What is your take on the Adani Group as a whole and if at all what would be your top bet?
Our view is that now we have to look beyond this one group where the focus was there and to some extent the sentiment got damaged for the PSU banks or the banking sector and we have seen some revival in the last two days. I think more importantly as we go ahead, the market would start focussing upon the data points which are coming out globally, the hawkish stance from the Fed chairman as well as the slowdown that we are witnessing on the consumption side. So, though we have seen some pullback in the market given that global set up and this consumption slowdown, people would look to focus upon the sectors where the earning visibility is still better compared to some of the consumption led names. So, we should focus upon those sectors and stocks rather than trying to focus upon the overall market or a particular group. Wanted to get in your take as to what the outlook is on the latest takeaways from the Bajaj Auto Management Meet. They have acknowledged that exports are slowing down, EV plants are gathering momentum and they are saying that the exports could recover by Q2 FY24. Your views?
Incrementally, things are not looking positive for Bajaj Auto because 40-45% of their revenue is still coming from exports market and you have some headwinds and we have seen that the production cut has been announced. I think the important monitorable for Bajaj Auto are their entry into Brazil and the new launch of Triumph. And we think that the stock would remain a little subdued given that we do not see incremental positive news. Even two-wheeler as a space has remained a little subdued. So, we think that makes more sense to go with the four-wheeler names or an Eicher which are relatively better placed or even for that matter Ashok Leyland.
This morning there is also a positive note coming in from CLSA talking about the power sector as a whole, how they are quite positive on it. Of course, there is the fact that it is going to be hotter than expected summer so demand will continue to be on the higher side. They are still calling it inexpensive and believe that a lot of these counters also provide support with respect to high dividend yield. How are you looking at the power sector and is there any specific name that you want to flag out?
So, clearly, the utility stocks have remained relatively better off in the last few months and if you see the volume data points and the tariff part, there is a fair bit of stability. So, we do think that names like NTPC, Power Grid are the ones which will provide some sort of stability with a good dividend yield for those who are looking for low risk ideas.
At the same time, some of the companies which are providing the equipment to some of these utility companies on the capex side, I think that is the only segment which is showing a lot of strength and the order inflow for them continues as the capex cycle is moving. So, I think we should focus upon capex, so the names like ABB, Siemens, Larsen and also some of the power utilities in an environment where there is a slowdown and the overall market may not show much of resilience.
Just wanted to know how you are approaching Vedanta right now, if at all it is in your conviction list because now they are claiming that they are going to be debt-free, couple of interviews given to many agencies as well from Anil Agarwal seem to be hinting towards that.
At the moment, we have a neutral rating on Vedanta and recently the stock has actually shown some sort of up move after the yield had actually gone up on the Vedanta Resources globally and the metal space also is not looking that good because you have seen incremental data from US, euro zone not looking so good. China is again not very clear. So, I think commodity or metal as a space will remain a little bit of range bound with a negative bias. So, for now we would stay away from Vedanta.