What is the market expecting from the RBI policy, a status quo and I guess a revision in the inflation target upwards?
Yes, I think rate hike expectations are not there. So we do not expect RBI to do a rate hike. But I think inflation has been sort of inching upwards and slightly above what RBI would have been anticipating. We have already seen crude rallying to about $87 and then you have pulses prices and some other agri input prices are going up. So obviously, inflation outlook could get revised and it is possible that the RBI might maintain some bit of a hawkish stance. But I think nothing major changes we would expect overall. I think rate cut, again expectations have been also sort of pushed beyond because we do not expect the US Fed to sort of cut rates because that will sort of put pressure on the currency. So overall, no major changes expected, except for some bit of a hawkish stance. But I think interest rate sensitive segments would witness some volatility today, largely because of that. But our overall market outlook remains intact. So our sense is that earnings will continue to grow at 15%-16% odd the next two years, which is why we are maintaining a Nifty target of 21500.
Let us get in an outlook as to what your expectation is from Hero MotoCorp all set to deliver its numbers later today. Do you think that we are likely to see margins in check this time around due to the higher input costs? And what is the commentary that you think the street would want to hear?
I think typically to two-wheeler as a space, we have not been liking so much. I think overall, the bookings for the newly launched Harley Davidson product has been better. But I think two-wheeler overall we are still getting on and off.
So we had seen Hero MotoCorp delivering 5 lakh excess volumes. But in some months or recent months, it has again come down. So even the rural recovery is not so even, which is why we have not been liking this space for quite some time except for Eicher where I think the volume has been largely intact, largely because of the premiumisation.
So very muted expectation from Hero MotoCorp and I do not think we are going to sort of change the stock going forward as well.
I am wondering how you are absorbing the news of Max Financial, the fact that Axis Bank is looking to up stake an infusion of 1600 crores thereabouts. The market, of course, was talking about it. So a large part of overhang in that sense is behind us. And then their VNB margins also which have expanded to about 22.2. Having said that, is this the most preferred in the insurance sector as a player, is it continue to be an SBI Life or an HDFC Life, which find favour?
I think most of your insurance companies have sort of done decent price performance. And at this point in time, we are still not chasing most of them. I think it is better to sort of play banking, which again would have pieces of various businesses, be it AMC or be it life insurance. I think only life insurance overall the growth has been sort of coming better. At 963, the current market price what is your take on Bharat Forge?
I think when we look at the numbers, the numbers are obviously good. And we are seeing industrial as well as the defence segment has started to contribute.
And along with that, the European subsidiary is also sort of doing well and with a stable outlook. When we look at even the tier 2 names, say something like Ramakrishna Forging, I think the outlook especially in global market is turning very positive.
So our sense is that overall forging as a space looks attractive to us. Valuations are definitely rich. But I think we are yet to sort of figure out in terms of what target prices will give. But we are positive on this stock overall, given the fact that globally things are turning positive. At least that is what the commentary we are picking up.