Your Stocks: Experts’ take on holding Motherson Sumi, Whirlpool, Exide Industries

In an interaction with CNBC-TV18, Rahul Mohindar of Viratechindia.com and Parthiv Shah of Tracom Stock Brokers shared their reading on specific stocks, sectors, and markets.

They spoke at length about Motherson Sumi, Intellect Design, Jubilant FoodWorks, Whirlpool, Exide Industries, Power Grid Corporation, and Poonawalla Fincorp.

Shah: It is a company with a very strong management pedigree, and I feel that the current price factors in most of the negatives. If at all things tend to improve, probably we will see a massive recovery because of the automotive clients or the customer base that Motherson Sumi has. They are talking about better volume growth going ahead. So, I would suggest a hold.

Mohindar: After almost a 40 plus percent correction over this year itself, I think we are at, again, a strong support point. The 200-week moving average even comes in at Rs 110-115 level. I think this is not a point to attempt exiting or shorting. This is a point where you kind of watch and wait for a breakout. It is hard to time this, but there is evidence that this is a clear point where there could be a bit of price rotation and reversal. So, a clear hold from my side.

Shah: Instead of Intellect Design, switch to a better name, maybe TCS or Infosys, after this recent correction. In terms of Intellect Design Arena being a mid-cap IT company with slightly elevated valuations, my sense is they will have major headwinds in terms of higher wage costs because this is an industry which is plagued with very high attrition rates. Also, there is a lot of competition in the verticals that they operate in.

Mohindar: I am worried again. In the short term, I have a target of about Rs 510 on the stock. So for me, it is really in a sell mode, particularly if I am looking at the short term. If you are looking at switching, I would agree to try and go into frontline IT stocks. But again, coming right into Infosys and TCS right now would not be prudent. If we get another 5 or 6 percent decline on those frontline heavyweights, that is when I would try and time it better.

Mohindar: I think Rs 1,440 is the key support. The stock is already on a downtrend. Keep in mind that we are not too far away from those levels. So. this is really, again, a point where you may consider holding on but keep a clear stop loss below that Rs 1,440.

 Shah: I think very frothy valuations and what we are seeing is that the margins are almost halved thanks to the fact that the raw material input cost has been very heavy and there has been a lot of competition in the white good space, which is also creating a lot of issues for players like Whirlpool. I would again suggest a hold or do not add here because there could be some downside.

Shah: Exide Industries is quoting at reasonable valuations, and thanks to the fact that the zinc and the lead prices have started coming off, I think that should be helpful towards sustaining the margins. Also, they have massive plans in investments in the lead and even the lithium-ion battery space, which should give some traction. They have a very strong balance sheet thanks to the fact that they exited their Exide Life business, which as and when they start monetizing their balance sheet will be very cash-rich, and they will be able to invest in your business prices. So certainly hold on to Exide Industries.

 Mohindar: Exide likely to see Rs 130 in my opinion, so again, short-term looks a little difficult to me. I would keep the stock on a sell even now.