Kotak Mahindra Bank and Godrej Consumer Products are our stock picks: Gaurang Shah, Geojit BNP Paribas Financial Services

In a chat with ET Now, Gaurang Shah, VP, Geojit BNP Paribas Financial Services, says if the earnings deliver much more than what the expectation is, then we might revise the target upwards

ET Now: Any stocks to pick considering the valuations and stock prices have come off so much? Gaurang Shah: A lot of stocks have actually corrected in terms of price as well as time correction. Some of the stocks in some of these sectors starting with front line and selective midcaps have become quite attractive. So there are two different sectors that we have identified today. One is a private sector bank and other one a FMCG company.

The first one from the private sector banks is Kotak Mahindra Bank. As we all know, the merger of ING Vysya created a little bit of concern for a wee bit of time but post that, positivities have emerged in the numbers that have gone by and we believe that with the kind of gamut in the reach and the financial product that Kotak Mahindra can be a good stock. Given our view that in the second half of the calendar year 2016, starting from June-July onwards till about the end of 2016 and into the next year, we will possibly see revival of banking sector and in that revival, we will possibly see the private sector banks taking a lead from the front. So at current valuation, your downside is protected. We believe with the positivities and, of course, the rate cuts which have happened last year and which are likely to come through, we could possibly target Rs 790, a very conservative target.

If the earnings deliver much more than what our expectation is, then we might revise the target upwards. The second stock is from FMCG/consumption theme. It is a consistent performer called Godrej Consumer Products Limited, GCPL. It has great numbers and a fantastic outlook going forward. Acquisition in the overseas market is growing to increase its footprint and the presence. Numbers were great like I mentioned and with this acquisition, there is a possibility of cross boarder sales thereby improving the visibility on the numbers in quarters to come by. On Godrej Consumer Products with the one year plus time horizon, we are standing with a target of Rs 1450, again with more acquisitions and more presence globally. I am quite sure that the numbers are going to look more interesting and positively upwards which may encourage us to revise the target upwards.