Buy metal stocks, negative on financials, OMCs seem attractive, says Dimensions' Ajay Srivastava

However, Srivastava is negative on the banking and financial sector.

He believes the competitive pressure is enormous in the banking sector and with an economy as sluggish as the current one, the pie is shrinking and the number of players is growing.

Srivastava said he won’t buy smaller banking stocks due to the technology upgradation headwind.

“There is no thesis for these banks to prosper for an investor from a two-three year perspective and the risks are enormous not only for us as investors but as a depositor and a user because, with the technology they are using, they are open to serious risk,” he explained.

In terms of market, he said, “This is the time when you have to be cautious, one cannot take a blanket view,” he said.

Srivastava believes all three state-owned oil marketing companies (OMCs) are trading at attractive valuations.

“Hindustan Petroleum Corporation Ltd (HPCL) is an extremely cheap stock. I am a great believer that these companies are perhaps the most undervalued stock portfolio even at the present prices. You can pick and choose which one you want, HPCL, Bharat Petroleum Corporation Ltd (BPCL) or Indian Oil Corporation (IOC), any three or a combo. You have to be patient with them. I think you are talking about four-five baggers on most of these stocks,” he said.

According to him, any company with a turnover below Rs 250-400 crore is a very difficult investment choice at this point in time.