Bullish on Engineers India: Avinash Gorakshekar, Edelweiss Financial Advisors

Avinash Gorakshekar, VP Research, Edelweiss Financial Advisors, in an interview with ET Now, gives his stock recommendation



What is your call right now on the market as a whole and how one should be going about selecting stocks right now?

I think, rather than the market one should look at stocks where there is good amount of earnings visibility. One should avoid the interest rate sensitives. I think autos, real estate typically infrastructure are spots where we feel that in the coming quarters we could see significant amount of margin pressure coming in from the Q1 of this financial year.

Stocks which would offer comfort would probably come from sectors like IT, pharma typically from the agro or may be from the fertilizer space where there is good amount of upside left and where probably a indication of a good monsoon could possibly trigger a kind of a good buying interest. More importantly, investors should make their way into getting into reasonably larger companies even from the midcap basket because very tiny companies could find margin pressures going forward to be quite significant.

My sense is stick to the defensives and where possibly the story is secular and where companies have decent cash on the balance sheet practically zero debt something like a Hindustan Zinc or typically like Engineers India in the current market where we feel is good amount of value because both these companies are zero debt extremely cash rich.

The commodity cycle for zinc is also pretty strong and Engineers India is a very strong market leader in the hydrocarbon space. Our sense is that this has been very good on dividend payments also. So probably just have to have patience in getting into the stocks because these stocks are typically slightly illiquid but if you really look at the value upside in these stocks I think there is a clear strong kind of upside present provided the investor is willing to wait for sometime bet his money on the stocks.