What is it that you are making of the announcements coming in from the Shriram Group now that they have said categorically that the group is not going to be individual or family run but more professional, Should that go down well with the market?
Yes. If one looks at the kind of relationship that they were trying to build with the Piramal Group a few years back and some of the investment which Piramal made in some of the group companies, there was a feeling and in the absence of a possible successor to Mr Thyagarajan that this was always par for the course and in that sense, it is good that they have come out and set the record straight in terms of what the plan is going to be. This is a positive because it removes the uncertainties.
We have already fallen about 8% to 9% odd from the October highs. But one does not really know how the Omicron variant is going to pan out and whether global markets will fall further from here. Does it seem like the end of the correction is near and can one begin to buy?
While it is always difficult to call the markets, it looks like a bull market correction. We have had a virtual one-way market since the last one and a half years. Traditional bull markets have between 10% and 15% sort of corrections from time to time. Further, in the last few months or weeks, the market breadth by and large has actually been negative. Our own interim study shows that 75-80% stocks of the CNX 500 index trade anywhere from 10% and below their 52-week highs.
So the market breadth has been taking a negative turn and it has just been a few stocks which have been holding the market up. We are in the midst of such a correction. A bull market correction could be anywhere between 10% and 15%. We have already seen almost 60% of that happen. So there could be a little bit more correction from here but one should selectively look to dip into the markets and gradually invest into them.
What would be your approach for RIL?
Generally we do not talk stock specific but the bellwether is probably exhibiting strength and in terms of upside I am not sure in the short term but it will probably consolidate.
