Mehraboon Irani's top 3 stock picks

In a chat with ET Now, Mehraboon Irani, Nirmal Bang Securities, says ICICI Bank, ITC, ONGC are good bets in the long run

ET Now: Let us talk about your current portfolio strategy. Your top three ideas where are you nibbling and where are you locking some gains?

Mehraboon Irani: Quite a few largecaps came up with such sharp falls that you do not see too much of downside. There may not be any positive triggers at the moment, but one could buy into it because unless the broader markets collapse for any global reason, as far as the Nifty in concerned, we do not see a fall of more than 5-6 per cent. The reasons are very simple. Quite a few of the stocks which could hurt the index, have already come down very sharply. Look at ICICI Bank, ITC, ONGC. Even Tata Motors has already come down to lower levels and may fall another 5-7 per cent. An investor should go and buy into solid midcaps names, names which you feel will continue to do well. Also, go and buy into select smallcaps if you have worked on those companies very well. But in the bigger names, if an opportunity comes in stocks like may be ICICI Bank, a name which everybody loves to hate, could see a downside of another 5-7 per cent now, but it couls also see 20-45 per cent appreciation over the next two years. If you look at ICICI Bank’s loan book, 45 per cent of it is solid retail. So, why should you stay away from the stock just because you feel the March quarter numbers will be bad? Don't overlook it just because the stock could come down to Rs 190-195 as you could miss a bigger opportunity as the stock is going to go back to Rs 270-300 over the next two years. You have to go and buy into a front line like ITC also. Dr Reddy is another one. At Rs 2700-2800, we have bought it for our clients knowing that the downside could be kept and we are making money as the dollar index has come down. So this is the way one should be looking at it. There are some frontline names like Tata Motors which is at Rs 320. If it is going to get down to Rs 300 and further down, so what? When it is going to go back to Rs 400, I am making a 30 per cent return. That is what we have been telling clients and allow me to state that I personally feel the clients are in fact inquiring that whether we should put in more money in this market because they also feel a whole lot of opportunities are coming up in front of us.