6 months ago
54
Sanjiv Bhasin, Director, IIFL Securities, says in October, when the FII short position was over 74%, that was when one had to be greedy. Now they have turned long on 18% and there is no short position. So, now, one should be fearful. You have to take it at your own risk reward. I see no risk reward right now till the earnings season is over as a large part of the positives of earnings are already priced in.” Bhasin says: “I continue to be positive on a buy on Vedanta on any decline and a buy on Nalco and SAIL. In specialty chemicals, UPL, Navin, Aarti are looking good.”
You had earlier warned that this month could get a little volatile and looking at the CPI and the PPI print in the US and the way the markets panned out from there, it seems like we got to brace ourselves for a little bit of global volatility?
Sanjiv Bhasin: That is very much on the cards. However, like you see in the US, the Magnificent Seven are again touted to have their best week in the last three. So, weak data or hotter than expected inflation is all getting absorbed. It is typical of a bull market which is ignoring bad news just on the pretext that people are feeling missed out.
I still think there is a lot of froth on the markets including the domestic market. If you just take a look back, if you recall in October, the FII short position was over 74%, that is when you had to be greedy. Now they have turned long on 18%, there is no short position. So, here is where you should be fearful. You have to take it with your own risk reward. I see no risk reward right now till you do not get through to the earnings season and a large part of the positives of earnings are already priced in.
So, stock specific, you can be in the market. But just being long on the index where a 4-5% correction is very much on the cards globally could be the right approach. So, no brave calls here, just something to hedge yourself. But look at good midcaps where you can add to your position and stay invested.
Where can one add positions within mid and smallcaps? What are you liking?
Sanjiv Bhasin: So, I have been positive on the metal basket and specialty chemicals. You saw the comeback we saw last week. I continue to be positive on a buy on Vedanta on any decline and a buy on Nalco and SAIL. These are proxy to China coming back. Traditionally, when I joined the market, the first thing I was taught when rating agencies downgrade or upgrade is the bottom of the cycle. We recently saw China's sovereign rating getting downgraded. Now you cannot but get better news from China and metals become a proxy.
Specialty chemicals have seen a very large surge and the price of corn seeds, sunflower, canola are up 37% in March. So, UPL, Navin, Aarti – this basket is looking good. On the real estate side, a disclosure, Indiabulls Real Estate has been one of our top picks from 100. The infusion of Rs 4,000 crore capital means this company is on verge of being re-rated. The final hearing from NCLT for the merger clearance comes on 24th. This stock is worth 250 in the very near future.
What is the view then on Zomato given the kind of strides that it has been making in the stock markets?
Sanjiv Bhasin: Zomato, PB Fintech and Paytm were the three picks which we had. Unfortunately, Paytm performed very poorly. But PB Fintech has doubled from Rs 750 and Zomato has been three times the size now. The left out feeling is so humongous that you will get the buy reports every day. What was traditionally expected to be a blunder in Blinkit at Rs 50 has turned out to be the icing on the cake at 200. So, one should be a little cautious here. If you have it, stay put, but do not try a new entrance because we must see some correction, some stabilisation and wait for the quarterly uptake. However, you can add it on dips if you have a longer-term view.
What is your view on InterGlobe almost touching Rs 3800 level now because this is the dominant player. Now with things falling off a little bit with Vistara, we have seen what has happened with Jet as well as SpiceJet. This would continue to have the lion's share in the market and be the only one perhaps up and running without any trouble. What should one do with InterGlobe?
Sanjiv Bhasin: When I suggested IndiGo, you told me that I travel Vistara, so I am more familiar with that. You will have to change your preferences because Vistara is seeing a lot of irregularity. Even though I generally do that, see IndiGo's turnaround time. It was a lean, mean fighting machine that at Rs 1,800, was a screaming buy. At Rs 3,800, there will be buy-sell reports. But it continues to garner the larger part of the market share.
And with GoAir going down, SpiceJet seeing problems and now Vistara as well, InterGlobe will be laughing its way to the bank. Yes, it is an expensive stock, but that is the beauty of the market. Expensive has got more expensive. Who thought the Magnificent Seven would take the US market cap to all-time highs and 80% of the rallies in those seven-eight stocks?
I still think on dips, IndiGo becomes a perfect play to a proxy of rising ambitions. The day luxuries become a necessity, that is the change of fortune for that industry or company. So, I remain sanguine on this stock. I still think there is more upside. But like you said, the headwinds of valuation and the higher crude oil which has now quietly crept up to $90 can be a slight bit of a damper in the near term.
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