No pathbreaking ideas in terms of resource mobilisation: Hemang Jani, Sharekhan

In a chat with ET Now, Hemang Jani, Senior VP, Sharekhan, says there is no case for a sustainable rally in the market


ET Now: What is your understanding of the fine print? Anything special in terms of an individual company or stock which got your attention?

Hemang Jani: I think first of all that hike in the STT on options, if you look at it, it has been increased…

ET Now: That is a broker complaining.

Hemang Jani: Yes, that is a broker complaining.

ET Now: But I want to hear from Hemang the investor. His understanding of the fine print.

Hemang Jani: My only understanding is that there are two soft targets for the finance minister -- the salaried class and the corporate sector. So the entire resource mobilisation is focussing around these two pockets. We are not able to see any path breaking or new ideas in terms of resource mobilisation so that is putting additional burden on these two pockets. That is something that I am not really happy with.

ET Now: What we saw yesterday was more like immediate event relief. We saw a bout of short covering courtesy short covering in the F&O market. Do you think that event adjustment is behind us?

Hemang Jani: Yes absolutely. The performance of the market ahead of the budget was that we are going to see some negative developments and there was definitely a sense of relief because this budget looks more realistic. Yes there are no path breaking reforms and on the spectrum and divestment front, the targets look a little daunting but overall the sense that the market is getting is that it is a realistic budget. We are working with a reasonable assumption. The fiscal situation is okay. The net borrowing figure is also quite realistic which is reflected in the way bond yields have paved out. So overall, we are getting is that you will see a bit of relief rally but since we are going to be focussing more on the earnings and the global picture where there is not much of clarity, there is no case for a sustainable rally in the market.

ET Now: What is your view on Maruti?

Hemang Jani: If you were to look at the growth going ahead, people are looking at 12 per cent volume growth for Maruti. So all the negatives that we are talking about, the yen part, fact that the monthly numbers were not so good, somewhere down the line, urban consumption courtesy the Seventh Pay Commission payments is going to pan out extremely well for a company like Maruti. So I am not too disappointed. The stock has corrected almost about 20-25 per cent, So from valuations perspective, from risk reward perspective, at this point of time it is looking quite compelling.