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  • Kunj Bansal - ED & CIO, Centrum Wealth Management

    Kunj Bansal

    ED & CIO, Centrum Wealth Management

    DATE: December 28, 2015, 12:00 PM

    SUBJECT: Market outlook and stock picks for 2016



  • K


    Where do you think Cairn India will bottom out and is it advisable to invest in this stock?


    I think there are lot of variables to be sorted out for this stock. One could be better advised to invest in some stocks with better visibility and clarity of growth. If Cairn performs in short term - would be difficult for me to understand.

  • M


    I want to start my portfolio with top ten fundamentally strong, cash rich companies, but available at attractive valuations, say at 40-50% discount. Which stocks do you recommend?


    :) It is an ideal investment case which unfortunately does not exist in a real world. If a company is performing well - its valuation would not be at a discount in fact, it would be at a premium and vice versa. Any not so well performing company would be available at discounted valuation. Still, u can look at some of the stock suggested earlier such as Bharat Forge, Axis Bank, Supreme Ind. If u have a longer term horizon, u can add Sun Pharma to that list though there could continue to be stress in shorter term. Since u want cash - rich companies, most of then would be from IT or FMCG space where the valuation is not discounted. FMCG cos are trading at almost 27-28 time forward P/E which has corrected from around 30 level. To that extent, there is about 10 - 15 % correction but not 40% as desired by you. IT companies are trading around 14-15 times forward P/E. Not sure, if they will fir into your criteria.

  • T


    I am 22 year old and new to stock market. Is it advisable to opt for SIP as a safe investment strategy? Do you recommend buying Adani Enterprises and IDFC?


    Yes. It is certainly advisable to do SIPs for good, risk adjusted, inflation beating, higher returns and wealth creation over the years. Over and above this, you might have to do one-time (& regular reviews thereafter) Asset allocation exercise to determine right amount of exposure to different asset classes. As mentioned earlier, I am not greatly positive on IDFC though the stock could give returns over longer period. The reason for my lesser comfort is that historically, holding companies trade at a discount. Additionally, IDFC has some asset quality issues because of the stressed economic environment in last few years. I would like to watch an improvement in that before taking a call. Adani Ent - I don't have any concrete view as I have not looked at the stock for quite some time.

  • K


    Which is better bet between IDFC Bank and IDFC?


    In my view, both are not very great investment till IDFC Bank starts showing 2-3 quarters of sustained perf. Still, if u want to choose - go with Bank

  • R


    I hold 110 shares of NMDC at avg. price of Rs 170; 170 shares of BHEL at Rs 324; 55 shares of MOIL at Rs 318; 35 shares of ONGC at Rs 266. I am a long-term investor. Should I stay invested?


    Even if u r a long erm investor, u can probably make better return by switching your exposure of BHEL into some other stock as the visibility of improvement in its performance even in the medium term is not there. NMDC and MOIL could give you some more short term pain but since u r for long term - u can hold. I don't have any concrete view on ONGC.

  • A


    Where do you see the Sensex, Nifty by December 2016? Is it a good time to buy? What are the key risks to?


    it is always difficult to predict such numbers. We will have to keep monitoring as we go along. It is quite likely that we can see good gains till Nov and some global volatility suddenly erases all gains in Dec 2016. However, it is a good time to buy equities as we have seen valuation correcting and growth is expected to return. The risk is Oil price starting to go up, inflation moving up due to lower food grain production, perception around Govt not doing much and another bad monsoon.

  • S


    Will 2016 be the year of the mid-caps? Can you suggest a few good stocks from the mid-cap and the small-cap segments? I can stay invested for 24 months.


    We should see return of large caps as well as the valuation had corrected to give good returns. however, in medium to longer terms, quality mid caps will continue to give returns including in 2016. I have recommended lot of mid-cap stock in the chat earlier - pl have a look at them.

  • M


    Which sectors will do well in 2016 and why? Also what's your take on mid-caps?


    Some of the sectors doing well in 2016 will come from spaces like Power T & D, Roads & Highways, and Alternate Energy. The reason for their improved performance will be the investments being made in these sectors currently which will result into higher business for cos in these sectors. Needless to mention that higher business will result in improved top-line and bottom-line. Despite multiple opinions on economic pick up, govt initiatives etc. - these are the sectors where we have seen actual spending and investments taking place. Additionally, there will continue to be good opportunities from select Auto and Engineering space, NBFC and some consumption turn around themes. Select quality mid-caps with business models oriented towards generating high ROE/ ROCE will lead the outperformance.

  • M


    If gold prices remain subdued in 2016, what is the outlook for Rajesh Exports, Titan, Tribhovandas Bhimji Zaveri?


    I don't have a concrete view on Rajesh Exp and TBZ as have not looked at them for quite some time. Titan is a good quality company but in terms of stock price performance - has not given any significant returns for quite some time. Its stock price movement has been highly range-bound. while the stock has not fallen, it has not gone up also. I think it would probably remain the same way in near future.

  • R


    What is your outlook on the crude oil prices? Do we see the prices to go near $20/barrel or can we expect an uptick in oil prices in 2016? Given the scenario, how do you recommend one play with oil&gas stocks?


    The immediate term outlook on Oil is of softer prices. Some of the global analyses see it going to a level of $ 20 though it will always be difficult to predict. When we have pessimism, we take it to extreme end and so do we do in case of optimism also. For understanding and analysing global oil prices, one has to keep monitoring various developments, not only economical but geo-political as well. OPEC is one of the big factors weighing on oil price movement. With the immediate outlook of softer prices, a large part of return which had to come in R&M companies has already come in last one year and may not be there any further, like HPCL and BPCL. The exploration cos like ONGC and OIL could have negative impact in softer oil price scenario.