“We have recently initiated coverage on and as I mentioned, real estate is a space where we have a very positive bias on and we think that this would be at least a three to five years kind of a story. In the QSR space, and are the names that we have been liking a lot,” says Hemang Jani, Equity Strategist & Senior Group VP, MOFSL
What is the outlook on IT because we are talking about our markets playing catch-up to the global cues right now as we see a rally playing out? Will IT be a part of that rally and play catch-up?
What we have to bear in mind is that the Q2 preview is pertaining to the period which has already gone by and the market is sensing that. Incrementally things are turning a bit worse – be it US markets or the European markets – and a lot of companies have a significant exposure to some of these markets. That is going to be an overriding concern in IT.
Also, bear in mind the cross currency headwinds because of the movement that we have seen in the euro, the USD and many other currencies is not fully reflected in Q2. The market would start sensing that maybe Q3 and Q4 could see incrementally negative developments.
If we get some positive surprise in terms of margins or commentary, then a significant correction of about 30% to 40% across many names could provide a good short-term opportunity also. We think that we should look out for good commentary from the numbers.
and are the two names where we have a positive bias in terms of quarterly numbers.
What are you telling your clients? How can they deal with the comeback in this kind of market volatility – big Friday, poor Monday and it could be a very strong Tuesday?
Volatility has increased but while we really have to be a little careful dealing in this phase of the market, we also have to reckon that it provides great opportunity for traders. The way the volume has shaped up on the options side, there is a lot of retail activity which is showing traction and we think that this correction would provide a good entry point across some of the names where we have positive bias – be it consumer, be it real estate, QSR or the footwear.
Overall we think that there may be a little downside given the kind of development that we have seen on the inflation and interest rate front and negative flows. There is confidence which across the pack and business updates are flowing in. We can see that initial indications are positive and so we should be a little positive in terms of our approach and look out for opportunities to enter into some of the interesting themes.
Give us two stocks where you still recommend a buy?
We have recently initiated coverage on Mahindra Lifespace developers and as I mentioned, real estate is a space where we have a very positive bias on and we think that this would be at least a three to five years kind of a story. If the interest rates do not go well above 8-8.5% level, apart from the fact that the traction is very good, the Mahindra Group has a very interesting plan and a big pipeline in terms of the kind of projects that they want to enter into and there is going to be monetisation of some of the assets which they are holding. So Mahindra Life would be one stock where we have a positive view on.
Apart from that, we have been liking the QSR space. Devyani International and Jubilant Food are the names that we have been liking a lot. These guys will continue to grow irrespective of the volatility and the sentiment that we see and they have a pricing power. These are the names where we would definitely be positive.
ET Now: The EMI IPO opens today and after a long gap and is seeing some fair amount of chatter around it. Is this a space that you like and is this a company or an IPO that you are recommending a subscription to?
Hemang Jani: We had a look at the numbers and what is coming out very clearly is that they have a very geography specific presence though the segment in which they are operating. The retail consumer products are definitely interesting and we are seeing a lot of traction across the names
But we have to reckon that there are two, three large players –
Digital or Croma, Vijay Sales. So, with that kind of a balance sheet and footprint across the country, if a local player is trying to get into that space and expand with the current rental and the real estate pricing, it is going to be quite tough. We would rather avoid this one at this point of time.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. 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 on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
