Still expect banking stocks to do well: Rahul Shah, Motilal Oswal Financial Services

In an interview with ET Now, Rahul Shah, Associate Vice President, Group Leader-Equity Advisory Group, Motilal Oswal Financial Services Ltd, shares his market outlook. Excerpts:

ET Now: What are you advising your clients to do with banks right now because they are on a bit of a tear in the last couple of days?

Rahul Shah: We have been recommending our clients to hold on for all the banking stocks -- private as well as PSU banks. We still expect the banking stocks to do well vis-à-vis other stocks. The steps which the RBI had taken in the last couple of months have been paying off good enough. Look at our import-export numbers which have come last week. So, we still feel that banking should do well, if somebody is holding it in his portfolio.

ET Now: Do you think that Infy has set a precedent for some of the other IT companies? What can we expect from TCS and HCL Tech?

Rahul Shah: The numbers should be fair enough for both the companies. We find that all the three stocks ( Infosys, TCS and HCL Tech) should still perform well this quarter also and they should continue to do well for at least another quarter. So, as a sector it has been very positive and we would recommend to buy the tech stocks at every decline.

ET Now: What is the top trade that you would be advising clients on the large cap side? It could be a short or a long idea for the next few days.

Rahul Shah: We recommend banking and auto stocks. In auto we like M&M going long at current levels and Maruti going long at current levels which can give you at least 10% upside in the next 15 days to a month. This two should be the top picks as of now.

ET Now: From the broader end of the sphere and non-index large caps or midcaps?

Rahul Shah: If somebody wants to really participate in high beta stocks, then real estate as a sector may be considered. A couple of stocks like DLF, which we like, should do well from current levels. So if somebody wants to play on a high beta performance, then DLF should be a good stock to get into for at least 15%-20% upside from the current levels.