As anticipated, the Indian markets seem to be in the midst of the Bull Run, though some voices of dissent do emerge now and then.

But trading interest is widespread and liquidity strong, and equity stocks -- particularly in the old economy sector -- have been identified as strong medium to long-term investment opportunities.

The corrective phase -- though brief - had helped the speculative and euphoric element to come off.

Yet, some more turbulence could not be ruled out.

Be prudent

It would be prudent to be selective and conservative in the sectors which you find attractive.

Our analysis shows that select cement, automobile, steel and banking stocks are emerging as sound buys.

Some of the companies -- particularly in the telecommunications and software sector -- look attractive mainly as short-term investments.

Investors backing Indian public sector undertakings may have to wait until the monsoon session in Parliament is over.

Following are the top 10 picks, which investors should look at, whether backed by a short- or medium-term investment perspective:

ACC

The oldest cement manufacturer in India, ACC (formerly Associated Cement Companies) continues to be a favourite. Demand is likely to remain strong, but with overcapacity and several players, the key issue for cement companies will be the pricing.

Cement prices have moved up steadily -- averaging Rs 141 per 50 kg bag during the past quarter, up from Rs 139 a year earlier.

Low interest rates will continue to fuel the construction boom and infrastructure projects (ahead of state elections) will help in keeping demand levels high.

India's cement capacity has risen 2.1 per cent to 141 million tonne this year against 138 million tonne last year, while domestic consumption is expected to expand 10 per cent from 134.5 million tonne.

ACC, being a key player, should see more growth in the next two quarters. Its Q1FY03-2004 results were strong and ACC plans to increase cement sales by around 8-9 per cent over the previous year.

Cement prices will move up once the monsoon retreats in September-end. Export demand will also pick up due to reconstruction work in war-ravaged Iraq.

ACC should be bought at current levels with a medium to long-term investment perspective.

ASHOK LEYLAND

The Chennai-based commercial vehicles company recorded steady growth for the Q1FY03-04. The company reported a turnover of Rs 584 crore (Rs 5.84 billion), up by 5 per cent quarter-on-quarter compared to the previous year.

Net sales went up by 26 per cent y-o-y on strong demand for medium duty goods vehicles. The company has also bagged major orders from state transport undertakings recently and has been ramping up its production capacity.

Its goods segment will continue to grow steadily over the medium term, considering that construction of road infrastructure will pick up in the southern region.

Ashok Leyland's performance last fiscal despite tough market conditions was also encouraging. The company's strategic positioning has been to reduce dependence on the domestic commercial vehicles market and focus on overseas projects.

Taking into account an Iraq export order for Cargo 912 vehicles (for the current year) and an 8 per cent growth in domestic sales volume, sales volumes for Ashok Leyland could grow by 15 per cent in FY04.

All these factors make Ashok Leyland a good medium-term investment opportunity.

AUROBINDO PHARMA

A much-in-the-news stock, the Hyderabad-based domestic pharmaceutical company Aurobindo Pharma has been increasing its net worth steadily.

The company recently upped its stake in its Chinese joint venture Aurobindo Tongling (Datong) Pharmaceuticals from the joint venture partner, Shanxi Tongling Pharmaceuticals, to make it's a wholly owned subsidiary of Aurobindo Pharma.

The JV manufactures and supplies intermediates for the Cephalosporin drug to the Chinese market.

Now seen as a fairly liquid stock, Aurobindo Pharma is seen as a good medium term investment in the pharmaceutical sector.

Technically, the scrip bottomed out by posting an intra-week low of Rs 202 during the week ended April 4, 2003 and gave an upward key reversal.

This had effectively ended 18 months of consolidation and a scintillating rally followed which saw the scrip registering sharp gains.

Currently the scrip has cooled off a bit, but the long-term trend is positive, making the scrip an attractive buy around the Rs 325-330 level with a medium to long term price target of Rs 500.

BHARTI TELE-VENTURES

In a cutthroat competitive environment, Bharti Tele is emerging as a player difficult to dislodge.

The GSM-based cellular subscriber base continues to be on the rise, and along with the WLL-M subscribers, a forecast with a total subscriber base of 25 million by the year-end is achievable.

In that scenario, Bharti Tele has maintained its market share, adding 2.75 lakh (275,000) subscribers in June 2003 and increasing its market share for the third consecutive month.

Its overall subscriber additions for Q1FY03-04 were 6.8 lakh (680,000). Bharti's market share exceeds that of BSNL, but it faces competition in the newer markets (southern and western circles).

With capex expected to rise, the media reports are that Bharti Tele-Ventures Ltd is contemplating a Nasdaq listing in 2004-05 and is also considering the proposal of invest Rs 2,000 crore (Rs 20 billion) this fiscal.

Investors should however look closely at the industry and how it performs, so the stock may look attractive only for a short- to medium-term investment.

HUGHES SOFTWARE SYSTEMS

Performance-backed growth and a steady customer base, makes Hughes Software a good short- term investment. Hughes Software is the largest service provider of broadband satellite network solutions and has witnessed a sharp rise in its bottomline at Rs 15 crore (Rs 150 million) on a turnover at Rs 78 crore (Rs 780 million), up by over 57 per cent.

