February 2024

In a recent interview with ET Now, Aveek Mitra, the founder and chief advisor of Aveksat Financial Advisory, insights were shared regarding Public Sector Undertaking (PSU) bank stocks, Oil Marketing Companies (OMCs), and the power sector.

PSU Stocks Analysis:

Mitra addressed the elevated valuations of some PSU stocks, acknowledging that his firm missed the rally. Despite this, he highlighted the potential in certain PSUs, particularly those in the defense sector. Mitra noted that while his firm has not invested in PSU stocks, they recognize the value potential, especially with the government’s focus on defense. He also mentioned the launch of a PSU fund by Quant, indicating a growing interest in this sector.

View on OMCs and the Power Sector:

Discussing the energy sector, Aveek Mitra expressed optimism about renewables, LNG, and PNG (Piped Natural Gas). He emphasized the potential in companies indirectly involved in these sectors, such as suppliers of smart metering or turbines for wind projects. Mitra praised the Indian government’s commitment to renewable energy, highlighting it as a long-term investment opportunity.

PSU Banks vs. Private Banks:

Aveek Mitra shared insights into the banking sector, highlighting challenges in garnering deposits at a reasonable cost. While credit growth is robust, deposit growth lags, leading to intensified competition among banks. Mitra expressed confidence in PSU banks, citing improvements in their balance sheets over the past decade and the stability provided by continuity in leadership.

Also Read:

• Shankar Sharma’s Insights on Small Caps
• BNP Paribas Highlights Financial Sector Priorities
• Investment Opportunities with Dinshaw Irani

Investment Strategy and Portfolio Updates of Aveek Mitra:

Regarding investment strategy, Mitra revealed recent additions to his portfolio, including companies in the footwear and real estate sectors. He mentioned investing in a Mumbai-based real estate company poised for growth. Mitra affirmed his firm’s commitment to riding trends in the market, indicating no trimming of positions despite market fluctuations.

Conclusion:

In conclusion, Aveek Mitra’s insights provide valuable perspectives on the future of PSU bank stocks, OMCs, and the power sector. His analysis underscores the importance of monitoring market trends and identifying opportunities for long-term growth. As investors navigate through uncertain times, Mitra’s approach of identifying emerging sectors and prudent investment decisions serves as a guiding principle for sustainable wealth creation.

In a recent discussion on CNBC-TV18, Abhiram Eleswarapu, Head of India Equity at BNP Paribas India, underscored the evolving landscape of the financial sector, focusing on the continued growth trajectory and the normalization of credit costs. Here’s a breakdown of the key points from the conversation:

Consumer Sector Dynamics: BNP Paribas’s Approach

Eleswarapu noted that while some consumer companies have reported positive surprises in their earnings, valuations remain a secondary consideration. The overarching narrative revolves around companies demonstrating robust growth, forming an exclusive club amid a somewhat disappointing season for the consumer sector.

Affluent India Theme:

The “Affluent India” theme, which originally encompassed consumer-oriented sectors like automobiles and jewelry, has expanded to include financial products such as insurance. This broadening of the theme reflects evolving consumer preferences and spending habits.

Tech Inclusions:

Eleswarapu highlighted the increasing presence of consumer-oriented tech companies within the “Affluent India” basket. This trend aligns with the proliferation of new IPOs across various sectors, ranging from financials to online-oriented businesses.

Also Read:

• Investment Opportunities with Dinshaw Irani
• Mahantesh Sabarad’s Market Insights
• Aveek Mitra’s Insights

Financial Sector Outlook: BNP Paribas’s Views

Regarding the financial sector, Eleswarapu acknowledged the diminishing concerns surrounding margin pressures, particularly at the Net Interest Margin (NIM) level. Instead, investors are closely monitoring the continued growth momentum and the potential normalization of credit costs.

Valuation and Investment Opportunities:

Despite the recent volatility, Eleswarapu sees favorable valuations across the financial sector, particularly among large-cap private banks. He believes that these banks offer significant value, with the disparity in fundamentals between performing and non-performing banks narrower than perceived.

BNP Paribas On Non-Bank Financials and Insurance:

Eleswarapu expressed continued optimism towards non-bank financials, citing strong demand for credit and minimal issues concerning credit quality. Additionally, he highlighted the insurance sector as a long-term investment theme, particularly in the context of the evolving “Affluent India” narrative.

Capex Theme and Power Sector:

While acknowledging the upward trajectory of stocks within the capex theme, Eleswarapu expressed caution regarding the sustainability of gains. He identified the power and transmission sectors as areas with potential for further growth, driven by government initiatives and private investments.

Conclusion:

In conclusion, Abhiram Eleswarapu of BNP Paribas insights underscore the importance of sustained growth and stability within the financial sector. Amid ongoing market fluctuations, investors are advised to focus on companies demonstrating resilience and favorable valuations, while also exploring emerging themes such as “Affluent India” and select segments within the capex space.

By prioritizing growth and stability, investors can navigate the evolving financial landscape with confidence, leveraging opportunities for long-term value creation.

In a recent episode of Beat The Street on ET Now, Dinshaw Irani, Chief Investment Officer at Helios Mutual Fund, shared valuable insights into the investment landscape, particularly focusing on service-agnostic defence plays and the nuances of consumer stock performance. Let’s delve into the key takeaways from the discussion.

Consumer Stocks:

A Tale of Two Segments Irani elucidated the dichotomy within consumer stocks, differentiating between FMCG and discretionary segments. While the discretionary segment, with its health-oriented and rural-heavy portfolio, shows resilience, pure FMCG stocks face challenges amidst rural market downturns and urban slowdowns. He emphasized the importance of discernment in navigating these segments, highlighting the caution warranted amid current market dynamics and liquidity constraints.

