Wednesday, June 23, 2010

Prakash Diwan: Buy Mahindra Satyam for short-term; Reliance for long-term

Prakash Diwan, Head, Institutional Biz, Networth Stock Broking assesses RIL, BHEL and Mahindra Satyam stock on ET Now.

What is the sense on Mahindra Satyam given that it is nudging 100 mark? What are you advising clients to do?

Prakash Diwan : There is a lot of positive news flow that is imminent for this counter and it has been sideways for quite sometime. So their sudden interest is understandable. Out of the names which are doing around the Commonwealth Games seems to be the chunky one. I would recommend that it could be a good short term buy with at least around 20-25% upside form heron also.

What are your views on Reliance?

Prakash Diwan : Reliance has been in quite a lot of news, pre-AGM, post-AGM and the trend is going to continue for some more time because what they are trying to do is lay out the blueprint for a much stronger diversified conglomerate vis-à-vis cyclical oriented oil and gas company and the play in terms of different businesses which is telecom and now you have got power and fertilisers.

These are very long term plays and they would take some time for the impact to happen and I expect Reliance to hold on above its 200 DMA which is about 1049 and it has been doing for the last few days but possibly it would range trade again in that 1000 to 1150 band but I definitely expect some upside moving forward in the next 6 to 12 months on this stock.

How would you trade BHEL? Do you think the latest bit of news is going to do some more wonders for the stock and help it come back to its higher orbit levels?

Prakash Diwan : Not as yet because the order book of course has always been good strength for BHEL but if you look at the typical sales to order book ratio which has been always a bit on the lower side, there are doubts on whether BHEL without strong associations and fundamentals in place can really execute this huge order book over the next couple of years.

So I do not think the order itself in its entirety is going to make such an impact and I would expect it to range trade between the 2250 to 2850 levels. It is quite close to in fact the upper band and I do not expect quick upside or a very immediate upside. So I would avoid this stock at this point in time.