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SENSEX
NIFTY 50
NIFTY MIDCAP 100
S&P BSE MIDCAP
Hang Seng
Taiwan Weighted
DAX
Nasdaq
MCX GOLD FEB 05
MCX SILVER MAR 05
MCX CRUDEOIL FEB 19
MCX NATURALGAS JAN 25
USD/INR
EUR/INR
GBP/INR
JPY/INR

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Market

Market underestimated negative impact of coronavirus; like cement, says Dimensions Corporate Finance Srvcs

Updated : February 24, 2020 11:06 AM IST

Ajay Srivastava, CEO of Dimensions Corporate Finance Services is of the view that at least in the last week, the market underestimated the impact of coronavirus and we have got the whiplash for doing that, which will cause us a lot of pain.

However, according to him the the US market would ride through the pain much easily than Indian market. The US economy will bounce back much faster because it is insulated, the tech sector may not be that much impacted due to coronavirus.

So, the big question is where will India go with a doddering market and with liquidity only in about 30-40 stocks.

Speaking sector specific, he said, “Cement is in a good space. One is because the comparative pressure is not going down. Two, as an industry it is beautifully positioned because number of players have shrunk and price discipline is coming into place. Three, fuel cost is lower, power cost is lower, so they will benefit from this including the transportation costs, which had been quite low. So, it is in a wonderful place both on the comparative side as well as capacity expansion, it will be a steady gainer.”

On the telecom space he said, “We hold Bharti Airtel. We are quite bullish on the stock and believe that they will ride this storm and as tariffs will go up, they will go up. Even Vodafone as a company, we are confident, it will continue. The question is will the promoters remain. The reason is not only telecom, every bank which lends to Kumar Mangalam Birla companies today would be wondering and saying - they have said very clearly this company is ringfenced, with no personal guarantees, so if this goes down, we are not going to pay. If you are a lender to Kumar Mangalam Birla companies, as a banker you would now go back to the board room and says let us put into question all the loans as to whether you want to keep giving without personal guarantees. So it is a given that promoters will change. It is just a matter of time. company will continue, it is a healthy running company, somebody will pick up the shares at Re 1, pay off the debt, government will come up with some scheme, I don’t think company is going to extinction, I think its promoter is going to exit in a very short while.”

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