The Hindu Business Line : Keenly awaiting Q1 results, follow-up guidances: IL&FS

For Sreesankar of IL&FS , the markets touching a new high is going to be a function of not only liquidity, but also the corporate performance which is going to be announced. He has a view that the outlook today continuous to remain cautious, but the market is willing to look at flirtations, provided these flirtations are at a reasonable price where investors are left with something on the table.

Excerpts from the exclusive interview with Sreesankar:

How have you been reading the consolidation phase the world has been talking about at this point and the liquidity inflow that people are watching out for to bump up the markets from current levels?

The markets have been holding on very well. The way investors are reacting is seen from the IPO listings that has been happening. Most of the recent IPO listings have had a dream debut. Good companies have come out with reasonable valuations to the market and the markets have given thumbs up approach to these with most of these stocks quoting a very high premium probably even double of what the IPO prices where. So the outlook today continues to remain cautious. But our understanding is that the market is willing to look at flirtations, provided these flirtations are at a reasonable price where investors are left with something on the table.

But on account of liquidity which is expected to hit the markets, do you think we are very much in sight to regaining or testing new highs?

To me touching a new high is going to be a function of not only liquidity but also the corporate performance which is going to be announced. So I am keenly awaiting the Q1 performance and the follow-up guidance for many of the software companies and also what indications are going to come out from the automobile pack.

There is obviously an impact of increased interest rates that we have seen in the last quarter rather than the current quarter on automobiles to start with and I suspect that would have extended to even home loans etc

The rupee appears to have peaked off at this point in time. Would you be an early buyer in IT stocks or would you wait for the results?

IT Stocks have in general under performed and so from our recommendations earlier IT was an underweight, and I would love to listen to the guidance given by the IT companies before I put my neck out.