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    Bull run has just started & here's what you should buy: Sanjiv Bhasin

    Synopsis

    I am very bullish on Dr Reddy’s, Sun Pharma and the whole pack of pharma stocks including Cipla, Cadila.

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    This will be the opportunity to buy Tata Steel, SAIL and Hindalco on all declines. Our top pick continues to be JSW Steel which we expect to outperform to Rs 375 by next Diwali, says Director, IIFL Securities.

    Do you still think M&M is a buy even though it is well discovered and a well sought-after name?
    Hero MotoCorp was our top pick from Rs 1,500. We got in at around Rs 1,700. It has doubled and we continue to be bullish on Mahindra & Mahindra and Hero. They are two of our top holdings. We are extremely bullish on the market.

    The proxy of gold at Rs 58,000 means that the real bull run will now start into fixed assets and the largest holders of land bank particularly DLF and Godrej Properties. I think the bull run has just started. I am extremely bullish on stocks like Ashok Leyland, DLF which have been my top picks and I think Ashok Leyland, DLF and Godrej Properties are the stocks which are going to make new highs in the next one two, three years. So yes, Mahindra and Hero Moto are two of our top picks and we continue to be extremely bullish on the rural side where two wheelers and tractors are hogging the limelight.

    Dr Reddy’s has got a tie-up for the Russian vaccine, Do you think one should not get excited and buy Dr Reddy’s only on that news?
    Pharma for four years was the biggest underperformer. The last six months have been the dreamiest run you have seen in pharma stocks and look at Dr Reddy’s, it is leading from the front. It has got all its verticals correct; Russia, the CIS countries, the growth in volumes both locally, globally and the pharma pack is looking extremely good.

    If you have to pay a premium you always will buy the best and you will buy it because there is no question of chasing Dr Reddy’s in a big bull market and the fundamentals are supporting it at the best levels, margins are rising, volumes are doing well, input costs are good. Plus this is a Covid-related vaccine which is the thread for this month and maybe the next year. I am very bullish on Dr Reddy’s, Sun Pharma and the whole pack of pharma stocks including Cipla, Cadila.

    "If you did get allotment of Happiest Minds IPO, then you are sitting on a gold mine."

    — Sanjiv Bhasin


    I have been suggesting for the last four months that please do a SIP in one of the good pharma funds from State Bank of India or Nippon because that way you will capture a lot of the stocks, rather than be independent on one. As for Dr Reddy’s, they need more colour on the approvals but why not pay a premium to a premium company? If you want to be into good stocks at these levels, then Dr Reddy’s and TCS fit the bill perfectly.

    There is a lot of talk on some of the auto, pharma names. Financials have been lagging and even metals are on the sideline. Do you think the rally is pretty much done for the moment?
    Correct. I think a large part of the rally is played out. Rs 200 for Hindalco, Rs 430 for Tata Steel have proved to be stumbling blocks and rightly so. Consolidation is likely, but just coming to some of the valuation discount which is there. We are of the view that the US dollar is in a weak trend for time to come and metals are a best proxy. Also I am very bullish on crude. By October you, crude should head towards $50 which means that the energy basket and some of the energy names will do very well. That includes Reliance and a dark horse called ONGC. At Rs 72-73, ONGC fits the bill. So yes commodities are seeing some consolidation but they are raring to go. This will be the opportunity to buy Tata Steel, SAIL and Hindalco on all declines. Our top pick continues to be JSW Steel which we think can outperform to Rs 375 by next Diwali.

    If you are bullish on crude, is it time to get bearish on IT as it will mean rupee is going to get stronger?
    Well no and yes because of digital technology and the platform and the numbers are justified. Work from home has worked well for IT companies and helped in cost savings. There has been a huge runup because of under ownership. But there is time for a pause in IT. I am very bullish on financials. They have adopted technology or the digital platform very well. What about SBI itself? Yono itself is one of the largest digital platforms.

    So sum of parts, if you saw the subsidiaries of State Bank, SBI’s price works out to just Rs 30. There is a lot of value in a lot of stocks. So like I just mentioned, ONGC has been a dog of a performer but if you are looking for some value at these 11,500, 12,000 levels which may come very, very fast, then SBI, ONGC and the energy basket fits the bill perfectly.

    Have you been a subscriber to the Happiest Minds IPO? Should those who missed the IPO, go ahead and buy the opening pop?
    I applied in three names and I got zero so that is to start off with. But it tells you people are talking of the market running ahead. It tells you how much cash is there and people are waiting to get in. If an IPO gets subscribed 150 times, it tells you good quality paper will be bought at any cost and any correction is a buying opportunity. I will be applying in the CAMS issue. I have applied in the Route Mobile issue. But I think it is a fair bit of luck. The listings will see huge gains. Yesterday Warren Buffett became richer by one billion dollar on the listing of the stock which doubled in one day. It tells you that you are in a bull market. Take all this with a pinch of salt that people will be waiting to buy dips. Do not question the veracity or time the market as that will be difficult. But if you want to make money, you will have to look for bottoms to buy. I would not subscribe to buying Happiest Minds at these prices. I would wait for price performance. But yes, it was a missed opportunity. If you did get allotment, then you are sitting on a gold mine.
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    5 Comments on this Story

    Jayachandran Maruthia37 days ago
    Dear Harshad,
    You are absolutely correct. Had he given the these views in the last week of Mar 20, I would have appreciated.
    Harshad Biniwale38 days ago
    It is Y that during the bull run only on the list given biy cals at higher levels why can’t they spot goods shares when the pessimism is that high why can’t they give this pics and spot the shares when they are at their lowest price during the bear phase Of the market.What I have noticed days during the bull phase they become over optimistic and during the bear phase they become over pessimistic.
    Amar Khurana39 days ago
    Nomenclature should be HNI issue in place of public issue. The controllers are requested accordingly
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