Hindustan Lever, Emami look safe for portfolios: Suraj Saraogi

Suraj Saraogi, MD, Keynote Capital, takes stock of what's hot in the small & mid-cap space.

If I was looking at midcaps or small caps, would you prefer midcaps or small caps within power infrastructure like transformer companies guys who do transmission lines or would you prefer small retail kind of companies like a Jyothy or an Archies or something? What in the midcap or let's say 1000 crore category would you really look at the moment?

Suraj Saraogi: I would shift my focus a little bit more and go to more traditional sectors. The textile sector still looks very attractive to me. You have been hearing what is happening in China and with the currency getting revalued, there has been some labour unrest which has been heard about. Textile is one favourite sector which India would benefit from the global markets.

So that sector should definitely be looked at. You have got Bombay Rayon, Gokaldas Exports. These companies would definitely benefit from what is happening in China. So even from the old daddies, you have Century Textiles wherein you have a dual play still from the textile scenario as well as the real estate scenario going on. So even Century Textiles could be added to a portfolio.

Would you advise investors to perhaps keep their money in defensive sector like pharma?

Suraj Saraogi: It is a very defensive sector, so the upside in a defensive stock is also capped. So you would not see too much of a rally happening in this sector, but at the same time if you have a Hindustan Lever or an Emami or something like that in your portfolio, it is very defensive. So I do not think there is too much of upside at these levels.