coke?

A: Neither of these two, because both are going down cycle and this down cycle will last much longer than the markets. This is surely not a time to look at any commodity related stocks.

Q: Two more trading stocks and what you would recommend over there, TTML that you use to track and Chambal Fertilisers?

A: There is a obviously a positive news in Tata Teleservices Maharasthtra, so hopefully it will hold on at this point of time till the open offer and things are over.

Chambal Fertilisers, like the rest of the pack, we do not recommend buying any stock at this point in time. Cash is king as of now and the more you hold on to cash the value of cash will keep in increasing at least for the next month-month and half, because with most of the stocks you will surely get it at lower level than where we are today.