3 sectors that Rahul Shah is bullish on right now

“The new product launches will add value to and sales would be better in the coming couple of months. So I would buy Maruti with the target of Rs 10,000 from current levels,” says Rahul Shah, V-P, Equity Advisory, .

After a 7% move coming from the auto index and with the auto sales data and new product launches coming up next week, do you think there is more upside and steam left in auto counters? If yes, then which stocks would you pick?
Obviously last week the auto companies did very well. I will prefer to pick Maruti on the passenger vehicle side as the stock has already moved up 6-7% in the last week and there could be some more upside in this stock as the valuation looks interesting and quite comfortable at these levels.

Also, the new product launches will add value to the company and sales would be better in the coming couple of months. So I would buy Maruti with the target of Rs 10,000 from current levels.

The other space which managed to make a comeback this week was the entire FMCG basket. for instance was up around 9% this week and there is also this tailwind now that commodities are cooling off. Overall do you expect that going forward given the fact that these companies have already taken price hikes the margin pressure or the worst of the margin pressure is behind us?
The fear of inflation had pulled down most of the FMCG companies in the last few months but as the prices now have started cooling off they are looking to make a comeback. Going forward I still feel that could be one of the stocks from the pack which one should look at at these levels.

Is it the right time to buy some of our favourite stocks or is the bottom still some time away? Is it better to still sit on the sidelines and let the consolidation happen?
I am of the opinion that one should look at and build up a bottom-up approach. Lot of stocks individually have been offering great value propositions in this selloff.

At this juncture one should start building up a portfolio and I think financials should be one of the top bets as the numbers have been top notch in last quarter and considering the commentary from the management post Q4 numbers it looks like Q1 numbers should be strong.

What do you think will be that domino effect that can change the course for the market because right now we seem to have digested inflation and also the Fed rate tightening. Are you expecting further rounds of fresh earnings downgrades to happen and could that be something that the market needs to watch out for?
Earnings downgrade is the biggest fear in the market right now as the rest have already been discounted by the market at this juncture.

If an earnings downgrade will happen, then we will see some more downward risk to the market and if it does not happen, then we have already discounted most of the events which is the noise in the market at this juncture.

If you had to take a bet on high conviction buys at the moment which are those sectors or stocks that you would pick?
Financials and banks remain my top picks and in that space I think private sector banks are leading the charts. I would prefer

, and as they look very attractive at this juncture. The valuation looks quite comfortable at this level. Also, few auto names, preferably Maruti and the metal space remains the top pick at this juncture.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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