Sugar Sector

Sugar sector has been news for quite some time owing to the political upheaval in Uttar Pradesh. On sugar, Anand Tandon of Gryffon Investment Advisors says that there are no fundamental reasons to buy sugar yet. “There could be political reasons and some expected sops but that aside, the companies cannot make money on selling sugar at least in the near-term”

Sudarshan Sukhani of Technical Trends is long on Bajaj Hindustan and Balrampur Chini. He believes that the ideal time to buy is when the sector is in the dumps and when all fundamental analysts will say that sugar will never go up. However he adds that “This is not a trading call, this is something that I am looking at for the next one or two years”

Steel Sector

On this sector Anand Tandon feels that the outlook is somewhat mixed with the international prices being reasonably firm and the general outlook of the companies also continuing to remain firm. “From that point of view maybe there is a reason to hold on to some of these stocks but you have to remember that all said and done, it is a cyclical industry,” warns Tandon.

However, Atul Suri of Marathon Trends puts his bet on this sector. "I think steel has been one of the really quiet performers, no one talks about it but lot of wealth has been created" he states.

Banking Sector

Banking is another sector which have been doing well for the past few trading sessions. Q4 numbers from the banking industry were in line with street expectations. Net interest income and net profit for the banking sector as a whole increased by 25% and 15.3% respectively in Q4 FY07. A lot of people have been arguing that more value is found in PSU banks right now and for the first time people have started believing that it is better place to be in than private sector banks.

Anand Tandon seconds this thought saying that the PSU banks have had the biggest knock and therefore suffered the most with the fears of interest rates going up. “From that point of view therefore offer significant value” The private sector banks on the other hand will be in play over the next few quarters as it becomes clearer that some of the international players maybe allowed to invest in India.

Sudarshan Sukhani feel that the charts of the private sector banks suggest that the final up moves are still to come. Though he adds that "I am a big fan of PSU banks so to me all the charts looks good,”

Media sector

Lately there has been a lot of activity in the media and entertainment sector. With Brokerage firms like UBS are betting on the Indian media sector, they feel that the Indian media stocks will continue to trade at premium valuations, given their high growth potential over the long term and strong growth in the near to medium term.

Anand Tandon feels that valuations are not cheap but looking at growth, the valuations have to be factored in and the numbers, which are fairly large, will take some years from now. That is what the media companies are reflecting at this stage.

"I would be a little selective in what I pick up from media because when they correct, they correct very fast on low volumes, so I would go for stocks, which have higher volumes" adds Suri.

--Sayoni Sinha

Source: Moneycontrol