RIL is inflicted with too much of news right now: Prakash Diwan

Prakash Diwan, Head - Institutional Business, Networth Stock Broking discusses RIL, while picking his favourite stocks across sectors in a chat with ET Now.

What about autos?

Prakash Diwan: Base effect is when you have such a sharp run up throughout the last year. You are probably going to see a little bit of easing out of the growth numbers, but certain segments of the auto market will probably see a little bit of weakness. However, the small car segment and especially the value pack small car segment, in which everybody is wanting to have some play, is going to grow much faster and traditionally, companies which have more cars in the portfolios would benefit much more.

The reason being the number of models which you would have to launch to continue generating interest from consumers is going to be much higher. Last year you had an average of 22000-23000 model which was the sales numbers, but today it has come down to 16000. So if you have faster rollout of models, more development investments, then it is going to do well. So Maruti probably is the one which stands out whereas Tata Motors could suffer at that count.

One word on Jubilant FoodWorks, Talwalkars. Do you like these niche players?

Prakash Diwan: I do like. They are creating categories by themselves because they are niche players. There are not many in that particular space and that is why the moment you have one of these coming through the IPO route, at least there is a new category that gets created and I am quite positive these players being market leaders have their own right, will probably continue doing well as the consumption story gains more strength going forward. So if we are going to consume, these are the guys who are going to get their billing counters ringing. So definitely, very positive on them.

Mastek, Tech Mahindra, what are your views on these?

Prakash Diwan: I think Mastek, particularly, though it has run up a bit 15%-16% in the last few sessions, I still feel in terms of reasonable valuation on its order book and its execution they are into a very unique margins which a lot of other IT companies are forgoing because the crisis in the US and the Eurozone makes it very advantageously placed to move into the healthcare vertical, as in, when it opens up for our markets and that's exactly when I would put probably 365-370 as a fair target for Mastek. I would still go long on it.

What about Reliance Industries, though even with all the fundamental developments and news flow the stock seems very range-bound?

Prakash Diwan: Yes, even with some fundamental news. I think it’s too much of news that Reliance is probably inflicted with at this point and unless it possibly starts rolling out some earnings driven executional detail kind of forecast on businesses, I do not think people are going to re-rate it, though it’s distinctly got the makings of a very clearly re-rated stock.