4 stock ideas whose time may have come: Sanjiv Bhasin, IIFL Sec
I would be relatively bullish after the budget and the other combined twin event of the election which could spur a lot of growth on the rural side, where again autos would be the indirect beneficiary.?
Sanjiv Bhasin,?Executive VP-Markets & Corporate Affairs,?IIFL Securities,?tells ET Now that one should look at?Bharti Airtel, Bharat Forge, Ujjivan and IDFC Bank First now.
Edited excerpts:
The extraordinary volume growth reported by FMCG companies have been surprising. If FMCG companies are reporting such strong set of numbers, why are auto companies suffering?
It is just a one-month or a two-month hiatus since there was this talk of GST deadlocks and secondly, there was some problem with insurance premium and so on. But it is something which had a huge base effect and that is causing the slowdown.?
However, like you rightly pointed out, the consumer sector is driving growth and yesterday for the first time in almost one year, ITC showed a 10% growth on cigarette volumes. So, yes volumes are back and it is just a matter of time before auto is be up and running.?
Yesterday TVS Motors results were way ahead of the Street. The pessimism is overdone. If you are a slightly longer term investor and are looking for good bargains, then you are getting a whole hog of those in the autos. I would be relatively bullish after the budget and the other combined twin event of the election which could spur a lot of growth on the rural side, where again autos would be the indirect beneficiary.?
What are some of your top bets? We know you are big on paints.
Yes, we have been very bullish on Asian Paints all the way from Rs 1,150 and we think that this is a unique stock where the market share decorative painting is getting stronger. They have indicated that the best effect of the price rise will also be met within this quarter.?
We have been bullish on Reliance, Asian Paints, Axis Bank and also a midcap called Mindtree at around Rs 800 level. It has seen a lot of interest given that L&T Tech is now trying to buy a stake. A whole host of stocks have done well. One of my top picks is ITC and I can reiterate that yesterday?€™s fall should be a buying opportunity. The cigarette volumes have pleasantly surprised on the upside and once we get a price hike, other businesses which are doing exceeding exceeding well will add up. So ITC becomes a star for 2019.?
When old timers real performers start selling out some of the core holdings in and around quality names, one wonders why. Is this redemption or this is an indication that they are looking at changing their portfolio orientation?
I cannot speak for the fund but definitely some churning may be on the cards. It could be some sort of lightening of positioning ahead of valuations and so on. I cannot comment on certain stocks because they are under our institutional coverage.?
Look at Airtel, Sunil Bharti Mittal says the worst of pricing maybe over, it is time for prices to come back. They are divesting a lot of their assets to improve return on equity. Look at Bharat Forge which is now a global player and where again you have seen valuation weaken because of the North American crisis. Look at Ujjivan where again you have seen very strong NIMs and asset quality improvement. Look at IDFC Bank First, again a marquee idea, where Vaidyanathan is going to lead from the front.?
So, there is a whole host of sectors where blue chips or midcaps can emerge as huge wealth creators and that could be the churn which is going on. We know that impact cost in some of the marquee names have a huge effect on entry and exit and hence the market will be looking at some of the weakness getting prolonged.?
We are relatively very bullish on some of these ideas. Davos has told us that a couple of large entrepreneurs are seeing extreme bullish signs in the near future.?
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