How is it that you are assessing Nykaa after the recent fall that the stock has seen?
Nykaa, obviously, I think it is going to face some challenges because more or less everything is available on Amazon also. So it is going to be a tough challenge for Nykaa as we go ahead.The other surprise move also has been the TTK Healthcare de-listing, right?
Yes that has been quite a bit of a surprise, actually. They have a long history on the exchanges basically and the company was doing pretty well. At the end of the day basically it is the management call whether they want to continue with the listing or not.
Could you just talk about the banking updates that have come in. You track the sector pretty closely. What is the sense that you get not talking about HDFC or IndusInd or any bank, but overall what sense you get on deposit and loan growth and the commentary that is coming in?
Besides this we have also talked to a lot of NBFCs basically besides the banking, I am saying it is the secondary channel as far as banking is concerned. And the read-through which we have seen from HDFC Bank saying that there is a very strong growth still on as far as loan growth is concerned. It is there across the industry.
So one is basically we are seeing across the industry loan growth. Secondly, we are not seeing much challenge on the asset quality front across the board. So I am saying one of the things we track is basically how many checks are bouncing for the NBFCs and the SFBs. And there, the number has not gone up at all. As a percentage actually it has fallen to the percentage to the loans.
So asset quality is not coming as a challenge as yet. Yes, I think most of them will be absorbing this cost increases given that the loan cost has gone up for most of the NBFCs as well as banks. So I am saying NIMS are going to be under pressure. But I think that is pretty well discounted in the market.
A lot of India strategist are calling out that Indian valuations are now fine after the recent underperformance especially versus China? How are things looking in, how would you categorise the Indian market?
Yes I agree with them that valuations have come off and we are at around if I look at a Rs 1000 earnings for Nifty in FY24 so I think at 17500 you are 17.5 times. I think long term average is closer to this so you are okay with that. But I think what is still the macros, that is the one question basically which I would still be bothered. What does Fed do basically in the current scenario about inflation that does not seem to be coming off and the drivers of that inflation still seem to be very sticky whether it is the unemployment rate or whether it is the wage hikes, they still continue to remain very strong.
I think that is the worry basically and if you continue to have interest rate higher for longer that is definitely going to slow down the growth. So now that Rs 1000 earning which I was mentioning earlier that is the only thing basically which is going to, the question is whether it is going to get achieved or not and that is why I am saying basically wait for dips to enter the market. I am more comfortable closer to less than 17000 rather than actually trying and hurrying into the market now.
What is your outlook on L&T given the fact that there has been some decent order wins just recently as yesterday there was a Rs 7000 crore plus order win for L&T. Is it a standout performer within this space?
Yes, definitely because I think if you really look at it within that sector if you are a large cap player, there is nothing beyond L&T actually. They have a large order book and the executions are pretty good though I think there are concerns as far as the return ratios are concerned. But I think otherwise it is a bellwether player out there as far as the industry is concerned because the second player is like one tenth of them basically. I think the second largest player is NCC which is around 10000 crore and L&T is around 150000 crore turnover. So I am saying there is a huge difference between the second player and the first. So L&T still continues to remain our favourite in that sector and we have a buy at these prices also.
