Dipan Mehta, director of Elixir Equities, discusses his analysis on the fundamental side of the market as well as specific stocks and sectors.
“The street is taking a very simplistic view that just because Vodafone -Idea will no longer be in operation that there will be a duopoly and they will be able to raise the average yields for these companies but that is a very simplistic view."
"Vodafone -Idea is just not going to shut shops tomorrow or in three months’ time. Even if it goes into NCLT immediately it will stop paying interest so it becomes cash flow positive and they will keep on running their operations till the NCLT takes it towards logical end which is to find a new buyer for the whole company or break up the company into several circles and then get individual buyers for all of them."
"Now the existing players, I don’t think Reliance or Bharti Airtel can bid for Vodafone because the competition commission will have an issue with that.”
“They are at distressed level pricing so if you have a contrarian bent in terms of your investing strategy, then you could look at Ashok Leyland and hope that maybe three years from now when all these issues are over and done with stock prices can double."
"Essentially it is a good company with good products and has shown good performance over the past few years or so and they have filled in the products gaps and gone overseas as well. But it is many ifs and buts, you have to have very long term 2-3 year’s type of view."
"The scrappage policy will not start kicking in benefit immediately I think these things take time to go through. It is good for the industry and it will aid the recovery process but I don’t think it is going to be a complete game-changer.”
“Our preference would be Aegis Logistics, it is a company which has not been as much discussed but the way they have performed the last 3-4 years have been incredible. They are clearly benefiting from the gasification from the entire economy and they have got massive profits coming from their LPG trading. That has got more runway for growth than some of these gas distribution companies. With a disclosure that we and our clients are invested, we prefer a company like Aegis Logistics which has greater growth prospects.”
“I have been very positive on gold loan companies and for disclosure we own Muthoot Finance and Manappuram Finance. The gold price increasing has significantly benefited these companies because it increases the kind of gap or the amount that they can lend against the gold already pledged with them.”
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