In an interview to CNBC-TV18, Deepak Shenoy of capitalmind.in shared his views on the fundamentals of the market. He also spoke about specific stocks and sectors.
Reliance Industries will operate in Rs 1,000-1,400 band in the term, Shenoy said. “As a disclosure, I do have Reliance as a part of my portfolio so a little bias there. However, there is a piece of news that is being awaited in the market about their invitee getting invested in by Brookfield about which the news has not yet come. There is this tower assets that they are moving to Brookfield invested invitee which will reduce their debt to a certain extent and it will also increase their effective cash holding,” he said.
“However, what this will actually do is reduce their profitability at least in the short term because where they were not paying any rent for any of the towers today because they own the towers, when the invitee has been formed or it has already moved, the rents will start to flow out of Reliance into this invitee from this quarter onwards. So there will be some kind of weakness in terms of earnings going in the immediate future, but I feel the benefit of such a move will be much greater in the longer term,” he added.
On Piramal Enterprises, he said, “I have some concerns on the way the real estate portfolio has been behaving largely because I think some of the liquidity issues that the portfolio faces are more structural in nature. Some of their real estate partners are not able to sell and they are not able to sell down some of that portfolio as well.
“The good thing is, this is a bet on the execution capabilities of Mr. [Ajay] Piramal [the promoter of Piramal Enterprises]. He has proved to be a very good entrepreneur in the past and has seen challenges much worse than this. So if you have that kind of confidence and you have been with him before, I think then it deserves to be in position that one can hold for longer term or even purchase more at this point,” he added.
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