Would you concur that yesterday belonged to those that saw a big selloff, make a comeback. for example. That has been a trend that has been playing out.
Yes you are right. Some of the stocks which took a beating after not so good results are coming back but as far as the banking space is concerned, incrementally we are not seeing too much of stress coming now and most of the banks are provided for and the Covid related provisions are also being made.
Even the collection efficiency is improving for NBFCs and banks. The bad news which was expected to come as far as the banking space is concerned, financial space is concerned is behind us. One will get opportunities there because the market is not doing well or one of the results was not that great, like Canara Bank did not come out with a good set of numbers but we saw a bounce back in that stock later. So those kinds of opportunities should be used to accumulate positions in some of the financials.
The commentary said the worst is behind them and from Q3 we should start seeing normalisation. While the numbers were bad, Maruti has also been saying something similar. Is it the time to re-rate the auto pack? The festive season has been a washout for them.
Yes besides the passenger vehicles, even the commercial vehicles are seeing a pickup this quarter. Even the Shriram Transport management said that they are seeing good traction in medium and heavy commercial vehicles.
There is definitely a pick-up in demand because of the economy opening up and starting to picl up. We are expecting that inflation would make a dent on the demand but we are not seeing that. We saw good volume growth even in Dabur back to back for two quarters.
People were not looking at auto mostly because of the margin pressure because of the metal prices and raw material prices going up. Once demand really picks up, as interest rates are still low, they will be able to pass on some of those cost increases also. One should selectively look at autos though I am more bullish on the commercial vehicle space.
Did you buy gold on Dhanteras and did you buy physical gold or did you go for gold ETF, sovereign gold, digital gold?
No, actually I am already holding gold. It is bought at a much lower price so I do not feel like buying at the current price. I think equity after the correction that we have seen selectively can give a good return from these levels so I would prefer to stay with equity only.
There are very few stocks to play the telecom story. Vodafone Idea was very active yesterday.
The data requirement is sustaining and it is going up only and Bharti Airtel is one stock which is there in our portfolio and we feel one should stick to that. Vodafone Idea I am not too sure about because they had lost a lot of customers in the last few quarters and I do not know how they are going to grow from these levels though their immediate problems are not there now because of the moratorium that they have taken.
But still to grow from these levels and to come back to decent profits is a little far for them. Bharti would be one stock which is a direct play as far as that is concerned. Plus, there are other pockets. The government has to provide telecom lines and provide these connections even in far off towns and villages. So, there are other stocks which are doing that kind of work. It can be something like Tejas which is getting those contracts. Then there are stocks which are related plays like Sterlite Technologies. So one can look at ancillaries to the main telecom space.
What is your outlook on Titan?
Even though the results were exceptional, the current valuations do not justify an entry into a stock like Titan. It may be trading at a premium and it may keep on trading at a premium, but whenever we are investing, we are looking at value and that value I am not able to see in Titan right now. One should look for any opportunity which comes because of any correction to enter Titan but not at these levels. As far as jewellery is concerned, I am not a fan of any stock in the jewelry segment and this is something which we have been avoiding. I cannot comment on jewelry stocks.
