We are seeing the return of the blue chips and largecaps and the momentum moving away from the smallcaps and midcaps. What was an aberration in the last couple of sessions, is it a decisive trend now?
We have seen a rally in the midcap stocks in the last couple of months and a lot of stocks have doubled in the last two to three months. The rally was very fast and it was expected that at some point of time, they might take a breather. What we are seeing right now is the breather by the midcap stocks. Be it the IPO market or be it the earning season with it, investors’ focus is back into the large cap stocks. Last week, we saw financials getting back in lead and that is the main reason for markets’ focus coming back to the large caps, rather than the midcaps.
What are you making of the entire reopen trade counter? IHCL delivered its numbers yesterday. How are you viewing the entire space — retail, multiplexes, hospitality and aviation?
The stocks have already rallied in anticipation of the opening of trade. In the case of aviation, IndiGo and Indian Hotels in hospitality or even some of the retail plays have already rallied. I would still bank on the broader picture. The valuation levels of a few stocks are still comfortable. My sense is there are lots of other opportunities. The view for the next couple of years for these stocks for the opening of trades is there and one should look into it. In the short term, they have rallied quite a bit. There are other opportunities which look more interesting to me and which are reasonably priced as well compared to this space. So I would bet on those stocks rather than betting on the opening of the trades at current levels.
What is your expectation from Lupin given its recent performance? How have the other pharmaceutical companies done? The performance of and Dr Reddy’s Laboratories is diametrically opposite?
Except for Sun Pharma, the numbers were quite robust and estimates were beat on all fronts for most of the companies. We need to look at Lupin’s numbers plus the management commentary. What the management gives is more important in terms of Lupin.
How are you viewing the entire telecom space with almost a duopoly in sight?
Two large players are now emerging — Airtel and Jio. We have seen the performance of Airtel in the last few sessions. My view is both Jio as well as Airtel are going to benefit. But the important thing going forward is if Vodafone comes back with some other investor, then we might see some kind of selloff in the stocks. It looks unlikely in the near term but definitely from a longer-term perspective in such a high capital intensive industry, the clear winners are obviously the big boys who were able to raise funds for expansion as well as the 5G.
Reliance has been sluggish. Everyone is waiting for that next big trigger. One acquisition was announced today as far as energy storage goes. There is speculation that it is going to look at T-Mobile in Netherlands. What are you waiting for when it comes to RIL?
has been in focus in the last few sessions and in my view, is the best play. I am talking from the perspective of Jio, retail and the newly launched clean energy business. Going forward, one should look at in terms of the largecap space and especially the heavyweights as it is available at a reasonable valuation and there could be 20-25% upside from the current levels. The downside is very restricted.
One should look at it as an investment portfolio stock rather than waiting for short term triggers for the stock.
What are you reading into Zomato’s numbers?
After the fantastic listing, the stock has rallied higher. I would not advise to look into it with a near term or short term view. If one has a three, four years’ investing perspective, look into it but near term, I don’t think any money can be made in this company now. I would rather avoid it and say there are a lot of other opportunities available in the markets.
