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Biggest rally coming in the second half of October, Nifty to touch 18,200 by Diwali: IIFL’s Sanjiv Bhasin

Veteran investor’s top Diwali pick is IndiGo, while he has identified JP Associates and BL Kashyap as turnaround stocks.

October 14, 2022 / 02:05 PM IST
IIFL Securities' Director, Sanjiv Bhasin is bullish on auto and cement sectors. (File photo)

IIFL Securities' Director, Sanjiv Bhasin is bullish on auto and cement sectors. (File photo)

The second half of October will see the best bull rally ever and Nifty will hit 18,200 by Diwali, said IIFL Securities’ Director Sanjiv Bhasin.

Bhasin was talking to CNBC TV18.

“The sheer pessimism of underweight India is changing,” he said, adding that “markets bottom out at the height of pessimism and that’s what we saw yesterday (October 13),” he said.

Nifty and Sensex climbed more than 300 and 1,000 points from Thursday’s closing as of 11.45 am today.

On a lighter note, Bhasin promised to do Bhangra at the TV studio if the level touches what he has predicted.

Also read: Live updates from the market on Moneycontrol

“Yes, there are global headwinds,” he said, adding that the Indian markets are protected by a wall of liquidity from retail investors.

“I have travelled to smaller towns in India and you won’t believe the fervour there for buying into stocks and staying invested,” he said.

“If the global markets correct, we will also correct slightly. But have no doubt that we are headed to new highs before the other markets,” Bhasin said.

Top picks

His top pick for Diwali is IndiGo because of the way air travel has picked up and the carrier’s flights are always packed. “It is a no-brainer that the stock will hit Rs 2,500 by next Diwali,” he said. IndiGo is currently trading at Rs 1,700 levels.

While naming many of the stocks in the interview, Bhasin repeated the disclaimer that his recommendations should be taken with a pinch of salt since the brokerage is invested in several of them.

During the interview, he named two stocks he believed could see a turnaround. First is JP Associates, which operates in the construction, power and cement sector among other things; and the second is the construction company BL Kashyap & Sons.

Also read: Nifty forms bearish candle, sharp weakness likely below 200 DMA

JP Associates faces a debt of around Rs 28,000 crore and ICICI Bank, which is one of the lenders, has filed a bankruptcy petition against the company at National Company Law Tribunal. Bhasin said that Rs 18,500 crore is available (to the company) through a land bank, and when this is released the company may get a breather for the rest (Rs 9,000 crore). He also pointed to a Rs 750 crore lying in an escrow account that the Supreme Court has ordered to be released and the delay in executing is because a judge in the relevant high court is on leave. Bhasin said the stock can hit Rs 30 by next Diwali. It is currently trading at Rs 11.40.

BL Kashyap, he said, can go up to Rs 75. It is currently trading at around Rs 28. Bhasin said the litigation around GST faced by the company was resolved. It is one of the largest contractors in the construction business, even servicing the Embassy Group, he said.

Bhasin sees auto and cement sectors outperforming on the back of capex and infrastructure growth.

“When in my last 30 years have I seen Cummins, ABB, Bosch, Siemens and L&T hit new highs?” he asked, adding that capex spending, therefore, seems to be rising.

Other favourites

Among autos, his picks include EicherAshok Leyland and Mahindra & Mahindra. In the cement sector, companies’ earnings are poised for growth with the monsoon receding.

“Housing mortgage is seeing the best time ever if you have heard Deepak Parekh (Chairman of HDFC) or Keki Mistry (CEO of HDFC),” he said, identifying small cap Can Fin Homes as a good call. The stock which is now trading at Rs 510 can hit Rs 750 or Rs 800 next year, Bhasin added.

“It is about to get a new external CEO, and its book is the third-largest in the mortgage space at almost Rs 50,000 crore and market cap is Rs 6,000 crore,” he said.

Moneycontrol News
first published: Oct 14, 2022 01:50 pm

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