Mehraboon J Irani, MD and CEO at Gini Gems Consultants is expecting the markets to correct a little bit further.
“In a market, which has gone up in a hurry, a correction of 5-10 percent will just be a correction while quite a few traders will call it a sharp move. I would say that correction is a great opportunity because this would be an intermediate bottom and we will see new highs coming,” he pointed out.
Irani believes the pharmaceutical sector will relatively outperform in a market where a correction is expected to come.
“I would be buying pharmaceutical stocks. You can expect a 20-25 percent upside in quite a few frontline pharmaceutical stocks. So, I would go with pharma just because I would like to be a little bit defensive in the short-term,” he shared.
“I would go with specialty chemicals even now. Though at the moment valuation wise, some of them may be looking expensive, quite a few companies are doing great as far as business goes,” he further mentioned.
Jubilant Foodworks can see another 20 percent upside from current levels over the next two-three quarters and it would be no surprise to see a price of over Rs 3,000-3,200 on the stock, he said.
“The company is constantly reinventing itself. It is doing good work. The stock looks expensive. I personally believe it will remain expensive,” he opined.
According to him, India and most of the other countries cannot afford another lockdown.
“The numbers are far lower than what they were in the peak of the COVID-19. So, I think COVID-19 is a story, which is there today and it was there yesterday and over the next few days, not many of us will discuss it," he added.
"Further, I don’t think the earnings are going to possibly be reflected properly. I think the valuations are far too expensive for me to go ahead and buy into a market where I see overall 3-5 percent correction coming,” he stated further.
Irani expects global steel prices to stay firm at least for the next one quarter led by post-production cuts in China.
When asked about steel stocks, he replied, “Stocks like Tata Steel, Jindal Steel and Power Ltd (JSPL) will see much higher prices than what we have seen in the recent past.”
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