Why Hemang Jani is bullish on Coal India but prefers to avoid metal cos

Commodities and metal space have been outliers of late and a large part of the outperformance is because of these geopolitical concerns and the fact that people are sensing that these prices could remain elevated for an extended period of time. If you are taking a medium to long term kind of a view then at these prices we would not be comfortable making an incremental or new allocation to these names, says , Equity Strategist & Senior Group VP, Motilal Oswal Financial Services Ltd.

1. Metals are outperforming. Can these prices sustain?
   Commodities and specifically the metal space has shown a significant outperformance mostly because of geopolitical concerns arising out of Russia Ukraine war. People are under invested when it comes to oil or aluminium or coal. From that perspective, there can be some more upside. But if you are taking a medium to long term view, then at these prices we would not be comfortable making an incremental or new allocation to these names.
2. But are these stocks good for tactical trade?
   When one enters at the peak of the commodity cycle and this kind of geopolitical tensions. prices can cool off at some point and so these stocks are not good from medium to long term. But one can go for momentum or tactical trade as there is going to be 10-15% uptick in steel, iron ore, copper, aluminium, coal or oil prices.
3. Why are you so bullish on Coal India?
   There is going to be a significant upgrade in the earnings. These kind of elevated prices could remain for a bit longer as the Ukraine-Russia saga is not coming to an end too soon. Also most people are under invested when it comes to stocks Some small allocation to Coal India is one of the preferred picks at Motilal Oswal.