New-age stocks have exhibited recovery, but better wait and watch: Sudip Bandyopadhyay

Even against this backdrop, we have seen markets by and large holding and at every lower level we have seen buying coming back. This is the reason why the back of the market has not been broken in spite of a lot of provocations I would say. Of course, the domestic flows including the SIPs helped in that matter but having said that the way the market is poised we believe that most of the triggers which we were waiting for whether it is RBI policy, US Fed announcements, the budget, even the corporate results are out of the way by and large.

I mean there are a few results still pending for the next week but the major results have by and large come. So the market will remain kind of range bound, will wait for a trigger, and will act on specific news flows. We do not see any major trigger in the near future and I expect the market to remain range bound with definitely a positive bias on the back of positive expectation as far as the Indian economy is concerned.

As for new-age tech stock, a lot of these companies change the tonality, largely playing as per what the market had wanted to hear at least when it comes to profitability, turning breakeven, really focussing on their earnings metrics, barring . So has your perception changed or will it change, what is the outlook?

Sudip Bandyopadhyay: You are absolutely right. They have understood the demands of the public market and they have started acting accordingly. Obviously, the path to profitability and the PE multiples and things like that which predominantly is driven by profit is what the public markets want and they are now cognisant of that and trying to work towards that. But having said that, there is still a long-long journey.

While has improved at an EBITDA level, EBITDA positive, I think it is a long journey. The business model is still settling. I cannot say it has already settled. While the loans are giving them maximum income, it is pretty much a distribution piece and remember distribution income does not give a stability or a valuation in the long run so one has to see what are the other levers of valuation. It did recover a bit and, of course, there were some block sale and there was a bit of a dip but I am not sure whether investors should rush to buy Paytm. I would say the same about Zomato, and some of the other new-age companies. We have seen improvement, but I would not recommend buying yet. It is better to wait and watch even now.

, , , are among the largecaps that will be coming out with earnings. In particular, what are you expecting when it comes to Motors?

Sudip Bandyopadhyay: Well, I think Eicher should come up with a good set of numbers. We have seen the numbers and we have seen the performance of Eicher over the last few quarters and things are definitely improving. In fact, out of the entire automobile pack, we have our favourites M&M and Eicher. We also like . But if I have to pick two stocks, it will be M&M and Eicher. So I will be watching Eicher. Another company I will be watching is Apollo Hospitals which I think is a very-very interesting play on the entire pharma, hospital and diagnostic space. If one needs to bet in that space, we believe Apollo after correction definitely looks good even at current levels.

Do you have any top pick given the fact that we faced two continuous volatile weeks, so any particular stock that one can look at?
Sudip Bandyopadhyay: I will still go back to my favourite Larsen & Toubro. With the government’s focus on capital expenditure, construction infrastructure is going to get a big boost and Larsen being the leader by far in that particular space is definitely going to be the beneficiary. Performance of L&T also has been improving continuously quarter on quarter. They have also managed working capital much better by getting rid of their unrelated assets and unrelated diversification. Their subsidiaries are doing exceedingly well. So overall, we are extremely bullish on L&T at current levels.