New Delhi: The markets were roaring since opening on Friday morning, but turned choppy in afternoon trade. Experts give their views on stocks that witnessed a run-away rally on Friday.
The biggest gainers in this morning's rally were the tech majors Infosys, TCS and Wipro, alongwith Zee Tele and Cipla.
Infosys was up nearly 6% in opening trade today on the back of a bonus issue that the company is considering, as well as its forthcoming Q4 results.
Vibhav Kapoor of IL&FS Investsmart: Infosys will move up reasonably from today
This is the 25th year for Infosys and therefore there is a bonus announcement. The market was expecting a big dividend or a bonus issue or a split. It is pretty encouraging, and will probably put to rest fears of the market regarding poor guidance and results being below expectations.
Coming out with a bonus generally means that a company's performance is good and prospects are good. I think the stock will move up reasonably from today. Also, Infosys has been a sort of an under performer over the past 3- 4 months. The market is really going to welcome this bonus announcement as a precursor to better performance and better guidance ahead.
While, a bonus issue is the reason for Infosys' rally today, Zee Telefilms was also up 6% as the company has clinched the overseas cricket rights for Rs 985 crore. This is around USD219 million for 25 matches, which means USD8.77 million per match. The matches will include high profile teams like Pakistan, Australia and England.
Kapoor: Zee is a good long-term story; wait for a 10% correction now before buying it
Cricket rights is a positive development but one needs to value the amount of money they are paying for it. But I still think it looks good. As far as the current price is concerned the stock has run up a lot and in the near term, it looks expensive. However, things are beginning to work out for them in terms of the restructuring that they did, plus the cash that will come.
DTH will also follow, along with their advertising rates being hiked since their programmes are getting a better rating now. All in all it is a good long-term story, although I would wait for a 10% correction to take place from here on before recommending a buy.
Technical analyst, Sudarshan Sukhani: Zee should be part of each ones portfolio at this point of time
Zee Telefilms broke out of the Rs 200 zone, and then became extremely bullish on my charts. This doesn’t mean it will come down and correct. But I think Zee should be part of the portfolio of every investor at this point of time. The stock can do all the right things and go much higher than what it is now.
Cipla has also been one among the stunners in the markets this week probably because it is getting closer to its record date.
Kapoor: No reason for the stock to go up further in the short-term
The stock is more than fully priced at this point in time, so whatever rise is taking place is either speculative or because its record date is approaching. But I don’t see any fundamental reason for the price to go further from here at least in the short-term.
Sukhani: Cipla needs to cool down
Cipla seems to have done its bit. I would be very afraid of buying it now. Let it cool down. All stocks do cool down even if the Nifty doesn’t.
Sanjay Dutt of Quantum Securities: Bonus signals that company confident about year ahead
The bonus news is good but it is very elementary. It sends out a signal that the management is confident about the year ahead, since only then would they have taken this step. The fact that they are positive about the future and are willing to increase their equity base, signals to investors that things are pretty good at this point of time for the tech sector.
Technical analyst, Rajat K Bose: If it remains above Rs 3183 level, bulls will not have any major problems
Infosys has crossed the Rs 3183-3185 range decisively. It can see a further upswing, although the opening was very high and the stock has come down a bit. But if it sustains above Rs 3220 level then one can expect it to move up further, and even touch Rs 3270-3300 level in the near-term. Probably on Monday before its results come out, that level will be scaled. Overall if it doesn’t fall below Rs 3183 level, I don’t think the bulls will have any major problems.
Dutt: Huge upside in Zee even from current levels
Overall besides the cricket news, the restructuring that was announced last week was pretty positive. I see a huge upside even from the current levels. However, there is nothing fundamental to justify the rise, whether we take the DTH business or the subscription business. Things are looking good for the next year or two. We don’t know what will happen in the short term but from a two years perspective, the stock still has the potential to be a multi bagger from the current levels.
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