Ajay Bodke, CEO and Chief Portfolio Manager(PMS) at Prabhudas Lilladher, spoke to CNBC-TV18 about select stocks and sectors.
On IndusInd Bank, Bodke said, “It is essentially symptomatic of heightened risk aversion that has enveloped the Indian market's fears of contagion due to the worsening NBFC crisis and the spread of this crisis sort of into different sectors where we are slowing consumption impulses on top of the fact that private sector capex cycle is moribund and exports remains anaemic. So a confluence of all these factors essentially is making investors extremely worry of biting into any names where it was perceived that their book might sort of may necessitate higher provisioning requirements. But somewhere the fact that the exposure to sector which are perceived to be risky like NBFCs, real estate, gems and jewellery is keeping investors sort of cautious on these names.”
Talking about NBFCs and its crisis, Bodke said, “Bajaj Finserv all of us know are the safe heavens, where a large amount of money has gravitated, but let us not forget that they have also become extremely expensive so as long as the growth continues to chug along at 40-45 percent, I think the market will be blasé about the fact that they are being valued to highly. But we have seen in stocks like Page Industries, or Eicher Motors which were the darlings of the market, and where growth was significantly high for many quarters but any slight faltering of that growth and prices sort of came off sharply. So one needs to keep an eye that is the long term valuations and fundamentals do matter.”
“Among the other companies sort of L&T Finance, I would still be very cautious because they have very large exposure to the real estate sector. We are seeing that not much of the real estate transactions are happening and I don’t see turnaround happening on that count anytime soon. I would much rather sort of look at companies like Cholamandalam Finance in case of NBFCs and M&M Finance followed by Shriram Transport Finance,” said Bodke.