Responding to ET Now on whether SBI still offers an opportunity at current levels, Dewan said he remains constructive on PSU banks, citing strong earnings momentum and reasonable valuations.
“Yes, I have been positive on PSU banks and the kind of stellar results SBI came out with, it makes sense to still stay invested in SBI. In fact, it is still a buy-on-dips kind of a stock and if someone has already invested, they should hold on to it because valuation-wise they could be still available at less than 1.5 times book and historically, it has gone even as high as 1.6, 1.7. With this kind of earnings and the growth that the balance sheet can give them going ahead, I think at this price State Bank or even other PSU banks still, there is a valuation comfort and they can still give you decent returns from these levels also for a long-term investor,” Dewan said.
On the commercial vehicle (CV) space, Dewan remained optimistic, pointing to improving capex trends and replacement demand. He noted that recent numbers from Ashok Leyland reflected operational improvements and better cost management.
“Yes, I feel that the CV cycle is already doing well right now and they should continue doing well in this quarter also. Capex is picking up, which was delayed earlier, which we saw in the second and third quarter. But now from the third quarter onward you are seeing a meaningful pick-up there. Even some of these equipment manufacturers for CVs have been shoring up their capacities and I feel that CV for this quarter also can give you a good surprise, looking at the back of the capex and the capex pickup,” he said.
However, Dewan advised caution on the IT sector, suggesting that the space remains highly volatile and difficult to assess amid rapid changes linked to artificial intelligence and recent negative developments.“Yes, actually definitely some bottom fishing did happen last quarter and even when the initial results were declared, Infosys kind of guidance and the results and people were getting a little positive, but then this bad news came from Anthropic. So, still for an investor, he can avoid it right now because there is too much volatility which is there in the sector, too much of changes which can happen going ahead. So, it is better to avoid right now because we are not sure in the next six to eight months what kind of changes or what kind of new flow from AI and related will impact the earnings,” Dewan said.He added that recent developments could have a structural impact on IT business models and earnings visibility.
“The kind of news which has come in the last couple of weeks has been pretty worrying also, so that can have an impact, but to what extent we still have to see. But definitely some impact will be there on IT companies and there will be a lot to think and change in business models, how IT companies behave and how they function also,” he noted.
On Lenskart, despite acknowledging strong post-IPO numbers and expansion potential, Dewan flagged valuation concerns and relatively weak returns on capital as key risks.
“So, first thing on the numbers, numbers were definitely good and after the IPO this kind of numbers are positive for the company. But second, everything comes at valuation. The stock is already at ₹81,000 crore market cap. Even if they do about — I think at the current run rate they are doing — at ₹134 crores profit, even if you do ₹600 crores, still it is a very-very expensive stock. ROC is very weak, it is I think 6–7% ROC business. So, there are definitely better opportunities in the market,” he said.
Dewan also compared Lenskart with established listed players, highlighting the importance of balancing growth with valuation discipline.
“One has to play the growth, I agree to some extent, but then growth also has to come at a price. So, it is an expensive stock. So, I will not say it is a compelling buy. Maybe if you get some correction in the stock, then maybe one can look at buying it for a long term. But still it is very expensive and if you compare to already listed strong plays like Titan, which is maybe ₹3,77,000 crore market cap, but then the ROCE is 36–37, going towards 40%. So, there are much better opportunities in the market right now. So even if you want to buy growth, it has to come at a price,” he said.
Overall, Dewan’s comments reflect continued confidence in PSU banks and the CV cycle, while urging investors to remain cautious on IT amid structural uncertainty and selective on high-growth stocks where valuations may be running ahead of fundamentals.
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