26-Sept-06. Buy on SBI, Patni, Infy.Sell on all other PSU Banks

Markets raging. Need an extinguisher to go and say, "Hey, grow gradually!".
Signs of excess liquidity in the market, which is a precursor to a strict monetary policy and rising interest rates.

So keep away from Banks. No buys on any PSU Bank, except SBI.
Reasons:

1. De-merging of associate banks like SBT, SBB&J imminent in medium term.
2. Strongest management.
3. Restriction of 200 shares of banks to be held to go(imminent), liquidity increase to benefit SBI.
4. Strongest overseas presence.

Buy on Patni and Infosys.Reasons:

1. Strongest quarter for IT Companies, esp. Infy.
2. Never lost money in this quarter since 2001.
3. Infy has seen gain in each month of this quarter for last 4 years.
4. Infy has beaten the sensex gains in each month of this quarter for last 4 years.

Patni:
1. Quoting at lower end of the spectrum(15x of 2007 P/E multiples) as compared to Mphasis which is trading at 16x-17x.
2. Again, strong quarter for IT companies.
3. Not as strong a runup as other IT companies so far in this rally.

Thats for now, adeiu!