Buy Colgate Palmolive, Godrej Consumer; sell Dr Reddy’s Labs, Lupin: Ashwani Gujral

Aug 04, 2017 09:32 AM IST | Source: CNBC-TV18

Ashwani Gujral of is of the view that one can buy Colgate Palmolive and Godrej Consumer and sell Dr Reddy’s Labs and Lupin.

Ashwani Gujral of told CNBC-TV18, “All of these FMCG stocks have had interesting reaction to results where bad results, people have brought very strongly. So, it appears that big hands are waiting for poor results to buy into these companies.”

“Colgate Palmolive is a buy with a stop loss of Rs 1,060 and target of Rs 1,125. Godrej Consumer is a buy with a stop loss of Rs 960 and target of Rs 1,000. Dr Reddy’s Labs is a sell with a stop loss of Rs 2,345 and target of Rs 2,265,” he said.

“Lupin is also a sell with a stop loss of Rs 1,005 and target of Rs 960. Yes Bank could correct some more. That is a sell with a stop loss of Rs 1,800 and target of Rs 1,750.”

“What I want to see is the reaction to these results. Sometimes reaction can be very different from your perception of the results. For the moment, Ceat has been consolidating since May 17. Today can be fairly decisive, either it can breakout or breakdown. If you get a sharp upside post these bad results, maybe Ceat also gets benefit of Goods and Services Tax (GST). I think then it would certainly qualify as a buy because it has contracted for three months. So wherever it is going to move, it is going to do that in a fairly strong and sharp manner.”

“Biocon has been a stop-start type of stock. Initially, it did outperform but that in a problem sector, even the best stock will get into trouble. However, let us see if it can hold on to Rs 340. I think there is still an opportunity to get long. However, I don’t think overall pharmaceutical and IT are ripe for buying; you would much rather get into a sector which does not have a lot of problems. These are structural issues and structural issues keep taking stocks lower. This is not a business cycle issue like GST which will get solved post GST. So, you have to be very cautious on pharmaceutical stocks,” he added.

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