Select PSU stocks could also be worth their valuation, given that we think PSUs will outperform at least in the near one to two years, said Sanjiv Bhasin, Executive Vice President, IIFL Securities, in an interview with ETNOW.Edited excerpts:
How should the investor approach this sort of volatility?It is simple. Either you do a SIP or continue a SIP or upgrade your SIPs or have direct exposures through a mutual fund or a PMS. But tracking the markets every day is going to be difficult. If you are a day trader, then this definitely is going to hurt you on both sides. But it is not here to stay. It may be in the realm of two-three things approaching the weekend and we know that there are three important decisions which are coming today. Even I am not in the realm of knowing why this has happened but that is typical of a market. It will always try to dislodge the weaker players through some rumour mongering, etc.
A market like this provides a lot of opportunity for investors. Which are the baskets you are identifying as good opportunities or good bets?
I am recommending the 4 Cs, which are India oriented companies involved in construction, corporate banks, capex and cement. You are trying to buy the market leaders. So, in cement it would be Ultra Tech; in capex it would be L&T; in corporate banks, it would be ICICI and in the construction part it would be again the say an NBFC. On top of that, insurance is a bellwether which is going to be there for the next seven, eight, 10 years as an extremely good wealth creator and select PSU stocks could also be worth their valuation, given that we think PSUs will outperform at least in the near one to two years.
Can you just be a little more specific in the banking and the financial pack? Bajaj Finance and HDFC are hitting all time highs, but others seem to be languishing?
Correct. I think the Bank Nifty offers the best opportunity, it has six PSUs and six private banks and our credit is going to expand. By the way, crude has entered a very weak trajectory and that could only bode well for India with yields hitting almost a two-year low.
I am flummoxed by the Bank Nifty selloff unless there is something which I do not know but if I can be brave enough, I would definitely say buy the Bank Nifty because that is where you will get the best of both the sides; lower yields are going to give more treasury profit for banks PSUs and the cost of money and inflation being low will mean good news for the private lenders.
So corporate banks is where I would put my money, ICICI, Axis and SBI and if I could name three midcap banks it would be Federal, DCB and IDFC First.

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