bull run: We could see the biggest bull run for next five years; stay invested: Varun Saboo

Varun Saboo, Head Equities, Anand Rathi Shares, says this is a great scenario when a government comes in for two-three straight terms. It leads to continuity. We have seen a huge infra buildup in the country in the last four-five years, be it digital infra, be it physical infra, everything and that is what is resulting in how things are turning out to be in terms of how companies are doing, in terms of how the stock markets are doing, equities are doing, etc. I believe that the run has just started. This could be the biggest bull run that we all are going to witness for the next five years and a very good time to stay invested.”Let us talk about sectors because power has been the story on Thursday, not just the financiers but also Tata Power which has zoomed double digits. I do not recall the last time Tata Power was up so much in a single day. Do you think there is still value on the table for any of the power or its ancillaries?
There are two-three things to it. One, we have seen years of consolidation in the space, particularly Tata Power as a stock has been there for a while. There has been so much deficit of power that we keep talking about. We have been talking about the power demand to grow in the country at a stupendous rate and we are extremely short of power right now in the country. This is a multi-year story. Stocks have just started reacting. There can be a very sharp run from here also.

Unlock Leadership Excellence with a Range of CXO Courses

Offering College Course Website
Indian School of Business ISB Chief Digital Officer Visit
IIM Lucknow IIML Chief Executive Officer Programme Visit
IIM Lucknow IIML Chief Operations Officer Programme Visit

Although we do not have any formal coverage, I am again highlighting that this space itself is becoming very attractive. So, yes, the power story can be interesting. As regards the overall market and what we are focussing on, with the recent election results which came, there is a sense of continuity in the governance in the country. There is a higher certainty which is building in where we are expecting now that continuity should remain with how the results have been.

So, this is a great scenario when a government comes in for two-three straight terms. It leads to continuity. It leads to a lot of things changing. For example, we have seen a huge infra buildup in the country in the last four-five years, be it digital infra, be it physical infra, everything and that is what is resulting in how things are turning out to be in terms of how companies are doing, in terms of how the stock markets are doing, equities are doing, etc.

I believe that the run has just started. This could be the biggest bull run that we all are going to witness for the next five years and a very good time to stay invested, invest more. It is also getting supported with the fact that FIIs have been heavy sellers in the market. For the last two-three years, we saw them selling roughly about Rs 4 lakh crore worth of equity. While on the other hand, we have seen domestics growing consistently.

We are now seeing SIP inflows in mutual funds being Rs 15,000 crore monthly and other investment horizons like insurance, etc, are also seeing a lot of inflows. AIFs are growing. So, liquidity support is there for the market. The economy is doing exceptionally well and looking very promising from the next five-year perspective.

There is no other choice for FIIs but to come back and pour in their liquidity as well because in terms of their performance, there will be a significant dent because in terms of country exposure they are quite low on India and that will definitely result in them coming back stronger.We are in a very good shape and markets should do very well with a slightly longer perspective.

The other theme in the market and a large umbrella at that has also been PSUs, right? Do you still have conviction in this theme or do you think 2024, it could get a little bit risky purely because of the impending elections?
Honestly, I would still be very positive on PSUs. One thing we have to realize is that this has been the best time PSUs are having in a long, long time. But they have still been very reasonable in terms of valuations. So there was a long catch up due in them which has been the case. Second, as I mentioned earlier, when there is continuity in the government, a continuity in policies, things will flow down. For example, when we come to the defence stocks, the narrative still continues. We are going to see the same thing that we have been seeing, the kind of ordering which was there, which might continue going forward. There is a particular narrative this government has been running. That ideally will continue, is what one has to understand.

So all these PSUs will be the ones through which these narratives are fulfilled. So as a business per se, they will do very well. And they all are still quite reasonable in terms of valuation. So I think PSUs should be there in the portfolio and there can still be a good enough compounding you can see over a period of time in them.

What is your take on Paytm and this entire unsecured lending business and RBI raising red flag? Is there more that we should expect in terms of the second rung and third rung impact of it as well because initially, everybody came out with an explanation, we are not impacted. But now slowly and steadily, we are seeing that reality on ground.
We do not have a formal coverage of it. But just to mention, recently, management has mentioned that they will be moving on the higher ticket size lending going forward. So, is the impact of the lower ticket size there in the price? I think to quite an extent, it is because roughly about 40-50% of their overall disbursements were coming from the lower than Rs 50,000 book. If we have to consider the kind of fall the stock has seen, it is covering up quite a lot for that impact.

From here, downside should be limited. We will have to see on the thing which they have mentioned that they will be growing more on the larger ticket size loans now, how that pans out. So that will give you a better visibility but yes, the stock has taken a lot of beating.

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Secular Times is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – seculartimes.com. The content will be deleted within 24 hours.

Leave a Comment