Also Read:

• BNP Paribas Highlights Financial Sector Priorities
• Mahantesh Sabarad’s Market Insights
• Nuvama Capital’s Insights

PSU 2.0:

The Evolving Dynamics of PSU Stocks Reflecting on the performance of PSU stocks, particularly within the defence and railway space, Irani noted a significant transformation under the present government’s proactive stance towards PSU companies. Rebranded as PSU 2.0, these entities are witnessing renewed government support, transitioning towards market-driven strategies focused on enhancing market capitalization. Irani identified defence as a structural growth story, advocating for investment in service-agnostic defence companies poised for sustained growth.

Navigating the IPO Market:

Exercise Caution Discussing the IPO market, Dinshaw Irani urged investors to exercise prudence amidst the flurry of new offerings. While acknowledging the excitement surrounding IPOs, he emphasized the need for selective investment, cautioning against indiscriminate buying. Irani stressed the importance of thorough analysis to identify promising IPOs with long-term potential, rather than succumbing to short-term market euphoria.

Dinshaw Irani’s Portfolio Strategy:

A Balanced Approach Irani shared insights into portfolio management, emphasizing the importance of maintaining a balanced mix of investments. Despite challenges in certain sectors like finance, he highlighted the resilience of diversified portfolios in delivering consistent performance. Dinshaw Irani reiterated the significance of adapting to market dynamics and capitalizing on emerging opportunities across different sectors.

RBI’s Policy Outlook:

A Key Factor Commenting on the RBI’s policy stance, Dinshaw Irani expressed confidence in the central bank’s proactive approach to managing inflation and exchange rates. He viewed RBI’s policies as conducive to market stability, particularly in attracting foreign investments. Irani anticipated potential liquidity easing post-elections, further bolstering market sentiment and stimulating economic growth.

Consumer Consumption:

The Road Ahead Irani concluded by discussing the outlook for consumer consumption, emphasizing the need for both rural and urban sectors to drive growth. With uncertainties prevailing in the domestic FMCG space, Irani suggested adopting a cautious approach and monitoring market trends before making investment decisions.

In summary, Dinshaw Irani’s insights shed light on the evolving investment landscape, highlighting opportunities in defence stocks, the importance of discernment in IPO investments, and the significance of balanced portfolio management amidst market uncertainties. As investors navigate through dynamic market conditions, Irani’s perspectives offer valuable guidance for informed decision-making in the ever-changing investment landscape.

In a recent interview with ET Now featuring Mahantesh Sabarad, an Independent Market Expert, various market trends and stock analyses were discussed, providing valuable insights for investors. This article aims to delve into the key points raised in the video, focusing on Paytm stocks, PSU banks, Q3 earnings, and other market trends.

Mahantesh Sabarad’s Market Overview:

The discussion commenced with an assessment of the current market scenario. Sabarad acknowledged a recent dip in the overall market but highlighted the resilience of certain sectors, specifically Oil Marketing Companies (OMCs) and Public Sector Undertaking (PSU) Banks.

Also Read: Investment Opportunities with Dinshaw Irani

OMCs vs. PSU Banks:

Mahantesh Sabarad expressed a preference for PSU Banks over OMCs, citing concerns about OMCs being highly cyclical and susceptible to global oil price fluctuations. In contrast, PSU Banks were deemed more favorable due to their solid positioning in the corporate sector, poised for potential interest rate reductions.

PSU Banks’ Strengths:

The analyst identified multiple strengths within the PSU banking space, including robust capitalization, quality book perspectives, healthy Net Interest Margins (NIMs), and a positive outlook for corporate capex. These factors, coupled with an anticipation of further interest rate reductions, positioned PSU Banks favorably in Sabarad’s analysis.

Stock-Specific Insights:

The discussion shifted to specific stocks and their recent performances. Engineers India was highlighted for its positive earnings report, with Mahantesh Sabarad suggesting a “hold” stance on the stock due to its recent upward movement.

Swan Energy and Tata Motors:

Technical analyst Kunal provided insights into Swan Energy, citing strong volume-based upward momentum but cautioning about potential corrections in the coming weeks. Meanwhile, Tata Motors was discussed as a promising buy, with expectations of a substantial upside in the next few quarters.

SBI’s Q3 Earnings Preview:

The discussion touched upon the upcoming quarterly earnings report of the State Bank of India (SBI). Key expectations included a 6% growth in net interest income, a 22% decline in pre-provision operating profit due to wage rate revisions, and a positive outlook for healthy asset quality.

Tata Motors’ Q3 Expectations:

Anticipating Tata Motors’ earnings, the discussion highlighted expectations of a 23% quarter-on-quarter increase in profits. Attention was drawn to the key driver of Jaguar Land Rover’s (JLR) EBIT margin improvement and the company’s overall volume push.

Paytm Stock Analysis:

The discussion veered towards Paytm, acknowledging its recent significant decline. Mahantesh Sabarad expressed skepticism about potential recovery, citing regulatory uncertainties and the need for strategic decisions such as segregating the payment bank business to mitigate risks.

Conclusion:

In conclusion, the article provides a comprehensive overview of the key insights from Mahantesh Sabarad’s analysis, shedding light on market trends, specific stock performances, and expectations for upcoming earnings reports. Investors are encouraged to consider these insights when navigating the dynamic landscape of the financial markets.

Disclaimer: The investment recommendations discussed in this article are based on Mahantesh Sabarad’s insights, and readers are encouraged to conduct their due diligence before making any investment decisions.