Current mayhem provides buying opportunity

One of the fundamental principles of investing or wealth maximisation is to buy stocks at the right price which is difficult to achieve in a market that has been moving up since the last four years.

The current mayhem in the domestic stock market provides an opportunity to buy quality stocks at cheaper valuations. After the bloodbath in the last few days, which saw bouts of selling across the board, many experts believe that this is the right time to identify and pick good stocks, as valuations are fairly attractive relative to fundamentals.

Most investment experts believe that fundamentally nothing has changed and that India remains a long-term growth story with GDP expected to grow in excess of 8 per cent over the next few years.

The domestic consumption-led demand augurs well for the economy as it largely insulates it from the potential slowdown in global growth and this should continue to reflect in the markets.

We spoke to experts to know whether it is the right time to invest and what, according to them, are the value picks. "We believe that one should play big in banking & financial services and capital goods & engineering services sectors as they have now come to very reasonable levels and provide compelling investment opportunities. If you look at such 6 sigma events in the past due to technical factors, the market has provided great investment opportunities. This is the right time to invest and one can expect 30-40 per cent returns, may be more, in next three to six months," said Vikas Khemani, co-head of institutional equities, Edelweiss Capital.

Most of market pundits prefer stocks in sectors like capital goods, power and power equipment, infrastructure, financial services and telecom.

These sectors provide long-term visibility and sustainable earnings growth. With regards to individual stocks, the experts recommend the following 'value' picks.
 

VALUE PICKS
Harendra Kumar	Ajay Parmar	Amar Ambani	Vikas Khemani
Head of Research	Head of Research	Head of Research	Co-Head of Institutional Equities
ICICI Direct	Emkay Shares	India Infoline	Edelweiss Capital
Reliance Industries	DLF	Jaiprakash Associates	Larsen & Toubro
Reliance Communications	HDIL	BHEL	BHEL
Tata Motors	Jaiprakash Associates	ITC	Punjab National Bank
NTPC	Tata Steel	GMR Infrastructure	Power Grid Corporation
Power Grid Corporation	BHEL	Patel Engineering	Reliance Communications
JSW Steel	Aban Offshore		ICICI Bank
HDIL	Lanco Infratech		Voltas
Oriental Bank of Commerce			ITC
Indian Overseas Bank