ICICI Bank has delivered a blockbuster performance on Monday; Kotak delivered a good report card on Tuesday and the stock market rewarded it. Finally the financials are catching up. We saw last month the Bank Nifty outperform the Nifty!
We saw the blockbuster numbers from ICICI Bank in all the businesses sequentially and most importantly, the asset quality has improved. Post ICICI Bank numbers, we have seen a rerating and buying in wholesale banks. Axis has been moving up the results. Similarly a good momentum is building at SBI. We are seeing this kind of re-rating in the wholesale bankers after a long time. The way we are seeing the revival happening in the economy, the biggest beneficiaries are all these wholesale bankers. My view is this should continue going forward from here onwards as well.
So SBI, ICICI Bank and Axis Bank — all three will lead the Bank Nifty. 40% of the weightage on the Nifty is financials and they have been massively underperforming in the last three-four months where the Nifty has been doing it. Now going forward, financials should take the front seat and they will keep on outperforming the Nifty going forward further.
After ICICI Bank’s blockbuster performance, what do you prefer now – ICICI or HDFC Bank?
ICICI right now from the current levels. Post numbers, ICICI has done well on all the fronts — be it corporate finance, retail segment, home finance or retail segment. They have shown growth and the provisions have been much lower and these kinds of numbers we are seeing after four-five years. So traction is coming back in ICICI Bank. ICICI Bank should be another 15% to 20% from here. It should outperform from here on also.
Elon Musk’s personal wealth has also soared $36 billion after a one lakh order of cars from Hertz. What is your pecking order when it comes to the auto sector?
Definitely there is a pent up demand and most of the auto companies are talking in terms of there being a waiting period for most of the segment. Coming back to
, specifically Maruti or any other listed players in terms of the entire auto play, my sense is the shift is towards the EV and the guys who are under the first mover advantage will obviously make benefits out of this.
Tata Motors stands apart from this and that is what we are seeing reflected in the price in spite of the disruption. The stock is up around 50% in a quarter. In auto pack, Tata Motors is definitely one of the stocks to look at and followed by a couple of auto ancillary names. I would also play on something like
for agri play. Escorts could be a better play from here onwards.
In auto ancillary play, we like , There could be a good amount of upside in the stock from here. It is trading at a very reasonable valuation at 25 times forward and after a long time this kind of valuation an MNC is available. One should invest in these two, three ideas in the auto pack.
