Stock ideas: Jagdish Malkani’s top picks in volatile times

In an interview to CNBC-TV18 Jagdish Malkani, member, NSE & BSE said, it is a black Friday for the Indian stock market. ”I hadn’t thought this dark day will come. But it is a black Friday, poor IIP numbers and dismal rupee . India has cup overflowing,” he said.

Malkani is bullish on stocks like Cairn , Tata Motors , Bajaj , Hero , SBI and Bank of Baroda .

Below is the edited transcript of Malkani’s interview with CNBC-TV18. Also watch the accompanying video.

Q: It seems like the sentiment is completely negative for us today. 4900 – Do you think that will hold?

A: Who can say? I hadn’t thought this dark day will come. But it is a black Friday, poor IIP numbers and dismal rupee. India has cup overflowing.

Q: Everybody knows that the IIP number is a bit of a wild one. People in the bond market, when we asked them will you react to the IIP numbers, they said it’s a monkey, it can jump either way. We know that these numbers are a little wild and the January-March average like we were speaking with the economist comes to 0.8%. Now surely corporate sector growth doesn’t indicate that growth in this quarter over the year ago quarter has been just 0.8%, not even 1%. Need the market reaction be so sharp at all?

A: I completely agree with you. Inspite of RBI’s moves yesterday; the rupee still is going for a toss. But I think this fall is overdone. Stock markets are in their own orbit and global news flow is also not great. So who is to say now, the technicians and the algowalas running wild.

Q: You are not buying even at these levels is what you are saying? You wouldn’t advice buying?

A: I am nibbling. There are some great values, but I would stick with top drawer stuff and in a regulated manner.

Q: What is top drawer stuff for you at this point?

A: Top stuff at the top of my head is stock like Cairn. The oil stories not going away, this country needs big time. I played Tata Motors story through the DVR, and in the two wheelers space there are stopcks like Bajaj and Hero. Many of them have become very tempting. Even some of the PSU banks have been bludgeoned out of shape like SBI, Bank of Baroda, etc.

Q: What about the broader markets because we have seen a lot of stock specific reaction to earnings such as Sintex, GVK Power? Would you just completely stay away from that or would any of those be contra bets for you?

A: They are frank only for the really risk prone. When you are getting absolute pedigree stocks at very attractive levels, why should one go out? These are times when you don’t understand what’s going on properly in the company, you are better off going, keep it simple stupid.