“This quarter numbers were pretty strong versus the private banks. So, PSU still remains the top bets in the financial space and that is what the mood also among from the desk as well,” says Rahul Shah, MOSL.
How is the mood at the desk? Are you recommending your big HNI clients to start booking some profits or are they eager to deploy more because they missed out on this mega mammoth fall to deploy? How is the scene there?
I think the mood is very positive. Obviously, as you rightly said, a lot of people missed out last Tuesday when we saw the sell-off in the markets and obviously, so I think luckily most of them are still holding on to their positions and not sold it and they are just riding it. So, obviously, a few things which I can just discuss and one is obviously PSU banks. What we also see and as a house also we feel that PSU banks will outperform the private banks and in financial space a lot of room is there for PSU banks.
This quarter numbers were pretty strong versus the private banks. So, PSU still remains the top bets in the financial space and that is what the mood also among from the desk as well.
We have been talking a little bit as well about a comeback of private sector banks. Is that something that you would look at selectively as well?
Selectively, the beta would be more into the PSU banks from here. But in case of private sector banks, as we are seeing, there is a broad-based rally in the markets. We have seen the FIIs participation back into the markets in the last few days.
I feel that whenever they return, it is more of a private sector banks first and then the PSU banks. So, for private sector banks this quarter numbers were also decent.
So, in that space, ICICI Bank remains the top bet from our end and that could be followed by Axis Bank post ICICI. So, these two remain the top bets on the private sector banks and as I said that beta could be more in PSU rather than private.
We had seen that liquor trade as well sort of play out. Is it sort of missed the bus when it comes to looking at some of these stocks or is there still an opportunity?
If you look at it, it is more of an entire consumption basket. Those stocks have not done well in last two years or so and we have seen this momentum in last 10-12 sessions that most of the stocks are up 10% to 15% depending upon it from FMCG to consumers or we call it the whole basket as well.
So, my view is it will continue. We have not missed out. Most of the commentary if we hear from the fourth quarter results, one thing is visible, there is a volume recovery in most of the cases. One should still select FMCG names plus the liquor names in their portfolio.
What are your thoughts on the approaching Ola Electric IPO and the way in the run-up to that, a lot of legacy two-wheeler companies have already made some 40-50% kind of up move. Would you be looking at Ola Electric for your clients or better to play an embedded play in some of the existing two-wheeler companies?
The most important thing is that I would stick to the old plays like Bajaj and Hero and Eichers of the world. They have done quite well in last six months, if you look at it average 25% to 30% in most of them and I still feel there is lot of room in that space and as we are seeing that the entire wage growth scenario is improving and also the activity in the overall economic growth, so my sense is there is lots to be made on this two-wheeler space.
So, I would stick to the old stocks and obviously we will consider at the time of IPO about Ola as well.
Where within cement are you scouting for opportunities or would you say still a good time to perhaps add on to the current positions?
I feel that still banks, PSU banks as I mentioned that is one space, then even in the case of select housing finance companies, we have seen the real estate as the best of the year last two years what we have seen and most of them have guided for 20% to 25% growth and it is not one but across the board.
So, now the play on quasi real estate play will be the best. The housing finance companies still are available at a decent valuation. So, the risk versus reward again will be very favourable in the housing finance companies starting from PNB Housing followed by maybe Repco and maybe Chola.
Though my question was on cement, wanted to know where is it within cement are you finding opportunities if at all because suddenly we are seeing that buoyancy as well kick in in the stocks?
In cement space as well if we look at it last three-four session there are rumours that there could be a price hike and we have seen cement stocks moving upwards. So, obviously I would still prefer the largecap names and to play again to participate in the largecap names.
I would play an UltraTech, I would buy UltraTech still at this level and we have seen the infrastructure activity to remain continuing in the Modi 3 government as well.
So, we will see a decent action in the cement stocks as well. So, UltraTech remains the top bets. We could see another 15-20% from here. I felt the best way to play UltraTech is to buy Grasim, I think the holding company, there could be more upside into it, so trading still at a discount to what the overall value is and second obviously in a midcap space something like JK Lakshmi looks interesting in a cement play.
