Is it time to buy ITC or PSUs like BPCL or NMDC? | Economic Times

It makes sense to buy PSU stocks like BPCL, BEL and NMDC on privatisation and Atmanirbhar India basis, says Sudip Bandyopadhyay, Group chairman, Inditrade Capital. If BPCL is to be sold, should one buy it on declines?Absolutely. That would be an excellent opportunity to buy BPCL. This disinvestment is happening and as soon as it happens, the prices will shoot up. So for any long-term investor, this is a great stock to buy at current levels. We are expecting the stock to settle at a price level of around Rs 550 as long as the buyer is not a financial investor. If the buyer is a strategic investor, that is where it should be. The company is inherently very strong and they have done the right thing by getting out of the Numaligarh refinery, selling the treasury stocks. I think the company is perfectly poised for a significant upward movement. On the overall PSUs, one really needs to look at Bharat Electronics (BEL). I have been positive on the stock for quite some time. With India’s focus on defence and Make in India, the future is excellent for this company as it is in defence electronics. So one can look at BEL. I have been bullish on NMDC as well though the metal cycle has slowed down a bit. But I believe that considering all the facts -- the company has got out of the steel mill business, they have diversified their customer base and global iron ore prices are going to be around $100 per ton in the near future -- NMDC is a great buy even at current prices. It is said that if one wants to bet on the India story, ITC is the stock. But in the last 10 years, it has not really generated wealth?Well unfortunately that is true. It has been a disappointment but the fact remains that it is a huge cash generating business and the sum of parts is definitely more than what we see on a consolidated level. I think that is what the market is talking about. There is a buzz that some of the businesses are going to be separated. Eventually that is what the company and the management will have to adopt and probably that will be good for everybody, for the individual businesses as well as for the shareholders. The sooner that is done probably that is better. Having said that, I have been recommending buying in ITC for some time and I will continue to maintain my view. Whether the business is segregated or not, at current level, the kind of dividend the company gives, the profitability the company has, the way the other businesses have turned around including FMCG, agri, hotels and paper boards, it is an excellent buy even without segregation of other businesses happening.