“We have not invested in a lot of infrastructure-oriented companies because we just do not get the kind of return ratios that we look for in our businesses or even the working capital cycles as such. In the case of the Adani Group, if I had to look at any sector, it would bethe cement pack and port,” says Nitin Raheja, Executive Director, Head – Discretionary Equities, Julius Baer Wealth Advisors
Defence is an evergreen theme but the Budget allocations have gone up by only 1.5% while the railway budget has increased exponentially. Defence companies are growing because the Government of India will have to spend more on defence to protect our borders. If that allocation is coming down and moving towards railways, roads and bridges, is the best of the gains in defence is behind us?
The government may also be factoring in the fact that a lot of the spending that they were hitherto doing, which was towards MNCs or orders being placed out of the country, is now moving in with the trust of indigenisation. So some part of that would be available at lower prices. Defence is not about the absolute spending, it is about how much of that spending, which was earlier going out, is now coming in.
Defence is an evergreen theme but the Budget allocations have gone up by only 1.5% while the railway budget has increased exponentially. Defence companies are growing because the Government of India will have to spend more on defence to protect our borders. If that allocation is coming down and moving towards railways, roads and bridges, is the best of the gains in defence is behind us?
The government may also be factoring in the fact that a lot of the spending that they were hitherto doing, which was towards MNCs or orders being placed out of the country, is now moving in with the trust of indigenisation. So some part of that would be available at lower prices. Defence is not about the absolute spending, it is about how much of that spending, which was earlier going out, is now coming in.
How comfortable are you investing in any of the Adani names, if at all?
Generally speaking as a rule, we have not invested in a lot of infrastructure-oriented companies because we just do not get the kind of return ratios that we look for in our businesses or even the working capital cycles as such. But if I would look at one sector, it would be, it would be something everybody talks about, cement pack and the port.
We have seen a lot of change in the life insurance business post the Budget. , and other insurance stocks have taken a knock after the Budget. Is it a good time to buy into it?
I continue to believe that life insurance is a good long term story especially given the penetration. There is already a conversation that there will be a different type of product and
has talked about it. Fundamentally, the government has been looking to plug in all products where there was a tax arbitrage. I think most people will not just buy insurance for tax. It has also got to do in relation to what is on offer across the dimension of products that are on offer.
In the insurance business, in the next two months we will see at least a push and don’t be surprised if you see a lot more business happening in the next two months given that over the next year, they come back with newer products and present something more attractive for policyholders.
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