Real mkt picture to emerge from Apr 1: Bandyopadhyay

Synopsis

Sudip Bandyopadhyay advises caution post corrections, recommends cherry picking for long-term growth. Highlights L&T as a strong investment option for India and Saudi growth stories, especially in the hydrocarbon sector. Bandopadhyay says: “We were pretty confident that we are in a structural bull phase and we will keep inching upwards. Medium and long-term trajectory has not changed at all.”

Sudip Bandyopadhyay, Inditrade Capital-1200ETMarkets.com
“We were pretty confident that we are in a structural bull phase and we will keep inching upwards. Medium and long-term trajectory has not changed at all.”

Sudip Bandyopadhyay, Group Chairman, Inditrade Capital, says “on Thursday, I think there will be a lot of adjustments and year-end transactions happening. We also have the index closures and all that. So, we have to be a little careful and we have to take today’s and tomorrow’s rates with a pinch of salt, that does not mean that I do not believe that the markets will move in a positive trajectory, it just means that on last two days a lot of transactions will be happening which may not reflect the true spirit or true value and we will probably get the real picture from 1st April onwards.”

It has been a very short-lived and swift correction and we have rebounded 8-10% on midcap and smallcap from March lows. Did you participate in cherry picking in these last two-three weeks in your portfolios or in your clients?

Sudip Bandyopadhyay: Well, I have been advising clients to do that. In fact, we were very clear that the long-term secular trend is positive. Structurally nothing has altered. It was just a phase of profit booking, consolidation, whatever name you call and in some cases a little bit of froth also was there which was going out of the market. So, it was par for the course.


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After such a huge rally over an extended period of time, some amount of consolidation is definitely welcome and it is good for the health of the market. So, we were pretty confident that we are in a structural bull phase and we will keep inching upwards. Medium and long-term trajectory has not changed at all, so absolutely right.

But having said that, I will also put in a word of caution today. On Thursday, I think there will be a lot of adjustments and year-end transactions happening. We also have the index closures and all that. So, we have to be a little careful and we have to take today’s and tomorrow’s rates with a pinch of salt, that does not mean that I do not believe that the markets will move in a positive trajectory, it just means that today and tomorrow a lot of transactions are happening, will happen which may not reflect the true spirit or true the value and we will probably get to see the real picture from 1st April onwards.

But dodging the ball here, what is it that you bought in the recent decline? Even if a sectoral colour is what you can give us?

Sudip Bandyopadhyay: I have been positive and I have been talking in your shows as well that infrastructure and construction. That remains my favourite theme and I believe that is a story which is going to run for a very long time. Look at the…

Do you concur with the view that any price is a good price for L&T for the long-term players?

Sudip Bandyopadhyay: Absolutely. L&T has been one stock which I have been buying and recommending buy for a very long time. It is a play not only on the India growth story, but also on the Saudi Arabia growth story. They are one of the most respected infrastructure companies in Saudi Arabia as well. And with Saudi Arabia rebuilding and building itself, L&T is getting multiple opportunities to participate in that growth.

Remember that these are contracts with better margins. In the case of L&T, the earlier low-margin contracts are getting exhausted and that is good for the margin profile of L&T overall. I think going forward, you will see L&T with a much better margin profile. Also, the hydrocarbon infrastructure, hydrocarbon capex has picked up in the Middle East and that definitely is helping L&T because they are a recognised player there as well.

So, considering everything, considering the way the Indian government is spending money in infrastructure, theSaudi Arabian government is spending money on infrastructure. You cannot go wrong with L&T. If you have a one-year time horizon, even at Rs 3,700 level, there is absolutely no problem in buying L&T.

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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

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Harry Byrne

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