Buy RIL for trading bounce: Subramanian

R Venkat Subramanian, Head - Alternate Investments Group at Kotak Securities is of the view that one can buy Reliance Industries for trading bounce.

Subramanian told CNBC-TV18, "Reliance and Infosys are good for trading bounce but I think the longer-term problem for Infosys are not quite well known yet in terms of how it’s impacted them, we are waiting to hear from the company whether the crisis in Europe is going to effect them and whether what kind of slowdown they are seeing in their business from US. So to some extent the position with Infosys is not very clear while it is very cheap on historical valuation basis. The fact that the currency in their favour is tempting to buy the stock and the assessment of how bad this financial crisis is affected, we need to hear from the management."

He further added, "As far as Reliance is concerned, I would buy it for a trading bounce but you have to keep in mind that the refining margins and the petrochem margins are falling. The stock is not cheap and the only trigger for that is the upstream news flow, so to that extent Reliance may not have made its ultimate bottom, it has just started cracking in the last leg of this fall. So I would be a little more cautious about Reliance may be from a trading point of view you can buy it here but no more than that."

Source: MoneyControl