Prices of all the metals to move up: Paras Adenwala

Paras Adenwala, MD & Principal Portfolio Manager, Capital Portfolio Advisors

Any cyclical stocks that you like at this point? In the aluminium space Nalco, Hindalco are pretty and Nalco especially is way off the highs it was in the month of December. If we look at Hindalco, it is just about back at those levels. So it has been a 3-4 month period where these stocks really have not gone anywhere. You do not see price action now petering out in these stocks, you still think that there is considerable upside left for cyclicals, particularly in the metals space?

At least for now looks like the stocks are consolidating, someone like Hindalco where there could be earning surprises largely because of some kind of improvement happening in Novelis. As far as Nalco is concerned, they do have capacity constraints and therefore I am not surprised by the kind of behaviour that Nalco stock has displayed. Even on the steel side, we have seen a mix movement in the stocks but having said that I certainly expect prices of all the metals moving up, not because of liquidity only but also because of improvement in demand scenario over the next one year and also because of cost push as I mentioned iron ore, coking coal, crude prices, all of them are expected to move up and if that happens, the derivatives of all these basic metals in terms of manufactured metals, they will also move up and therefore, there will be some kind of earnings surprise happening in all these stocks. So I would not be too concerned on the short term performance. I would stay long on commodities at least for the next 12 to 15 months.