certain financial institution: yes, the bank is far from being a multibagger; having a bet on these 2 midcaps: Nischal Maheshwari
Due to lower crude prices, commodity buyers who may be dependent on oil also ended smartly. Is this business here to stay?
Yes I think so. Even the intake seems to be increasing and if inflation goes down we may see the costs go down and as other people have extra money the intake may even increase. So it can be a double certainty for them. I could continue to be invested in these stocks.
Is it time to forget the conservative fund managers who say the only way a stock buying and selling at a PE of more than one in 60-70 will transfer is downside?
There has been the same story for the past 10 years and none of the stocks have gotten cheaper. Ten years ago, Asian Paints was cited 25 or 26 times and lately 50 times. So none of those stocks got cheaper. We see an identical story in Pidilite and all the input names as they are highly resilient with very strong margins. We know the whole story of FMCG with the big money flows. That’s why I used to be so sure of
as a result of this, there was an inventory languishing 15 times. It is an extremely robust company and its cash flow has been equivalent to the following three or four FMCG companies. We are sure of the whole pack.
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I really like to draw your attention to the deal. Two huge private equity buyers with big capital came along and put their shoulders to the wheel. They wish to reorganize the control, they analyzed the guide and the agreement took place at a single value to guide. Could Yes Bank be a type of small allocation that is worth in everyone’s wallet for the next two or three years?
If you’re a true fan of multibaggers, you’ll give it a try. Many more graduations are still needed for Yes Bank to become a multibagger. My point of view on the banking sector remains that it is necessary to be within the large capitalization banks. There is no merit at the end of a mid-level or low-level financial institution. Basically, a large capitalization financial institution has been given a big pool of capital, a huge pool of skills and a large availability of capital once again, that it is needed for expansion and success. How can a small financial institution in any way examine or compete with ICICIs, HDFCs and SBIs of this world? So my vote goes to the large cap banks. I could be completely invested in large caps until they have a distinct segment currency capability, which I don’t think Yes has today.
Give me your favorite midcap stock record – two or 3 names you wouldn’t promote at any value, that you’d like to keep for 3 years?
I could opt for a few cyclics. We really like the whole sugar package and it’s because of the alternative in the energy outlook and the fact that the government says energy security is more important. Balrampur Chini has been our favorite choice available in the market and it is one of our best alternatives.
We love Cera in the building products business. They finished very well. They controlled to increase their margins well. It’s a great inventory that we need to keep and include.
The 3rd that I really like is Crompton Greaves. I believe that after this acquisition of Butterfly, now their portfolio is complete. They are leaders in the fan arena, they are also leaders in other arenas and with that butterfly it can be a great position. So those are the two or three best midcap alternatives that we like.
If the IT industry has 20% attrition because of this, the salary increases for that industry for those 12 months will be double digits. It’s a big pocket and it’s going to force the influx of vehicles, real estate, games, shoes, and concrete makers into at least one of the major vital metros. Are you buying my common sense?
I consider you, mainly the contribution is methods to move forward. I don’t see any downside. By the way, everyone is talking about inflation in the US going into recession. I was talking to one of the top fund managers next door and he gave me an exciting idea. He said of course we may go into a recession but it will be a recession on paper because we are at 9% inflation and our real price of enlargement will be whatever the inflation less interest rates. there and it can not be up to 6%.
The United States has not grown more than 6% in recent years. So while we’re talking recession, there is still a huge amount of widening – 5-6% -. Inflation has its personal worries or idiosyncrasies and because of that, we see this influx all over the world. I was in the US for 2 weeks and everywhere I could see huge amount of admissions, massive crowds. I don’t see any signs of a recession anywhere.