Buy SAIL on decline: Ashwani Gujral

P Phani Sekhar, Fund Manager-PMS, Angel Broking, in a chat with ET Now, gives his views on commodity space


What are your thoughts on the commodity space and given the volatility that we have seen with the stocks what would be the best way to approach them from an investment angle?

Stay away from them for the time being because it is very difficult to map that volatility, however, if you have a medium to longer term outlook then it is a good idea actually to start looking at stocks like SAIL or Hindalco or even a Tata Steel on every decline. Whenever there are these panic days on the market because if you actually look at the anatomy of the fall of most of these commodity stocks it has two aspects one is of course what is happening in the global landscape and of course if you actually look back may be six months back when these falls actually started it was triggered by a delay in the domestic expansion plan of most of these companies.

Now we understand that most of these plans are more or less shaping up as per the revise schedules and in the next 6 months to 18 months you will actually see a lot of commissioning of the new plans that will happen. Once the market sentiment stabilises you will actually see market factoring in renewed volume growth coming out of the domestic expansions and that should provide some respite that is assuming the global situation does not improve to these commodity stock valuations. So from a medium to longer term perspective you should keep accumulating them on declines but if you are looking anywhere between three months to six months as an investors and do not want to take trading losses you should clearly stay away from them.