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  • Devangshu Datta - Independent Technical Analyst and Market Expert

    Devangshu Datta

    Independent Technical Analyst and Market Expert

    DATE: May 09, 2016, 12:30 PM

    SUBJECT: Is it a good time to invest in infrastructure and cyclical stocks?

    MARKETS

CHAT CLOSED. READ TRANSCRIPT BELOW

  • MODERATOR:

    Hello and welcome to the webchat with Devangshu Datta on whether it is a good time to invest in infrastructure and cyclical stocks


    DEVANGSHU DATTA:

    Hello, everyone


  • S

    SHAILESH

    Though I don't think its a good time to invest in infra stocks (if I have an option of better return giving other ones like banking or an index fund for that matter) I may be wrong as I am not an expert but my question is: 1. Why should I go for these infra funds?. 2. Do MF owners disclose the distribution percentage of the way they manage the fund? If no, then how do I get to judge the MF before investing? 3. What key things should I consider before investing. I am willing to take calculated risks. Thanks

    DEVANGSHU DATTA

    1. infra seems to be picking up - the NSE infra index has outperformed the Nifty and the Banking for past 2 months 2. They are supposed to, you can get a quarterly update 3. If the economy is recovering and this is a big IF, beaten-down infra stocks will do relatively better in the turnaround 4. Ïnfra"as a category is very broad so it contains more or everything except pharma and FMCG - hence you get a pretty broad coverage of the market


  • I

    INDRAJIT CHATTERJEE

    I bought 1,000 shares of Walchandnagar Industries at Rs 155. Should I hold or sell?

    DEVANGSHU DATTA

    Hold would be my advice. The stock's moving sideways. There is more upside than downside. Maybe you can set a stop loss at the zone of 115-120 ?


  • K

    KTHYAGARAJAN

    The present policy of the Government though appears to be pro infrastructure and growth, infra companies are already under debt burden. The Banks, too, have a debt recovery problem. Both these problems have to be set right immediately by the GOI, which I hope there is a time bound action. What are your views on these issues?

    DEVANGSHU DATTA

    Yes - the debt situation is a big worry. The GoI has to try and enable stalled projects to pick up - otherwise the money will stay stuck


  • S

    SHEKHAR RAJ

    Siemens surprised on the margins in the recently concluded quarter. What is your interpretation of the numbers and is it a good time to invest in Siemens? How about L&T?

    DEVANGSHU DATTA

    Siemens appears to have delivered reasonable results. The market reaction so far has been neutral or mildly negative L&T appears to be worth picking up, in strictly technical terms Both seem like reasonable investments


  • R

    RAMANDEEP

    Is the low-commodity price era over now? What is the outlook then for capital goods stocks? Will these companies see a squeeze on the margins going ahead? Should one then invest in infra and cyclical stocks?

    DEVANGSHU DATTA

    Is the low-commodity price era over now? For the moment, commodity prices seem to be stabilising. This will depend heavily on China's performance What is the outlook then for capital goods stocks? Will these companies see a squeeze on the margins going ahead? Commodity prices are pretty low in overall terms The real issue here is demand - if the investment cycle turns up, . Hence, cap goods companies could do well. Should one then invest in infra and cyclical stocks? The Q4 results do seem to indicate a turnaround in the cycle and so, these beaten down stocks should do well


  • S

    SHAIL CHOPRA

    I bought DLF and Unitech last year. Should I stay invested or exit?

    DEVANGSHU DATTA

    Real estate may be past the worst point. DLF could be worth holding. Unitech appears to be in deep trouble. It's a penny stock with huge volumes and extreme volatility. I would say exit Unitech


  • S

    SHAIL CHOPRA

    My broker suggested buying cement stocks today morning. Since I value your advice more, should I go ahead and buy? If so, which ones? What about IRB Infra and Punj Lloyd?

    DEVANGSHU DATTA

    Cement has seen volume gains but lower margins. There has been a pick up in construction which is the big driver for volumes. Ramco and Shree have given great returns in the recent past. ACC and Ultratech are just picking up some momentum IRB and Punj Lloyd don't seem too attractive


  • A

    AMIT KUMAR

    Auto stocks have seen a good upside since the past few months. But I missed the rally. Despite the run up, are there any stocks here that are investment worthy? I can hold for two years. What is the likely return over this period?

    DEVANGSHU DATTA

    The rally has barely begun. If the rural scenario improves (because drought is mitigated) there could be a big uptake in two-wheelers and tractor volumes. M&M, Eicher, TVS, Hero could be good buys. The auto-ancillary market is more complicated I would be cautious there


  • D

    DHANNA SETH

    Is the earnings downgrades cycle behind us as regards infra and cyclical stocks? Where do you see the Sensex by December? Which strategy will give me better returns - buying infra / cyclical stocks or buying the Nifty in the F&O?

    DEVANGSHU DATTA

    Is the earnings downgrades cycle behind us as regards infra and cyclical stocks? There are signs that this may be the case. Where do you see the Sensex by December? Depends on rain, FII attitude. It could move by 10-15 per cent in either direction. As of now, there seems more upside than down. Which strategy will give me better returns - buying infra / cyclical stocks or buying the Nifty in the F&O? Two entirely different hisaabs. Infra/cyclicals carry less risk and less leverage than Nifty F&O. I think infra/cyclicals will outrun Nifty stocks overall. (The Nifty set has plenty of infra exposure anyway so the movements will be in the same direction) but leveraged positions in Nifty F&O which are in the right direction could make more money. Vice-versa, wrong F&O view will lose much more.


  • G

    G KADAM

    I want to buy RPower and Tata Power as a trading bet for the summers given the likely high consumption of electricity. Is it a good strategy? Can you suggest any other infra related stock from a three-month horizon. I can invest up to Rs 5 lakh.

    DEVANGSHU DATTA

    I am not sure that this power demand based strategy will work but best of luck! Both stocks could give reasonably good returns - CESC and NTPC for example, have outperformed Tata Power, RPower


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