Unlike other software companies, the market perception for Hughes Software is changing rapidly. It is seen as a serious telecom player, rather than limiting itself as a business process outsourcing company, which was largely dependent on its parent company, Hughes Network Systems.

Hughes Software's service revenues from the telecom segment have grown by 52 per cent (q-o-q) at Rs 72 crore (Rs 720 million) and account for 94 per cent in the total revenue.

The balance has come from business process outsourcing business. Critically, its revenues through services provided to HNS have declined to 22 per cent.

Outsourcing from global telecom giants is on the rise and this will aid Hughes.

Improved traction in the telecom service provider space is also a positive. Its operating margins have improved, though these could take a dip in coming quarters.

Analysts are, however, likely to revise upwards their earnings forecasts for FY2004 and FY2005.

Those with a higher risk-reward appetite could look at this stock.

ITC LTD

The tobacco major posted strong results for Q1 FY03-04, with net profit up 15.49 per cent at Rs 397.22 crore (Rs 3.972 billion) and total income up by 3.61 per cent at Rs 1,485.9 crore (Rs 14.859 billion).

ITC's performance is backed by growth in the FMCG business, which could show a profits growth of 15-16 per cent over the year.

The core tobacco profits are strong with earnings before interest growing steadily. The macro picture for the cigarette business is still favourable with more than two years of flat excise rates and a delay in the implementation of the value-added tax (VAT) regime.

Cigarette volumes in FY03-04 could rise by 7 per cent, analysts say. The hotels business and operations have been streamlined and a strong performance is expected here also. ITC remains a key stock in the FMCG sector and investors should buy into the stock at lower levels.

From a technical viewpoint, ITC has continued a rise and fall sequence periodically but the price range became narrower due to an omnipresent supply line.

ITC has overcome the four year tested supply line. Currently it reacted after facing selling pressure at the Rs 780 levels and it could face reasonably strong support from the Rs.724-Rs 729 levels making it an attractive buy at these levels.

The scrip seems to be in a long-term uptrend with a medium-term price target of Rs 850.

JINDAL STEEL

Backed by news developments (of company restructuring to insulate itself from exposure to other group companies), the stock has seen better trading interest in recent sessions.

Jisco has informed the stock exchanges of a board of directors proposal to split the company businesses. One company will focus on its core business -- the manufacture of flat steel products -- while the other will become an investment company. Jisco is a leading galvanised and value-added steel producer which has seen a financial turnaround.

The company's investments have been a drag on the financial performance and analysts feel the restructuring could enhance shareholder value.

MAHINDRA & MAHINDRA

Despite disappointing performances at the domestic markets, M&M is positioning itself as a key exports player and focussing on its tractor business.

This business has in fact registered better growth in recent months for the company.

With a better monsoon, the domestic markets will also become an attractive proposition for M&M in the coming two quarters. From a technical perspective also, the company looks sound.

The company reflected strength by moving sideways in a consolidation phase before showing positive and decisive price action in the last month itself, which saw it move to a high of Rs 190.10 during the week ended July 18, 2003.

Currently the sharp upside would seem to suggest a cautious approach, while fresh long positions can be generated around the Rs 145 level with a medium to long-term term price target of Rs 220.

STATE BANK of INDIA

The success story for State Bank of India does not seem to end. A market favourite, most retail investors may think that the stock has run up too much over the past 5-6 months.

This is a safe option as the SBI is seen as an attractive investment at lower levels. It would be prudent for investors to wait for a while, but declines should be seen as opportunities to buy into the stock.

From a technical viewpoint, SBI is moving in an upward sloping channel on the weekly charts after taking support on its demand line. Its rapid and prolonged price rise could mean a correction lurking around the corner.

It is a superb buy opportunity at lower levels around the Rs 258-260 levels with a long-term price target of Rs 500.

Looking at pure numbers, an improving loan growth, stabilising margins, and increased operating efficiency could see the bank deliver an earnings growth of 20 per cent CAGR over FY2002-2005.

The only restrictive factor could be the limit on the foreign institutional investors' holding in the SBI stock.

TISCO

Good financial results for Q1FY03-04, better branding in recent years has made Tisco one of the key stocks to own for a short to medium term perspective. Even on the technical charts, Tisco suggests a positive outlook.

For Q1FY03-04, Tisco posted a turnover of Rs 2,257.1 crore (Rs 22.571 billion), up by 28 per cent when compared with the corresponding quarter of the previous year. The only concern there could be is that its sequential q-o-q growth has been patchy.

The company recently bagged an order from Proton, the Malaysian car manufacturer, to supply about 5 per cent of the steel requirement in the initial stages. This is the first step by Tisco in overseas steel business and analysts see it as its strategic presence in the Chinese automobile industry. The shipment to Proton is expected to commence this quarter, totalling 3,000 tonnes in the first year.

From a technical perspective, Tisco is showing its best performance in recent years. Currently the scrip has done the requisite spadework and has overcome a 6˝-year-old supply line, which makes it an attractive long term investment, with a price target of 260. The scrip should be bought on a decline.