Long term business trends should be good for Latent View Analytics, said Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services in an interview with CNBC-TV18.
“It is a niche business and we have seen in the past that niche business with a small offering - the kind of IPO size we saw in Latent - makes the demand/supply mismatch and that is why there is a huge demand,” he added.
"As the data is the new gold or the new theme in today's environment, one needs to see the growth - especially in this environment valuations do factor in," he mentioned.
"The confidence is little bit shaken after the sharp fall in the market in the last couple of days. There is some buying interest emerged after the fall but the overall mood in the retail segment is a bit cautious and that will continue for a while till some of the global issues settle down," he noted.
According to him, relentless selling from the FIIs also shakes up the retail confidence.
The lackluster listing of the new initial public offerings (IPOs) indicates the cautiousness in the market which the retail investors track, he said.
He likes Zensar Technologies. He expects the growth traction to sustain.
“The stock is trading at a significant discount to its peer group. Current valuation of about 20 times FY23 is the lowest in our midcap coverage and is almost a 45 percent discount to the tier II peer median valuation that we see. Hence, we see that with the growth being pretty strong and valuations comfortable that is our preferred pick in the midcap IT space,” he said.
AB Fashion is the stock which is linked to the consumer demand - the festive season has been pretty good.
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“We believe that growth momentum can continue. Margin improvement, especially in the private labels has been pretty good. Cost control measures have helped improve margins and the expansion plan and growth plans. The company plans to enter into the kids wear segment and the store expansion plan continues unabated. So, we expect a good growth going forward and we look at a decent upside with a target price of Rs 350 on Aditya Birla fashion,” he said.
For the full interview, watch the accompanying video.
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