HDFC Bank | Titan | ICICI Bank: What to buy in case of a big market

One should be a little more guarded about what one gets into. The companies where the quarterly numbers are good where we are seeing a better growth commentary like or some of the private sector banks like HDFC Bank or or some of the auto names like Maruti. These are the names one could be comfortable buying into if there is a meaningful correction in the market, says Hemang Jani, Equity Strategist & Senior Group VP, MOFSL.


In times of crack in the market, defensives come back to the fore. IT would continue to find favour at a time when pharma is really not the most favoured sector. Are all the funds going to gravitate towards IT?
What is happening is some of the midcap IT companies are delivering very strong performances — be it Mindtree, be it LTI, be it LTTS and there is an expectation that even some of the other companies which are yet to announce numbers, will have an element of positive surprise. That is probably driving up the stocks.

Our feeling is that yes the midcap as a segment is doing very well but at some point — the valuation gap between the large cap and midcap people would raise some issues. How much can one give to a midcap company given the growth profile that they are talking about? So for incremental investment, we are far more comfortable putting money into Infosys and to some extent HCL Tech. There was a disappointment but we do find the valuations far more compelling and to be selective with the midcap IT names. Cyient or Zensar or Mphasis BFL are the names that we are comfortable buying into, but the kind of valuations and premium at which the midcap ITs are trading is a bit of a caution at this point of time.

If there is a broad based correction, where would you be a buyer? Would you venture into any of these high beta names or would you be safe and buy IT?
There are a bunch of companies that we have on our radar — whether it is from the auto space and more importantly the discretionary consumption and the entire narrative around this travel and tourism and retail space where we are expecting far better growth versus the typical consumer led names.

I think that one should be a little more guarded about what one gets into. Particularly the companies where the quarterly numbers are good where we are seeing a better growth commentary like Titan or some of the private sector banks like HDFC Bank or ICICI Bank or some of the auto names like Maruti. These are the names one could be comfortable buying into if there is a meaningful correction in the market.

Yesterday’s intraday move has got a lot of market men wondering. Are you also wondering what it means?
We saw sharp correction in – IRCTC, IEX, Tata Power and maybe few other midcap names. In any bull market, there are certain pockets which are the leaders or where there is a fancy and there is a lot of momentum based activity. In today’s market, these are the names where there is a fair bit of retail participation, a fair bit of HNI and maybe hedge fund…