Microsec:India Strategy June 2013 microsec.in/Static/Pdf/India%20Strategy%20June%202013.pdf Indian market may remain lackluster in June-13 due to lack of direction from economic or corporate front. Whereas Monthly auto sales are expected to decline, IIP and Inflation data may be key to give direction of interest rates in RBI Policy to be announced on June17th. Monsoon is expected to arrive on time and this may result in positive mood of RBI and policy makers. Sharp decline in INR/USD in May 13 by 5% and weak outlook going forward may un-nerve markets, with Banking sector likely to underperform during the month. However, IT, led by TCS, Infosys may balance decline in markets to some extent. Sluggish investment cycle, subdued consumption pattern, lack of earning growth, daunting CAD indicates that markets being capped on the upside around 6200. With policy reforms dried up since second part of budget session is adding fuel to fire and increasing more volatility in markets. Quarterly results(Q4FY13) was subdued on margin pressure, cost overruns, higher interest cost, foreign exchanges losses seen evident in company’s performance. Auto sector reflects the pain in the economy through monthly sales numbers. Investor should have cautious approach and accumulate stocks with strong fundamentals in a staggered manner. Nifty EPS(E) for FY14 is currently is 433, Bloomberg consensus. On that basis we believe Nifty is likely to trade 13.3-14xFY14(E) earnings which makes a range of 5800-6100 for June. Petronet LNG, Cummins India, LIC Housing, Bajaj Auto, Dabur, RIL, Tata Global, M&M, Pidilite, Swaraj Engine, MRF, Dredging Corp remains a BUY.
Posted on: Mon, 10 Jun 2013 11:53:17 +0000
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