Bullish on telecom: Girish Pai, Centrum Broking

Girish Pai, Head Of Research, Centrum Broking, in a chat with ET now talks about his stock and sectorol ideas.

In terms of specific names, where are you a contra buyer and where are you a contra seller?

I would be contra buyer in telecom as things stand right now. The results have been pretty good from both Idea as well as Bharti if you take-off of one of the items connected with the brand spending that Bharti has done. The fall in RPM has been very muted in this particular quarter. In fact that has been the theory that we have been expounding on the telecom sector for last many months - being positive on the sector vis-à-vis lot of market players.

So the contra buy now from a short, medium and long term perspective to me appears telecom.

Right one should be careful with interest rate sensitive sectors and especially sector like auto. With the IIP numbers that are coming on which are turning out to be fairly weak, I would be a bit cautious on the large CV players in the market be it Ashok Leyland or even Tata Motors and to some extent even on the 2 wheeler space where the competition is probably going to heightened up once you have Honda being allowed to introduce more products. I would probably see some heightened margin pressures coming through because I do not think the increase in thoughts are going to be passed onto customers in terms of higher pricing because the competitive intensity is going to go up there.

So auto is a space where I would be slightly more cautious on whereas telecom is a space where I would be more bullish on.