Looking at the price action today, does it seem like the worst is behind us or would you say that although the market is in a corrective mode, the bull market may be intact?
Definitely the bull market is intact. There are certain concerns as far as the valuation and the market levels in India are concerned and sometime after a massive rally — Nifty went up by 1,000 points in about 10 trading sessions — a bit of consolidation and profit taking is par for the course and it did happen. It is good for the health of the market but to say that we are entering a correction phase and are in a negative territory would not be correct. We still continue to have a positive bias as far as the markets are concerned.
What do you make of IRCTC?
I believe IRCTC is a good company. They are in good business. The unlock trade should give them a significant leg up from here also. But as far as the share price is concerned, I am not very comfortable. Yes it got corrected significantly and started moving up once again but I would not recommend a buy in IRCTC at this stage. Another 20% correction and post that we can look at it, not at this stage.
Why did accelerate on Tuesday?
Tata Motors has multiple levers working for it. The EV strategy and investment from the JV fund into the EV has given it a new lease of life. There was a feeling amongst the analysts and the market that probably they will be left behind in the entire EV race but are really looking promising now with a lot of global players coming in. Tata Motors is very clearly showing its intention in the EV space.
Things have started looking up and Tata Motors has started getting rerated. I am not saying their other business is not doing well or would not do well but EV is the one which the markets will be very closely monitoring. So yes, at current levels, there is excitement and it has moved up quite a bit already. If you are a long-term investor, if you are looking at a one-year plus time horizon, you can enter Tata Motors even at current levels.
A few days ago you said you would not buy anything in this market but with the corrections that have taken place, what are you looking at now?
I have been positive on the BFSI sector for some time. As far as BFSI is concerned, there is value sitting in the PSU banking space and one needs to be a little patient there. There may not be an overnight significant gain but if one has a little risk appetite and is willing to be patient at least and keep one year time horizon, one should buy PNB or a Bank of Baroda.
I am confident that at about 20% price appreciation from the current levels is on the cards. Asset quality is improving, performance is improving, loan growth is robust, the process of realisation from bad assets also is getting expedited. So overall, it is going to be a positive momentum there.
Apart from the PSU banking pack, one needs to look at the NBFC space once again. Yes, private banks have already moved up. They have run up quite a bit and probably there is still more excitement left in an Axis and ICICI Bank or even an SBI, but the BFSI space also includes NBFCs and the NBFC space is very wide with different types of companies doing different things. The
Gold loan companies is one area which I would like to highlight and Mannapuram in particular looks very attractive value wise at the current levels. One can also look at some of the small private sector banks. Again, we believe there is value in a Federal Bank or South Indian Bank or even a City Union Bank. These can be looked at at current levels. Yes, they may not give you overnight returns, but if you are a bit patient with a three to six months time horizon, you should make money.
