Stick to quality names even if expensive; like SBI, TCS says Macquarie’s Sandeep Bhatia

On economy front, he said, “For an investor, the focus is always on securing capital and making a return on that. Te priority is also to have security of capital. For the last 2 years, we have been waiting for a broader economic revival. Unfortunately that has not happened and I wouldn’t say that a broad economic rebound is going to happen in the next 6 months.”

“I would want to wait for January-February-March period. There are pressures on the fiscal deficit. We could see some moment on GST, tax slabs for some categories. All and all, would prefer to stick to quality and especially, the high quality bank financials is where the money is to be made, at least if nothing else you will preserve your principal,” Bhatia added.

When asked about budget expectations, Bhatia said, regardless of what was expected and what was done, the fact is that we are going to miss the fiscal targets. “I don’t think there is any room to make any big tax changes in terms of raising taxes. Some of the things, which have been done, which have hurt investor confidence need to be relooked at."

"I cannot fathom right now what they can do or they will do. The only thing I will advise is – don’t make any big negative tax changes, and allow the economy to come back - it’s going to take at least 6-12 months, and also let some of the fisc go. We are seeing the fisc go close to 4 percent for the current year and it would remain in the same region next year too but allow that healing process to come through, otherwise we are just chasing our own tail,” he further added.

Stock specific, he said SBI is the only name he would bet on. "There are questions on the structure and final outcome of some of these PSU banks in terms of - if there are any mergers being proposed, the state of capital adequacy and new fund raisings. So in that scenario SBI has a lot of valuable subsidiaries; we will see the IPO listing of SBI Cards and that should be a good outcome for the bank.”

The house is also upbeat on TCS amongst the Tata Group but is a little cautious on Tata Motors. According to him, we could see a big volume push in autos in 2020 as inventory builds up. So, focus would be more on domestic auto names rather than global facing auto names, he added.