Rahul Shah, AVP, Group Leader-Equity Advisory Group, Motilal Oswal Financial Services, tells ET Now says that remains bullish on good quality financial services companies and OMCs.
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Great numbers from Bajaj Auto for June. The total number as well as exports have done very well with over one lakh units clocked for June. Would you say Bajaj Auto is now an obvious buy?
The numbers were quite good. Post Bajaj Autos numbers, we saw some price action in the stock. The valuations are compelling vis-à-vis the rest of the two-wheeler space. With monsoon having picked up, we can expect momentum to build up in auto play.
The valuation looks quite compelling in Bajaj Auto. Definitely, some more money is to be made on this. These are the times when we should look at stocks where the numbers are good, earnings are visible and one should consider picking up those stocks.
What else are you buying apart from Bajaj Auto?
Theres a good quality financial services company that we have been bullish on. We have been recommending Kotak at this level. Bajaj Finance has been our top pick for quite some time also. Risk to reward could in favour of OMCs from current levels. The risk of crude rising higher could be a near-term risk but the price correction made the valuations quite compelling.
Will the tide go in favour IT for some more time given that there does not seem to be any relenting in the currency weakness any time soon?
IT will retain flavour for some more time, at least in terms of price correction. In last two quarters, their numbers have been good and we have seen the price movement in the stocks as well. This quarter also, the IT stocks should hold on. When there is uncertainty in the markets and the rupee-dollar volatility goes higher, we always see that IT stocks getting into the front seat.
IT looks good and I would definitely stick on to the largecap IT companies like Infy and HCL Tech from the current levels, looking at the valuations vis-à-vis other midcap companies.
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ET Markets
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