Wagon makers, ancillary stocks to go up nearer to Railway Budget: Ajay Bagga

In a chat with ET Now, Ajay Bagga, Market Expert, shares his views on defence stocks. Excerpts:

ET Now: It seems like it is a bit of defence day today. There is BEML which is active. Pipavav Dockyard is active. I have seen a Rolta which is moving around in the session today on the buzz of a defence order coming their way. Some of the other large companies which have defence arms too have done rather okay for themselves. Closer to the Budget, is this a theme that could be active as well?

Ajay Bagga: We have seen this play out couple of times already since this government came in. It is for both, FDI in railways as well as the defence. I would be a little circumspect on the fundamental side even if orders come in, it is going to take a long time. Same with the railways side, nearer to the railway budget, again you will see the wagon makers and the other ancillary stocks going up.

We have seen that play out two to three times and then they come back again with some disappointing news. So, I would be little cautious. These are still very early days and these stocks are not cheap valuations wise.