Bata is a very promising stock: Gaurang Shah, Geojit BNP Paribas Financial Services

In an interview with ET Now, Gaurang Shah of Geojit BNP Paribas Financial Services, shares his views on the market and talks about various sectors and stocks. Excerpts:

ET Now: The index is pretty much in a bit of a downturn. 5930 is how the Nifty is positioned right now. It is absolutely flat. We have come off from the day’s highs. Do you see that to be the broad trend of the market where there is adjustment made at the lower end?

Gaurang Shah: In my view, we are likely to trade Nifty spot in 80 to 100-point range for the near term. The higher side being 5980-6000 levels and the lower somewhere close to 5920-5880 levels.

If we are not able to hold on to even 20-30 points gain on the Nifty or maybe about 60-70 points gain on the Sensex after two days of correction, then this kind of weakness definitely tells me that there is supply coming in at higher levels and that supply is a little bit more aggressive.

Broadly speaking, with the developments that we have had on the domestic front, especially with the political scenario, that could create a little bit of uncertainly into the markets. Also, the rupee is staring at Rs 57 to a dollar, which is creating problems as of now. But we remain optimistic, notwithstanding to what happens this week.

ET Now: What is the call on the telecom space?

Gaurang Shah: Well, Idea Cellular is actually trading at very close to our target price. There is no fresh buying, but closer to Rs 135-140 levels one can definitely book profits.

In case of Bharti Airtel, the earlier target was somewhere close to Rs 400 and we will scale it down to Rs 365. So, there is a scope of some up move over here, but that is going to take some time because you have a lot of regulations governing this sector. So, you may need to stay invested for a long time.

As far as Reliance Communications is concerned, you have some positivities coming out every week or a fortnight. One can definitely look at buying close to Rs 505-510 levels. I do not expect a runaway rally and you will see some fatigue in Reliance Communications too somewhere close to Rs 125-130.

ET Now: What is your call on midsized pharma companies? Give me one name that you would probably recommend?

Gaurang Shah: Glenmark is where once Ranbaxy used to be and Ranbaxy is where once Glenmark used to be. Having said that, Cipla is one stock which is preparing for an up move and you will see the stock consolidate. As a disclosure, we do have a positive coverage on it.

A couple of months back, Cipla and Glenmark started the journey upwards together. Of course Glenmark has outsmarted Cipla to a great extent, but all is not lost for Cipla. There will be some positivities as we go forward from here. So from a fundamental point of view, I believe Cipla is now preparing for an up move.