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    Buy RIL if stock falls on execution fears: Anand Tandon

    Synopsis

    ‘If you have the patience, you will get a price that is a little better than current levels’

    Anand Tandon
    I think the market is a little toppy in terms of most companies and Reliance is one of them.
    Shipyard stocks have been doing reasonably well given that they have a couple of submarine orders, says the Market Analyst.

    Where do you stand when it comes to PSUs like BHEL, BEL. There is no doubt we have seen a decent amount of recovery in a lot of these names but are you convinced by the kind of action that we have seen off late in price and volume?
    Most of the defence PSUs will obviously have some benefit; especially HAL, BDL and maybe BEL. The shipyards have already been doing reasonably well given that they have a couple of submarines order. So Garden Reach or a Cochin Shipyard are already doing reasonably well. Most of these companies had a question mark about their order book and about how much of that money would come through in time. But given the situation we have right now, to some extent you can be sure that at least money will not be a constraint in the near term. So broadly, they should be doing a little better.

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    But unfortunately, they have been rather unpredictable in terms of their earnings as well as in terms of their execution. So when they do have orders, they are not able to deliver on time and when they are delivering, they do not necessarily get the payments on time. That is a problem that will continue to remain. But given the valuation they are currently trading at, I do not see there is much downside from here. So if the market continues to move up, certainly these are one of the most cheaper stocks. The interesting one among them for example is BHEL, which is not so much related to defence. But they came up and offered their plants and manufacturing facilities to partners who would want to build things in India. It was a very interesting move. I do not know how far it will actually be able to execute it. But in case they are able to get a few partnerships in India, I think that would be a new model for PSUs to improve the performance going forward.

    Do you really think dip will come in Reliance anytime soon for new investors to get in or have they missed the bus
    I think the market is a little toppy in terms of most companies and Reliance is one of them. There is no doubt they have had a tremendous run in terms of capital raising and that has been an exceptional execution. For a company to raise the kind of money they have considering the time we are going through speaks volumes of the capacity of the management. But if you look at the numbers, at least for now, it looks like they have had a very very healthy run and the upside from here may not be in the near term; unless the market of course continues to rally upwards very strongly.

    That is not to say you will not see higher levels from here. I am just saying with a run like this, it is very likely that at some stage if you have the patience, you will get a price, which is a little better than what you are looking at currently to enter because right now of course given the kind of momentum or money coming in, it is very likely that they will have to maintain the prices at this or higher levels. But going forward, once execution fear again starts, I am sure there will be periods of time when you will find that the market is less excited and the stock prices are lower.




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    (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
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