Avoid fresh buying in metal stocks: ICICI Direct

In a chat with ET Now, Pankaj Pandey, Head Of Research, ICICI Direct, shares his views on the outlook of metal counters.

What would you do with metal counters?

The entire metal index delivered about 13% return last month. Since it's a high beta sector, we would watch out for volume growth because we expect on the margin side companies would be comfortable because of the raw material prices coming down since quarterly pricing mechanism are coming in. Valuation wise, all of them were trading at quite rich valuations and I would not advise fresh exposure to any of the counters. We would like some of the midcap counters like Usha Martin and Visa Steel because of the valuation divergence between the large cap ones and the midcap ones.