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Talking Stock: Hold Yes Bank, BoB; Exit NTPC on rise

For the next six months, what matters the most is risk to the economy and markets from the spread of coronavirus.

ET Bureau|
Last Updated: Mar 30, 2020, 07.46 PM IST
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The huge equity base and current disruption caused by Covid-19 are a big drag on wealth creation opportunity from IDFC First Bank.
By G Chokkalingam, Founder, Equinomics Research & Advisory

I am holding 4,500 shares of Gujarat Gas, bought about Rs 30 ago at IPO price. Please suggest what I should do.
—VINOD BORKAR
You seem to be a long-term investor. Hence, you may hold the stock for the long term considering its strong fundamentals and growth prospects.

Please advise on the outlook for next six months for Yes Bank, BHEL, Balmer Lawrie and Bharat Electronics.
—ANJULA SINGHAL
For the next six months, what matters the most is risk to the economy and markets from the spread of Covid-19, rather than absolute fundamentals of individual stocks. If you are a long-term investor, you may hold all these stocks. Out of these four stocks, Yes Bank and Balmer Lawrie Company hold better wealth creation prospects in the long term.

I am planning to invest in IDFC First Bank for long-term wealth creation. What’s your advice?
—VINEET
The huge equity base and current disruption caused by Covid-19 are a big drag on wealth creation opportunity from IDFC First Bank. HDFC Bank, after 30% crash, is a more dependable banking stock to create wealth in the long term due to its efficient net-based banking platform and institutionalised setup.

I have 500 shares of NTPC, bought one month before at Rs 120 apiece. Since I need funds by the end of March, should I exit or wait for some recovery in this stock?
—KUNDAN JHA
Since you need money by March end, you may exit the stock if there is even 5% rise in the price as I believe that the emerging severe deflationary conditions in the economy due to wide spread of Covid-19 across the world are major concerns for the equity markets in the short term.

What should I do with 1,540 Edelweiss shares bought at Rs 210 each. Should I keep for a year or sell?
—YASH B
After losing over 80% of your investment, it is better to hold the stock for a year as I am pretty confident that the world will come of out recession or even possible depression within a year or so as some effective drugs or vaccine would be found for the Covid-19 virus within a year.

I hold 100 shares of GE T&D at an average price of Rs 371. Can I retain this stock in my portfolio?
—SAITEJ MAKHIJANI
You may continue to hold this stock for the long term as this kind of business model would continue to survive and grow as it forms the basic necessity for the people. Hence, it would face the current crisis situation successfully. This MNC stock also trades at an attractive valuation of just around 14 times FY2022 expected earnings.

What are the prospects of Bank of Baroda? I hold at Rs 100 apiece.
–RAJKUMAR IDNANI
Large public sector banks like Bank of Baroda would continue to enjoy the confidence of depositors post significant disruptions in the confidence levels of many mid-sized private banks. Moreover, this bank trades at steep discount to its adjusted book value. Hence, you may hold the stock if you are a long-term investor.

I have bought 200 shares of Avanti Seeds at very high price of Rs 687. Please suggest what I should do.
—VISHAL KHANDELWAL
You may hold the stock only if you are a long-term investor as its exports are expected to be impacted adversely in the short term. By FY2022, its earnings could bounce back to over Rs 30 per share, and hence, the stock could recover beyond Rs 450 in the next 12 to 18 months.

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