In an interview to ET-Now, Ashwani Gujral has recommended the following mid-cap stocks for investors with a short to medium term perspective.
Ashwani Gujral emphasized that his philosophy was that money in the markets continues to attract money. Wherever money does not go, money continues to shun those stocks. He cited the example of TCS going from 300 to 2100 and is still going. So once something doubles once, it should come on the investors’ radar, he said.
Importance of stop-loss:
Ashwani Gujral cautioned that investors lose money because sometimes they have no stop loss. It is like driving a vehicle without a brake, he said. In a risk business, things can go down 80%-90% and so some sort of stop loss for risk management has to be in place even for medium-term and long-term investors, he added.
Ashwani Gujral made it clear that he was recommending top-quality stocks that investors were expected to hold for 6 months for optimum gains.
(i) Natco Pharma:
Natco Pharma has been in a consistent uptrend. While the market was sideways, it kept on moving higher. Investors can buy Natco Pharma with a stop of 760 and keep a target of about 1000. Pharma overall seems to be in a nice uptrend. Pharma index is at all time high. So this is a good time to get into the stock.
(ii) Tata Elxsi:
Tata Elxsi has crossed the year 2000 highs and is at all time high. So when that happens, nobody is now a loser in Tata Elxsi. So chances are that supply will generally be low because nobody wants to sell off because everybody is making money, everybody wants to ride it out and it has doubled in the last three months which shows just the kind of momentum. In three months, it has crossed several years’ worth of decline. So there is heavy buying and it may get to four figures finally. The target is about Rs. 550 with a stop around Rs. 375.
Biocon recently crossed its all time high of about Rs. 476. It has been a perpetual underperformer over a period of time in terms of pharma stocks. Now it is beginning to break into new ground which means something is changing in the company. Hence, you could have Biocon outperforming from here. Once something doubles once, chances are that it will double again. So there is a good possibility that Biocon continues to have a good year. The target is Rs. 600 with a stop loss around Rs. 420.
(iv) Bharat Forge:
Global auto markets are recovering. Bharat Forge is one of the finest auto ancillary stocks. Mid-caps have gone through five years of a bear market and are now coming out of them. Fresh trends are beginning. Bharat Forge has been in a nice trend from Rs. 200 and is up 75% from its lower levels. It has much further to go. On declines, investors can buy Bharat Forge with a stop of about 290 and initial two-three-month target of about 450.
IT stocks will continue to do well post consolidation. Mindtree is now entering portfolios. Mutual fund etc. will start taking exposure. It is coming into the big league. So this is the right time to get into this sort of a stock. All of these HCL Techs and TCS etc. they have come from down these ranks. So MindTree is a buy with a stop of 1450, target of 1800 and being the year of the midcaps, small caps like it is being expected, MindTree could do much better things and finally go beyond 2000.