TVS best bet in two-wheeler segment; bullish on Ashok Leyland, M&M, Maruti: Nirmal Bang Institutional

TVS Motor Company is probably the best bet in the two-wheeler bracket, Rahul Arora, CEO of Nirmal Bang Institutional Equities, told CNBC-TV18.

“TVS is probably the best place, according to us, in the two-wheeler bracket. And of course, in passenger vehicles, Maruti Suzuki is the only proxy. So, most of the issues are transient; more medium-term issues, but once you tide over them, some of these names, like Ashok Leyland, M&M, TVS, Maruti could still be a very good portfolio hold for the long-term,” he said.

Arora further said, “The biggest issue plaguing the industry is the semiconductor shortage and it seems like this is a transient issue as well. I don't think anyone can put a lid on exactly when this problem would resolve itself, but looking at the global semiconductor companies, their capex for the next one year is actually higher than it was in the pre-COVID era by 15-20 percent, which is quite astounding. So once this issue does resolve itself, in 6-12 months from now, in totality, this particular issue will be put to bed. The issue then will probably go back to demand.”

On Zomato, he said, “Let's see how the Zomato story plays out. It's a test of institutional investors as well; it is a loss-making company. The mindset is very different from private equity, they are going to ask for RoEs and RoCs eventually, so they are giving the benefit of the doubt. If you are holding it, hold on. You will still make some money, but I will be watching this space carefully.”

For the entire interview, watch the video