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    Don’t see a case for a significant market correction from current price point: Hemang Jani

    Synopsis

    “I do not see a case for a significant correction from the current price point. The risk to the earning is not very high at this point of time and even if one gets an earning growth of 12-14% for next year, the market would be quite happy to go with that kind of a number.”

    Hemang Jani-NEW1-1200ETMarkets.com
    “Whoever invests at this point of time over the period of next one or two months, would generate a decent positive return,” says Hemang Jani, Equity Strategist & Senior Group VP, MOFSL

    The first half of the year is done. As we enter the second half, what are you telling your clients – negative returns, negligible returns?
    Having seen a fair bit of correction in the first three or four months of the current financial year, our take is that though in terms of earnings, there can be bit of a disappointment and the larger picture would get clearer only post majority of the companies announce numbers. A large part of that is already in the price as we see it and as we get more clarity on the crude oil price and some of the other commodities, people will get far more comfort. So we are quite constructive and positive on the market from the current point. Whoever invests at this point of time over a period of next one or two months, would generate a decent positive return.

    Which is the one factor you would think will resurrect the markets?
    I feel the markets have already corrected and whatever news, events we are discussing on a regular basis for the past three to four months are pretty much known and the price adjustment to that has to a large extent happened.

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    So maybe depending upon how things shape up over the next few weeks, we will react to it. But I do not see a case for a significant correction from the current price point. The risk to the earning is not very high at this point of time and even if one gets earning growth of 12-14% for next year, the market would be quite happy to go with that kind of a number in the current environment. I am turning a bit more positive in terms of risk reward at this price point.

    Three stocks where you think 50% gain is coming in the next three years.
    In January or February, people would have happily shared many more names with higher upsides but given the way things have panned out, a 50% upside could be tough. But given the earning visibility, real estate is one sector where we are extremely positive and think that despite the increase in the interest rates and some of the raw material costs, this is one sector which will surprise on the positive side over the next one or two years. So both Oberoi and Lodha are something we prefer at this point of time. These are high beta names and can give a much bigger upside. I do not know about 50%, but a 30-40% upside is very much possible in these two names.

    Is there a trade in Reliance ahead of the AGM? After Tuesday’s announcement, the importance of AGM is going to be very high. What role Isha Ambani would play? Will there be a role for Mrs Ambani? What role will Mukesh Ambani play? Do you think Reliance becomes more a buy on rumours and sell on news stock in the runup to the AGM?
    Hemang Jani: So two things here. Given the recent development where Akash Ambani was inducted on the board of RIL Jio, people would think of some hints or some indications as to how Mr Mukesh Ambani is looking to have a succession plan in place for different businesses and market would start building in some sort of expectation.

    I do not wish to take a view on the stock purely on the basis of this. So far, we were talking more about the other two businesses which are Reliance Jio and Retail but the way things have turned up in the last two or three months, there is a case for a significant upgrade in the refining space. As you see these quarterly numbers, people would get more excited and we will see a good amount of upgrades on the back of that. In the current environment, where crude prices are high, Reliance would definitely be top of the mind in terms of playing the crude-related theme.

    Is there any merit in looking at these quasi textile and realty plays like Bombay Dyeing, Raymond, as well as the likes of Phoenix Mills? The footfalls in malls are really at a high. Is there merit in looking at these stocks for a long term benefit as well?
    Both Century and Raymond have good land parcels and most of the development work has been carried out for monetisation and there would definitely be a good amount of embedded value built into it. We might be able to see A good amount of upside. We have not really done more detailed work on these two names and so are not able to give any specific recommendations but given the way the traction is building up on the real estate side, these two names surely would be an interesting one to look at.

    About Phoenix Mills I have my doubts because the overall occupancy levels have gone up and the traction is building in but I do not know how much of the upside surprise one can really get from the consensus that the market is already working with. We do like that company for its presence and the overall positioning, but not too clear on the surprise element in terms of growth for the current financial year.

    (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)




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    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

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