HDFC and Bajaj Finance remain our favourable picks, said Deven Choksey of KRChoksey Securities on Wednesday. The two non-banking financial majors are expected to benefit with the demand picking up in the real estate sector, he added.
“Our comfort level is staying very high with the likes of HDFC, Bajaj Finance where we are seeing a higher amount of growth continuing for these companies. With the demand picking up in the real estate sector, these two companies are remaining steady as far as their growth is concerned. From a perspective, we see long-term visibility in the portfolio, these companies remain our favourable picks and we hold them in our portfolio,” Choksey told CNBC-TV18.
Choksey also said that public sector banks definitely have the advantage because of the pedigree that they enjoy as far as their reach to customers is concerned. However, the lack of consistency of management is not allowing them to stabilise on their business model and as a result of which these banks lack the visibility for their investors as far as growth is concerned.
Therefore, private sector banks should be preferred in the portfolio vis-à-vis public sector banks, he said.
“Our focus has always been on the corporate, the private sector banks where we feel these banks have stable management and at the same time they have created a significant amount of value proposition into different verticals which they are operating. Some of these banks are also sitting on the prospects of a higher amount of monetisation, likes of ICICI Bank, Kotak Mahindra Bank, HDFC included. So from that perspective, I believe these banks should be preferred in the portfolio vis-à-vis public sector banks.”
Choksey also said that there is a good amount of possibility that the State Bank of India (SBI) will get added into the portfolio of many of the investors.
“It ranks ahead of others as far as recovery aspect is concerned. Given the fact that the market is having an appetite for larger companies into the portfolio, certainly, the likes of SBI—which has the largest balance sheet in the sector— would probably stay ahead of others as far as a selection in the portfolio is concerned. All the aspects are favouring SBI.”
He remains positive on Ceat. “However, we will have to look at what commentary comes out on the margin front for the next few quarters,” he said.
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