2 stocks that Sanjiv Bhasin says can double by Diwali

'Everyone was pessimistic till 10,000 but now they are saying the market does not want to fall' n

I have been whole hog saying that PFC, REC at 10% dividend yield were a scream. We still think the stocks can give you a 50% upside.
Be with the firmer names where you can see visibility going forward into the next one-two years, says the Director of IIFL Securities.

Which stocks do you like in IT space?
Our outperformers have been Tech Mahindra and Wipro. We believe that valuations are very comfortable there. They trade at half the valuations of Infosys and Tata Consultancy Services, and inorganic buyouts for Wipro and Tech Mahindra have played out very well. If you want to be in the IT space, then be with these 2 largecaps. Persistent System is another stock which we think is reasonably priced given the outlook they have. But like I said, we want to stay with largecaps and we would rather be with Tech Mahindra and Wipro.

There is a whole host of industry specific moves that we are seeing across the broader markets. Anything from that pocket that you is catching your eye?

Well, I have been whole hog saying that PFC, REC at 10% dividend yield were a scream. We still think the stocks can give you a 50% upside. A lot of the re-rating is on some of the PSUs. PFC and REC have come out with stellar numbers. Both the companies gave a profit of Rs 12,000 crore. They trade at a PE of 2 on a dividend yield of 10. BEL has been a star. Hindustan Aeronautics is now starting to rev up after putting up a disastrous show. NBCC is one more stock that can double in the next year. It has been one of the stocks which have underperformed but that is one stock where I would be putting my money given the execution of a large number of infra projects. The stock trades at an extremely underpriced value of Rs 25. By next Diwali, you should see Rs 50 or Rs 70 on this stock.

From a longer term perspective, would you bet on aviation?
This is the beauty of the market. Everyone was pessimistic till 10,000 but now they are saying the market does not want to fall, and the action has shifted to PVR and IndiGo. So, be cautious there. I am not bullish on those names and would rather be with some of the laggards which are now performing. One such is IDFC First. Their retail banking is doing extremely well. Their CASA ratio is good. The stock has moved from Rs 18 to Rs 31. I am also very bullish on Federal Bank. I think that stock can double from here to next Diwali. I do not want to play the euphoria of the PVRs and the IndiGos even though they gave extremely good trading rallies.

Be with the firmer names where you can see visibility going forward into the next one-two years.
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