Next five-seven years also the growth projections are in the range of 18 to 19 odd percent and this is one company which has been delivering very consistent set of numbers. So, one needs to be very selective in it, but given the fact that it as index itself has corrected by about 23-24 odd percent and if the peak of inflation related tariff or inflation related anxiety is behind us, then it also could be headed for some technical bounce.
We saw a bit of that yesterday, but our sense is that some more recovery is very much possible in the IT. So, largely the hopes will lie on FY27.
Just wondering how some of these globally linked companies should be now looked at. We have seen a big move come in on Tata Motors already since last week. You have got SAMIL as well holding up. You have got Sona Comstar as well doing good and so is the case with Bharat Forge as well. Do you think fundamentally concerns are easing with some of these export linked companies or do you think it is just a dead cat bounce because they were very oversold?Pankaj Pandey: See, overall sense is that the news developments can turn positive because both auto and steel overall the tariff is still there, but when you look at the news flow, it is possible that US might give some leeway in terms of certain segments for autos talking about China. So, some kind of a leeway is very much possible. For Tata Motors, the good part is that one-third of their revenues or the US market is a big market for them, one-third of the revenues come from there and largely this is one geography which is served from a market like UK and which is likely to attract lower tariff. So, from that perspective some of these companies can be looked at, but it is still too early to say how things will pan out because overall sense is that in case if there is a generic slowdown in US, a lot of these exporters could get hit.
The focus largely should be at this point of time more of domestic driven sectors. So, from that perspective, exporters one needs to be very stock specific rather than a broad-based approach.
The fact that you mentioned that you need to look at domestic oriented sectors at this point in time given the fact that you have a lot of global uncertainty, so exporters is something that you can leave out of it. So, which are the domestic oriented sectors that one should watch out for?Pankaj Pandey: Banking is the best sector to look at largely I think last few months the RBI has been quite positive in terms of news flows. The other perspective is that the FIIs selling if I look at the first fortnight data, while they have sold about 33,000 odd crore, the extent of selling in BFSI is quite less and of the recent numbers our sense is that they have turned positive and overall sense is that BFSI as an entire space is looking quite attractive and it is a big sector.
Domestically things are shaping up well, so be in terms of credit growth or be it in terms the kind of measures taken. So, for example, overall sense was that we could be witnessing a margin pressure of 14 to 15 odd percent for banks in general and half of them that can be recouped with the RBI measures and also the fact that banks have been cutting the savings rate.
So, things are turning quite positive for banks as overall segment and which is actually very good for markets also because they are a big component of the overall Nifty.
Do you think there is still scope for the stock to move up higher? Does it still have headroom and at even at Rs 9300 can one still look to buy?Pankaj Pandey: So, when you look at Bajaj Finance at current levels of say 9300, see the stock is trading somewhere about 3.5 times price to book and ROA for this stock is expected to be about four odd percent in FY27. So, obviously there is room for multiples to expand and which is why I would want to believe that this NBFC can keep doing well because there is no let down on the growth front in terms of 25-26% kind of a growth rate expected from here on, so Bajaj Finance from current levels looks attractive. There is a scope for multiples to go up.
One of the majors coming out with the numbers and that is Dalmia Bharat. The numbers look quite strong and given the fact that for the past couple of months we have seen the cement prices across India moving upwards, but do you believe that maybe it is time to look out for some of the counters in the cement pack, what is your overall view coming in?Pankaj Pandey: Absolutely, when you look at the numbers for Dalmia Bharat, Q3 the capacity utilisation was somewhere about 58 odd percent which has jumped to about 74 odd percent, so which is why quarter on quarter you see a good amount of improvement in the numbers be it on the top line or be on the EBIDA front. The EBITDA per tonne has inched up to 902. So, we would want to believe that the worst is behind us, especially for a sector like cement and Dalmia has done a lot better compared to our expectation despite the fact that they have exposure on the southern side.
So, I would expect northern based players to come up with a better set of numbers. This is one sector which has been struggling for some time in terms of overall volume de-growth plus also from the perspective that the pricing have been soft and both the variables are coming into play and on top of it we are also seeing the cost per tonne coming down which is what we have seen in case of Dalmia Bharat. So, besides bank, cement is another sector which is a local driven sector, can really do well from current levels.
