Contrarian gains: Susanta Mazumdar

THE RUNAWAY JURY

Director, UBS Securities India

2004 was great. After the change in government in May, we were one of few houses to have a Sensex target of 6300. Besides strong corporate fundamentals, our view was based on a UBS call on global liquidity and dollar weakness. Essentially, our contrarian calls worked well.

We continued to be bullish on Bharti when the market generally turned bearish on the counter in August post the aggressive tariff cuts by Reliance. The stock is up over 50 per cent since then. Other contrarian views which worked well for us are downstream oil companies like IOC and BPCL. Another satisfactory call was NTPC.

One major miss was VSNL. Even as I have been tracking the company very closely I did not anticipate such a strong upsurge in the stock.

I expect the capex cycle to continue in 2005. Capital equipment companies and banks will, thus, benefit. Also, downstream oil and consumer companies will gain from lower oil prices.

Bric by bric: Prabhat Awasthi

Since the research house is fairly new, all our calls have not yet played out. So far, the best ones have been Bharti Tele-Ventures (at Rs 133), Tata Steel (at Rs 296) and M&M (at Rs 465). Some companies we have recommended with a 12-month price target are Trent (at Rs 350, target Rs 570) and Indian Rayon (at Rs 270, target Rs 470).

The highlight of this year was the surprise factor -- both on policy action by the government and industrial performance, which turned out better than expectations.

We expect domestic cyclicals (automobiles, cement, etc) and banking to perform well in 2005. The mid-cap story will be a stock picking one. However, 2005 may not be as good as the year that was.

One significant learning this year was that buying into extreme pessimism does pay-off. Also, that the economy's resilience is beyond political changes.

Striking the right chord: Nandan Chakraborty

Our best calls this year were in banking, metals and pure refinery stocks. We were the only major broking house to predict a correction (on December 2003, when the index was near 6,000 ) after the run-up in 2003. We were also the first ones to call a buy on the markets, when the markets were still reeling from the effects of Black Monday.

One blush was, of course, technology. We were bearish but tech stocks have done well this year. We do not track small-caps.

My bet for 2005 is that the index should be in the range of 7,000-8000. Valuations are relatively cheap currently. The Sensex P/E is between 10-13x (FY05), which is well below its historic highs. Going forward, it is likely to trade at a 13-17x range, which will still be below its highest levels. I feel the markets have a long way to go from the current levels.

A dark horse could be FMCG.

My market strongest!: K Ramachandran

The best part about 2004 is that the political uncertainty could not prevent the strength in the markets from manifesting itself.

We had the foresight to ramp up our exposure in IT just before the elections as these are insulated against political upheavals. We also reduced our weightage in PSUs and that paid off. We also took up a heavy exposure in cement stocks in the last 2-3 months, which again reaped rich dividends.

We had to wait a great deal for some sectors like engineering and MNC pharma to start performing. Shipping was another sector which did not play out well for us. We also got out of the banking sector a little earlier than what was good for us and deployed a part of the sum in cash, which on hindsight, we regret.

Never lose faith in your convictions is a lesson that was apt for 2004.

The 3C approach: Amitabh Chakraborty

Targets have been breached in most of the stocks we recommended in 2004. Some of our best picks were Chennai Petro (at Rs 134), Gujarat Mineral Development Corporation (at Rs 205), Dynamatic Tech (at Rs 169) and State Bank of India (at Rs 438).

The not-so-good ones were Mangalam Cement (at Rs 46 with a target of Rs 75) and EID Parry (at Rs 327 with a target of Rs 441).

Last year, it was very difficult not to pick good bets. Although, the stocks I mentioned did not perform according to our expectations, our price targets are for a 12-month time frame.

Our theme for 2005 is 3C - capex, consumers and commodities. Thus, we are bullish about capital goods (L&T, ABB and Siemens), FMCGs (HLL, ITC and Goodlass Nerolac), automobiles (M&M) and metals (Tata Steel and Hindustan Zinc).