What is the tone and tonality at the retail level in the last couple of days? I mean, is leverage coming down? Is participation coming down? The two important short-term indicators are mood and momentum. The momentum is waning and the mood has become sour.
Pankaj Pandey: The mood keeps on changing depending on how things pan out. So, post Haryana Assembly election results, the mood definitely changed and now we have upcoming US elections and elections in Maharashtra. So, anxiety levels are higher. Our sense is that moods can change post the favourable outcome in some of these events.
But having said that, we do not see much of a fear in the market. Also, the fact that the corporate balance sheets are good gives us confidence that overall things have not been so edgy for a lot of investors and which is why our sense is that there is no major downtick in the overall sentiment of the market. It is just that the anxiety levels have gone up. One, the result season is definitely not helping, the other is there are elections around the corner in the US where again, there are fairly diametrically opposite taxation policies. Then there are elections in Maharashtra. So, all of it is keeping the anxiety levels high. But this will subside post these events.
Curious to get in your take on the fundraise that Zomato is mulling, the QIP route that they are looking at on 22nd of October? How are you reading into this?
Pankaj Pandey: Sorry, I do not cover the stock, and would not be able to give any views on it.
You do not cover Zomato. Why?
Pankaj Pandey: I have been saying this for a long period of time. We are a bit traditional in terms of our approach. So, for any company which is trading more than 10 times sales, it is very difficult to think about the future beyond that. Then, we need to be really constructive in terms of imagining a lot of things. We are really weak there. I think the only segment we like which is 10 times sales is something like CDMO, but there the margin profile is in the range of 35% to 40% and the Biosecure Act is definitely going to be a big tailwind for a segment like this. Otherwise, we are sort of conservative from a valuation perspective.
What is on your radar if markets fall 5%, and which you will buy more if the market falls 10%, add more if markets fall 15% and will double the addition If the markets fall 20%?
Pankaj Pandey: We have been very selective in giving recommendations largely because there is no follow-up, which is happening, so you have one day one certain category of stocks are up. So, largely, we have recommended an IT stock – Newgen Software – with a target price of Rs 1,465, the results were good and our sense is that the company will keep growing at 23-24 odd percent, both revenue and bottom line, over the next two-three years. So, one needs to be very selective because up till now, the results have really not been helping the market. Similarly, we are expecting hospitals to do well. We have been recommending Narayana Hrudayalaya because our sense is that they are doing a capex of Rs 3,000 plus crore, which is quite aggressive. It should provide some uptick to the number FY27 onwards. So, one needs to be very selective in terms of stocks.