The Economic Times daily newspaper is available online now.

    5 pharma and auto ancillary stocks to bet on now: Daljeet Singh Kohli

    Synopsis

    'Within pharma, one has to be choosey. Look at stocks which are more inclined towards the domestic market like Cipla and Sun Pharma. Secondly, healthcare as a theme will also work next year. So hospitals and diagnostics will be the stocks in focus. We added Max recently.'

    Daljeet Singh Kohli2-1200ETMarkets.com
    Minda Industries and Sona Comstar are two direct plays on EV and that will be a better option rather than going through Tata Motors, says Daljeet Singh Kohli, CIO, Stockaxis.com

    Tata Motors is the best performing stock on the Nifty this year. The stock got rerated after the electric vehicle PE deal. But that deal and the benefits of the deal will happen in FY24-25 and markets are pricing in a perfect scenario in FY22. Is Tata Motors in for a sideways consolidation because a lot already is getting priced in?
    Yes, I think so. That is the reason we had it in our portfolio and we booked at around Rs 450 so the basic reason is yes, it will take much longer time than what the market has been factoring in. The deal is very good. In autos now, I think the only play left is the electric vehicle play. Right now, what we are doing is instead of playing through OEMs or which company will garner more market share, we are going through the ancillary route. So, Minda Industries and Sona Comstar are indirect plays and even Motherson Sumi to some extent but it is too diversified. That is why probably it does not perform so well but Minda Industries and Sona Comstar are two direct plays on EV and that will be a better option rather than going through Tata Motors.

    Unlock Leadership Excellence with a Range of CXO Courses

    Offering CollegeCourseWebsite
    Indian School of BusinessISB Chief Digital OfficerVisit
    Indian School of BusinessISB Chief Technology OfficerVisit
    IIM KozhikodeIIMK Chief Product Officer ProgrammeVisit
    Is there any idea which you are looking at to invest in or already invested in when it comes to clean energy? Reliance is setting up a large hydrogen clean cell factory. The hydrogen clean energy business is going to pick up anything in the nuts and bolts sector, ancillary sector which you are betting on. Is there a company which could benefit if hydrogen fuel becomes the mainstay?
    As of now, we are deciding on the next 10 stocks for investment in 2022. Electric mobility and alternate fuel is one of the important themes. We will soon come out with additional names that we are looking at.

    Read Also: 5 IT and industrial stocks to bet on in 2022

    This time around if there is this minor shutdowns of multiplexes, gym, cinemas, how do you think markets will react to this?
    I can surely say that every successive lockdown will have much lesser impact on the economy. Markets understand that and probably they will not be as severe as they were in the first wave. The only difference this time is that during the first wave, people did not know what is going to happen but at least there was one solace that the central bank is behind you and the government will support. This time, the issue is totally opposite. ALl the governments are talking of reducing the fiscal stimulus and central banks are talking of tightening liquidity. Both these are negative for equity markets and that is why we are saying that probably in the next few months, there will be a lot of volatility and markets will remain indecisive because nobody knows which direction this wave will go and whether there will be somebody to back you up or not.

    Therefore, the reaction would be a little difficult to assess and it can be actually be more severe. But in terms of economic impact, people have now adjusted to live with lockdowns and all the businesses have understood how to run their businesses with or without pandemic. That should not be an issue but the stock market reaction can be a little bit more severe.

    Is it a good strategy to go overweight on pharma as Covid cases are increasing?
    Within pharma, one has to be choosey. Look at stocks which are more inclined towards the domestic market. Secondly, healthcare as a theme will also work in the next year. So hospitals and diagnostics will be the stocks in focus. We are very positive on all three hospitals. We have added Max in our portfolios a few days back even at Rs 400.

    Domestic pharma which have a good distribution and with or without a Covid portfolio will do well because in such kind of scenarios, a lot of preventive care was taken and so companies like Cipla, Sun Pharma can do well.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    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

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    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

    ...more
    The Economic Times

    Stories you might be interested in