It appears that HNIs like Rakesh Jhunjhunwala, Madhu Kela and many others are catching Canara Bank and others, participating in their QIP. Also there was the recent meeting of PSU chiefs with the FM. What is your take on PSU banks?
Nifty’s at a new high. The midcaps got decimated in the last two or three weeks and that had more to do with fund balancing. They inherently now like some of the PSU banks. A disclosure, SBI, Bank of Baroda and Can Bank are three of our top picks. We think a rerating is imminent. The cost of money is the lowest ever. There is a Rs 6 lakh crore monetisation plan for road assets and infrastructure. All the funding for corporates will come from banks and PSUs are at the forefront of it. So I think this is the best time to be in PSUs, banks and real estate. They will be real wealth creators over the next two years.
However, in the short run, because of global volatility, people are focussing more on largecaps but that is a part of the market dynamics. I am extremely bullish on the midcap space and particularly some of the PSU stocks.
Midcaps and smallcaps got decimated. They were melting for two weeks but just before the rebound, the last two-three days were very painful. Is the pain over in this segment? Are HNIs done with their margin calls? Should one start nibbling again?
This is the time to put your money where your mouth is. Tomorrow is the expiry. The leverage position on options will be over and the reversal in September will see midcaps actually outperform. I am extremely bullish and contrarian on autos and midcap banks. You cannot go wrong. You cannot have Sensex at 56,000 and real estate where it is. Godrej Property, , , Hero Motor, Apollo Tyre will outperform.
It is an opportunity. For some, the pain is there but I would say just live with it for another few days. The movement in the first week of September will be dynamic and I am very bullish. A disclosure, Godrej, DLF are all in our key portfolios. We think the upside in real estate is going to be unparalleled. Mumbai is fully open, Herd immunity is huge in Delhi. The type of cars I am seeing, I have not seen in pre-Covid days, So, real estate, metals, midcap banks and autos are where you should be putting your money. Now that could include a basket of large cap, midcap both.
