Do you think the market will correct further or the uptrend will continue?
At first, you were concerned that bond yields at 1.74 would be very bad. Now 1.3 looks bad because there is no growth. So let the people who have to decide see it. There are episodes of reserving profits. The dollar has strengthened, but commodities are in a very favorable situation.
The decline in bond yields globally is a very good sign for India and emerging markets. This means that the cash flow is definitely back. For us, the inflation surplus is shrinking and the banks are very constructive. The growth dynamic is there. Look at the Bajaj Twins numbers – their growth and their assets under management. Watch HDFC Bank’s commentary. Tata Steel is at its highest for 10 years. India is therefore in a very sweet place.
I can hit the table and say this month, maybe after the 17th, you will see a new high in the index. The real beauty has been the midcaps. They have outperformed the largecaps by several miles and will continue to do so. Business India is therefore in an ideal position. Global volatility is a bit of a swing, but now is the time. Look for refusals to buy. Maybe another 50-100 points (correction) and we’ll be done. I envision 16,000 by mid-July or the second half of July.
Give us your preference in large and mid caps
Book profits across the board in IT mid caps and step into mid cap banks like Bandhan Bank, RBL, and IDFC First Bank. These actions offer you a very good opportunity. Look at the HDFC bank. He underperformed. HDFC Bank has resolved all of its credit card issues. It returns to the dynamic of growth. The cost of funds is minimum. So (go for) HDFC Bank among the large caps.
I am very optimistic about Vedanta. I think they turned the cycle around. I’m very bullish on Reliance at these prices, given that the Saudi Aramco tie-up is a very big game in the long run. They cash it. Reliance thinks 30 years in advance. The short-term aberration is due to the assumption of debt. It’s just a slight overhang.
There is a lot of uncertainty about automobiles because of a comment from Tata Motors. Why don’t you read the fine print? They say the demand is the highest they have seen in the history of the company. It’s just a question of a quarter. Japan or someone else will start supplying semiconductors. But locally Maruti and Hero MotoCorp are in a very sweet place. July promises to be the best month for automobiles. Here I can also name a mid-cap NBFC that has one of the strongest presences in the CV cycle – Cholamandalam Finance. The levels of Rs 515-518 are buy levels.
What kind of businesses do you like in the real estate business?
Godrej Properties and DLF are two of the main holdings in our portfolios. I am extremely optimistic about them. You cannot have gold at Rs 50,000 and equity (Sensex) at 53,000. Land prices will skyrocket over the next three years. The overhead inventory of a large number of wrong builders is complete. The big ones get bigger. Godrej Property and DLF will therefore earn money in the next three years.
Have you noticed the mega cabinet shuffle? Does it have a direct or indirect impact on the market? A handful of rail stocks are winning smart because the new man is praised by the market.
No, I put all my money into Indian companies. The way we have weathered the storm with our corporate and social capabilities, well done Indian companies. Zomato is the most popular after the IPO. Look at the elders – the Birlas, Tatas, and Reliance – they all contributed. So I am not looking at anything on the political side. If Apple and Amazon cost $ 1.85 trillion, beware there will be 10 more Indian $ 100 billion companies in the next year and I’m putting my money in there.