Markets stabilising after sharp upmove: Taher Badshah, Motilal Oswal AMC

In an interview with ET Now, Taher Badshah, Senior Vice President & Co-Head Equities, Motilal Oswal Asset Management Co Ltd, talks about the market and shares his views on a host of stocks and sectors. Excerpts:

ET Now: What is your view on the market? Do you think the macro economic worries will remain a key drag?

Taher Badshah: The currency has been the key problem. However, the currency moves are also linked largely to international issues and especially the dollar strength in the recent past. There have also been a lot of issues regarding the QE and uncertainties surrounding it.

However, the correction or volatility overseas has been probably sharper in the bond markets than the equity markets, as far as emerging markets are concerned. We are seeing a bit of a moderation in the markets. It is probably also to do with the overall result season. The past result season perhaps was a little shorter of expectations. Therefore, the market has been responding to that in the recent few weeks and is stabilising after a very sharp upmove that we have seen in the past couple of months.

ET Now: What did you make out of the statements from Mukesh Ambani at the Reliance AGM? Does it instill any confidence amongst investors for what Reliance’s next growth path or phase will be?

Taher Badshah: From whatever has come out of the AGM comments, it appears that RIL has linked the roadmap now. They have revised the roadmap now for the next 3-4 years post the pretty unexciting performance of the last 3-4 years, led by the gas issues.

They are looking to revive that business, but it is still some time away. We have to be contend with FY14 being significantly lower versus FY13 in terms of gas output. The gas building blocks are being put into place once again and we will have to wait for the gas price hike which is expected. It might come during the course of this year and that should lead to slightly better fortunes for Reliance in FY15.

ET Now: Reliance will be very aggressive on the pricing front when it comes to their telecom business. Would that change your call on telecom stocks?

Taher Badshah: Yes, something which one needs to be sensitive about as far as the sector goes, but it is again something that we need to wait for. We do not really know about pricing and technology, we don’t know what level of acceptance it will have. So these are still early days, but yes we have to see because it is a completely new technology on 4G platform. Maybe they will probably have a better competitive advantage on the data side of the business.

We will have to see how voice plays out which is where a large part of the existing industry is currently focussed and concentrated on, but yes it is something which one needs to keep a tab on. From hereon we need much more data to be able to make some conclusion.