In his latest interview to ET and NDTV, Saurabh Mukherjea was not his usual ebullient self. Instead, he was quite circumspect about the state of the market.
Saurabh has given several reasons why according to him, the market is headed for a difficult time in FY 2015-16. He has also slashed his Sensex target from 36,000 to 34,000.
However, as a true stock picker, Saurabh has homed in on two stocks which he claims will do well despite the adversities in the economy.
(i) PI Industries:
Saurabh recommended PI Industries on the basis that this agro-chemical company has considerable earnings visibility going into a difficult FY16. He explained that as the government pushes back on the minimum support price (MSP) rise on wheat and rice, farmers will start switching towards fruits and vegetables and this will be positive for the stock. He also emphasized that 60 per cent of PI’s earnings come from exports.
(ii) Torrent Pharma: Saurabh recommended Torrent Pharma on the same logic that it has a good earnings momentum. He pointed out that the change in management two-three years ago has yielded results in the context of difficult year. He stated that the FY16 earnings would grow at over 20 per cent.
TVS Motors: Saurabh also spoke of TVS Motors, a stock that he identified three years ago and which is today a 10-bagger. He expressed the view that TVS Motors would continue to do well because it is the only two wheeler company at present targeting the mid-economy and executive segments of the market. He stated that TVS has a couple of launches planned which would sustain interest in the stock. He also opined that if the margins improve from 7% to, say, 11%, there would be considerable gains from the stock.
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