CA Rudramurthy BV suggests a cautious, sector-specific approach; 5 insurance & defence stocks to bet on

CA Rudramurthy BV
, MD,
Vachana Investments
,
says CA Rudramurthy BV suggests monitoring Bank Nifty and Nifty closing values. Crude oil and dollar-rupee movements are also important. Financials, especially insurance companies like
HDFC Life
,
SBI Life
,
LIC
, and
Max Financial
, show promise.
Defence sector stocks
, specifically
Bharat Electronics Limited
(BEL) and
Hindustan Aeronautics Limited
(HAL), are favorable. A cautious, sector-specific approach is advised.
We always feel that you have been positive on the markets indeed with your bullish stance. Today the Nifty once again crossed past the 25,000 mark. What does it mean and what should the investor strategy be like?
CA Rudramurthy BV:
First of all, at index level, Nifty has made repeated attempts to break this 25,050 zone and now we are more or less closer to that. But I want to see whether we can close above 25,050 level and if yes, then I will say the move between 24,450 and 25,050, the consolidation of about 700-800 points is already done and dusted.
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We have to see whether we can close above 25,050, which is very crucial or again getting back to those support of 24,450, 24,500 cannot be ruled out. For me, even at the current market price, we are still in the range. I want to see a close of about 25,050 on Nifty and similar levels on Bank Nifty. Support is there at around 55,100 and below that, we have Bank Nifty strong support at 53,500 where the range is and on the upside, resistance is kicking in at 56,200. We are more or less there, but we are yet to close above 56,200 on Bank Nifty.
So, to make it very clear, Bank Nifty should close above 56,200 and Nifty has to close above 25,050 and then one can say we have decisively broken out or we have to still wait on. Look at Brent crude. Crude prices are trading above $76 per barrel on the spot level decisively and even if you look at dollar-rupee movement, the dollar-rupee is decisively trading above that 86.50.
So, for me, Brent is yet to come down. Coming to dollar vs rupee, again the dollar is yet to come down. Trump will now say for two weeks he will do nothing and he will give space for the Iran-Israel war to continue, but tomorrow again Trump might post another tweet and there can be escalations this weekend. So, I am bullish, but I will be very cautious and I will be very sector specific and stock specific. Let us wait and watch and then take a call next week. But till then, be very sector specific and stock specific.
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But speaking of being stock specific, what would be your calls? What are your long positions?
CA Rudramurthy BV:
For me, definitely financials will continue to do good whether you want to pick up something like insurance companies or NBFCs which are all allied groups of financials, which can do very well. So, for me, insurance as a sector can perform very well.
Look at HDFC Life, look at SBI Life, and even LIC in the cash market to buy. For that matter, Max Financial also looks very good. For me insurance looks very strong and this can be the next big theme. And even defence for that matter can do very well, but you have to be very stock specific when it comes to defence.
I like two stocks in defence – BEL and HAL – which still offer great value even at current market prices. I will be avoiding Mazagon Dock or Garden Reach and all other counters which are more or less there with high valuation, but BEL and HAL are very good at current market price.

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