SECTORAL PICKS All sectors across the board STOCK PICKS Infosys, Dr Reddy's

"Unlocking value in PSU shares is now becoming a reality. And there are still some opportunities as valuations remain low." Dilip Madgavkar, Chife Investment Officer, Prudential ICICI Asset Management

The budget doesn't matter. That's right, the cover-theme of this issue of Business Today, one to which a dozen-odd pages of valuable paper has been devoted isn't all that relevant to successful investing.

The basis of that claim isn't the traditional pre-Budget rise in the Sensex (it was up by over 150 points in just 12 trading sessions at the time this article went to press); it is the fact that a clutch of fund managers-not just an ordinary clutch, but one of high-performers-believes investing in the stockmarket has never been as easy (and probably will never again be) as it is now.

Samir Arora, the Singapore-based head of emerging markets at Alliance Capital-he manages some of India's most successful funds-is one such sanguine individual.

''I am super-bullish,'' he says. Prod the man a little and he rattles off the reasons for his positive bent of mind. ''The major concerns are out of the way. Low interest rates, attractive valuations, good corporate performance, and large retail cash positions with retail investors still underweight on equity.''

There's a common thread running through the picks of fund managers like Arora: high growth companies with P-E (price-earning) multiples in the 15-20 band. A sweep as broad as that can't but transcend sectoral biases.

SECTORAL PICKS IT, Automotive STOCK PICKS Digital, Satyam, Hero Honda, e-Serve International

"Interest rates are low, valuations, attractive, and there are large cash positions with investors still underweight on equity." Samir Arora, Head, (Emerging Markets), Alliance Capital

Indeed, as Prashant Jain, the Chief Investment Officer of Zurich India Mutual Fund puts it, investors should find it hard to make a wrong move now; it's that obvious. ''Except tech stocks, almost all other stocks are undervalued. When the rally happens, it is certain to be widespread.''

Jain's preferred example to prove how undervalued stocks are is the public sector oil major Indian Oil Corporation (IOC). An IOC Bond offers investors a return of 8 per cent. And an IOC stock that of 7 per cent. But the stock also holds the promise of appreciation. Ergo, it is a good buy.

Take Your Pick

There's a strange buzz doing the rounds of the markets these days: be choosy about scrips and indiscriminate about sectors, it goes.

Is this the right time to enter the market, then, and buy select scrips across sectors? It may well be, says Dileep Madgavkar, the Chief Investment Officer of Prudential ICICI Asset Management. ''With the index at 3,400-levels, the (upward) trend has barely begun.''

That it has: the scrips of fast moving consumer goods (FMCG) and financial services companies, and banks have shown little sign of movement these past few months, and there is an even chance that they will now rise.

SECTORAL PICKS All sectors except IT STOCK PICKS HLL, Dr Reddy's

"Except tech stocks, almost all other stocks are undervalued. When the rally happens, it is certain to be widespread." Prashant Jain, Chief Investment Manager, Zurich India Mutual Fund

Then, there's the little factoid about the economy. ''Economic indicators are showing an upswing,'' says K.N. Siva Subramanian, Fund Manager, Pioneer ITI Mutual Fund. ''There should be better growth in economy-related stocks like cement, steel, and consumer vehicles this year.''

The operative term is 'better growth'. Gone are the days when only tech scrips could hold the promise of growing at over 25 to 30 per cent. Today, there are scrips in several other sectors that can do so with ELAN.

Pharma is one such sector, and current valuations seem to bear that out. ''(Investors should pick) Pharmaceutical companies that have international growth engines, opportunities in the international markets, and have built a fairly robust model whether in the area of drug discovery, drug delivery, or selling branded formulations in regulated markets,'' explains Bharat Shah, Chief Investment Officer, Birla Sunlife Mutual Fund.

As for tech, the recommendation of fund managers ranges from investors being selective about the scrips to pick to selling on dips to avoiding the sector altogether.

SECTORAL PICKS Pharma, Software Services STOCK PICKS Dr Reddy's, Infosys, Hero Honda

"Investors should pick pharma companies that have international growth engines are robust models." Bharat Shah, Chief Investment Officer, Birla Sun Life MF

Several fund managers are still bullish on Infosys, Wipro, and Satyam; Birla Sunlife's Shah is rooting for BPO hothouse e-serve; and Alliance's Arora boasts Digital Globalsoft among Alliance 95's top 10 holdings. ''India has a natural advantage in software,'' exults Shah who has actually pared down the exposure of the funds he manages to the sector. ''It may not be the same companies, but the basic proposition of infotech remains valid.''

Track Your Managers

Those investors who're still feeling queasy about blindly following the fund managers need only look at the queer case of PSU scrips. BPCL, HPCL, and Container Corp have been on every fund manager's list-of-choice for at least a few years.

Now that the government has finally got its disinvestment act together, most of them are sitting pretty. As Madgavkar of Prudential ICICI puts it: ''Unlocking value in these shares is now becoming a reality. And there are still some opportunities as (PSU) valuations remain low.'' That means there is still time for investors to pick PSU stocks cheap, although the early-February run on these scrips has witnessed a significant amount of re-rating.

SECTORAL PICKS Economy-related sectors and information technology STOCK PICKS Infosys, HPCL

"There should be better growth in economy-related stocks like cement, steel, and consumer vehicles." K.N. Siva Subramanian, Fund Manager, Pioneer ITI MF

Those investors uncomfortable with the sectoral approach will find enough individual picks in the portfolio of successful fund managers. These range from obvious choices like Hero Honda and Ashok Leyland-multi-axle vehicles are in vogue-to not so obvious ones like TVS Suzuki.

Then, there are the scrips of companies that are global players in specialised categories. Heard of Moser Baer, Hindustan Inks, and Essel Packaging? The first has built global capacities in magnetic media; the second in printing inks; and the third in packaging.

To find gems such as these, investors should look closely at the portfolios of the funds being managed by the men featured here.

Arora, for instance, has placed a small bet on UB doing well. Why? The Indian beer industry should do well given its low base, and the takeover of Scottish & Newcastle by UB bodes well for the company.

As for the budget and what it means for our investing strategy, we'd like to leave you with a quote by one of our featured fund managers Sivasubramanian of ITI Pioneer. ''Most big announcements have already come.'' So, what are you waiting for?