Remain cautious on power stocks for short term: Arvind Sanger

In a chat with ET Now, Arvind Sanger, Managing Partner, Geoshpere Capital Management shares his views on power stocks.

ET Now: What do you do with the cap good names, there are PSUs like BHEL which have risen the last one month and some of the private ones are also coming out of the slumber that they were in?

Arvind Sanger: It is an interesting area because on one hand power is an area that has so many problems and there seems to be some move towards getting some UMPPs moving forward. So, there could be some orders coming. I remain sceptical that with the number of players who have entered into those super critical power equipment market whether there is enough opportunity in the short term for anybody to get orders because everybody is just going to try to keep their plans running and therefore they want the competition will prevent much profit growth. I prefer frankly companies like L&T which benefit no matter what happens from build out and may be some other midcap names that might be beneficiaries but somebody like BHEL that is so order flow dependent and has to bid against a number of new entrants and try to make money in their environment. I frankly remain sceptical that there is clearly a part of the goal at the end of the rainbow anytime soon may be two-three years they might get profitable enough orders that they make a lot of money but over the next one or two years it could be a struggle.