Do you think the best of the move in the metals pack is behind us and we may not see too much of gains in Tata Steel or Vedanta or Hindalco for the rest of the year?
I don’t think that prices of commodities will run away too much from here. There might be some gains here and there because of strong prices in US and Europe markets. The companies will do better and their results for the next two quarters are going to be strong. I think there is no point in buying these stocks now. If you have them in your portfolio, do not be in a hurry to get out. Hold on to your metal positions for the moment.
If you have to choose between SBI and HDFC Bank for the next two years, what would you buy?
My bias has been more towards retail investors. So I would prefer a long-term investment in HDFC Bank. In the next one year, corporate banks may outperform but over there my preference remains ICICI Bank.
Where do stand on the entire PSU theme? Would you still be wary of the disinvestment process or is it time to pick some of these names?
It is time to look at some of these PSUs but you have to be very selective. Oil PSUs are very cheap. All of them are available at 4.5-5 times earnings. One can look at them as an investment. There is no doubt that there is deep value in them. One should have most of these oil PSUs, especially the marketing companies, in their portfolios.
On divestment, there is lot of interest in Concor. I would put my bet on something like Concor or BEML. But I think BPCL will find a buyer. You have to very selective in picking the right stock.
Are you exploring anything within the energy pack?
There are two buckets within the whole landscape of energy that seem to be interesting at the moment. The first one is oil marketing companies. They are real value at this point of time. The second one which we have started exploring is renewable energy. This space also seems to be now doing pretty well and there are several companies which are spending more money. The Tata Powers of this world, which were largely into thermal power, are now expanding every incremental dollar into renewable energy. So that is another big space which is opening up. There are two or three of these companies which are listed – Adani Green and Tata Power. All of them are now focussing on green energy. So these are the two extreme spaces one is value, the other is growth.
