ET NowIn a chat with ET Now, Dipen Sheth, Head - Institutional Research, HDFC Securities, talks about the markets. Excerpts:
ET Now: Budget 2015 is history now, but is it time to move on? Or do you think there is lot of post-Budget adjustment which is still left from a market perspective?
Dipen Sheth: I feel there is still quite a bit of post-Budget adjustment to play out. The market will take its time going through the fine print.
A lot of the fine print which was looking good initially may not look so good some time later. In the same manner, some others that we were cribbing about may actually look very interesting going forward.
These things will play out over the next few weeks. You just have to allow the market some time to figure things out.
ET Now: Your top multibagger idea — a theme or a name?
Dipen Sheth: I do not know about multibaggers. But I am quite optimistic on Cholamandalam Finance. Despite its apparently premium valuations, there is plenty of scope for this stock to deliver very good returns.
You might crib a bit about its headline valuation numbers, but that is not an important point. What is important is the fact that it is in two strongly cyclical segments of lending. One is for truckers, where they are positioned in mid-segment lending. They do not lend to the absolutely large fleet owners. They have picked up a very niche position in that segment.
They are close to 500 branches and with the cyclical uptick in the economy — the road sector looking up and the CV cycle coming back very strongly — they are very well positioned to post significant operating leverage going ahead.
The second segment where they operate is loans against property for SMEs. In that segment, they are seeing secular growth. And they have managed their risks very well too.
ET Now: Don't you think they have a great management?
Dipen Sheth: Yes, they have a superb management.
ET Now: Budget 2015 is history now, but is it time to move on? Or do you think there is lot of post-Budget adjustment which is still left from a market perspective?
Dipen Sheth: I feel there is still quite a bit of post-Budget adjustment to play out. The market will take its time going through the fine print.
A lot of the fine print which was looking good initially may not look so good some time later. In the same manner, some others that we were cribbing about may actually look very interesting going forward.
These things will play out over the next few weeks. You just have to allow the market some time to figure things out.
ET Now: Your top multibagger idea — a theme or a name?
Dipen Sheth: I do not know about multibaggers. But I am quite optimistic on Cholamandalam Finance. Despite its apparently premium valuations, there is plenty of scope for this stock to deliver very good returns.
You might crib a bit about its headline valuation numbers, but that is not an important point. What is important is the fact that it is in two strongly cyclical segments of lending. One is for truckers, where they are positioned in mid-segment lending. They do not lend to the absolutely large fleet owners. They have picked up a very niche position in that segment.
They are close to 500 branches and with the cyclical uptick in the economy — the road sector looking up and the CV cycle coming back very strongly — they are very well positioned to post significant operating leverage going ahead.
The second segment where they operate is loans against property for SMEs. In that segment, they are seeing secular growth. And they have managed their risks very well too.
ET Now: Don't you think they have a great management?
Dipen Sheth: Yes, they have a superb management.
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