A few more months of pain left for the markets: Sanjay Dutt, Quantum Securities

Even as the stock markets have seen an aggressive correction in the price of many stocks, meanwhile, Sanjay Dutt, Director, Quantum Securities, is of the view that a few more months of pain are left till about October.

Speaking exclusively to Business Today TV, Dutt said the problems in the Indian markets have a lot to do with what is happening globally. "I think about 60-70 per cent of this negativity, uncertain economic environment is already there in the price. And that's clearly reflected by a large number of pockets across the market, specifically with equity stocks, which really have gone down 50-60 per cent. But I think there are few months of pain left which I think would probably go out till about October or so."

Talking about the US inflation, Dutt said, "I think the US is in a very complicated position this time, and there are no easy solutions that are possible. Time is the only thing that will sort out things. There isn't much that the policymakers or the central bank can do right now. Because, this time it's a bit too complex."

The market veteran is bullish on Indian PSU banks like Bank of Baroda, Canara Bank and SBI. The reason is that most of these are not over-owned or not at all owned by the FIIs or institutional players, and are at compelling valuations with much cleaner balance sheets compared to earlier.

On the LIC stock, Dutt said, "I think it will be an underperformer because of the way that stock was sold and marketed to investors. As you can clearly make out from the subscription pattern, the way the policyholder portion got subscribed way above any of the normal institutional and other portions - it is very obvious the stock was internally pushed to get subscribed."

"Definitely, insurance is a great bet. But, LIC maybe not. Maybe if it gets 10 times cheaper, probably for a trade," he added.

After a sharp correction over the last few months in the stocks like L&T Tech and Mindtree, Dutt seems to be turning cautiously optimistic about the mid-cap IT sector and suggests that one would be better off in moving out of these stocks and pick stocks like Infosys, Wipro and TCS. 

On cement stocks, Dutt advised sticking with the top three players. 

"At this point in time, bank on the Aditya Birla group. I think there is money to be made in the long term. Of course, there's going to be capex, there's going be time for them to really be able to deliver much more so much superior earnings going ahead. But that's one group I would like to be bought in stock as well as in the cement venture," he said.

Commenting on metal stocks, Dutt said that they have got growth prospects ahead. 

"Maybe next 6-12 months of pain, but that's where I normally tend to pick up stuff. And today in the market, I did take some positions in some of the metal names like Hindustan Copper, Nalco, Vedanta, Tesco. I think it's time to label into them," he said, adding that earnings estimates would go down.

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