Sanjiv Bhasin, Director, IIFL Securities, says “Mr Vaidyanathan, according to me, is the best banker in India. I see no letup in this stock. Yes, it is an expensive stock. It has run up far in excess but who is to blame? There was so much under-ownership and IDFC First is headed higher.
Bhasin also says that “Page Industries is a must-have. It is one of the best consumer stocks. Wait for declines to add some. Also, Indian Hotel or a Devyani or a United Spirits cannot be rebuilt.”
IDFC First Bank has managed to outperform its other banking peers but do you think most of the rally is over and it is time to switch into other names?
For the last two years, I was advocating this stock at Rs 30-35. And there would always be the argument on why should it perform? It was a lending institution and so on. And I only pursued that stock on the basis of Mr Vaidyanathan. Today, there is a sell report or whatever, but Morgan Stanley has been bearish from Rs 30. How will he justify Rs 100? The business is humongous.
Mr Vaidyanathan, according to me, is the best banker in India. I see no letup in this stock. Yes, it is an expensive stock. It has run up far in excess but who is to blame? There was much under-ownership and IDFC First is headed higher. As a disclosure for me, IDFC First Bank will be the next HDFC in the making in the next five years. Please stay put. If you are invested and if you are looking for corrections, then this would be a good opportunity as it consolidates closer to Rs 85-90.
Apart from IDFC Bank, which is one large bank, where do you think there could be a trigger? I mean, it is not a bet on the pure big picture of credit growth and a new credit cycle. Where do you think there are these small, small triggers which can generate more upside potential?
First to clarify, you rightly put it that return on equity will take time. This is what Vaidyanathan-ji specified. It was a lending institution which had benchmark nodes at a much higher rate of 9.5%.But almost 80% of that book, he has redone at much lower rates. So yes, there will be this cost of funding. But on the other hand, I think that the growth outlook and the NIMs which they have and the type of variable growth they are looking at is very, very impressive. The other large bank will be ICICI. No question about that. At this price, if there is one stock I can put my money on, it is ICICI Bank. And I think that is now going into four figures, maybe in the next two days and beyond. So 1100, 1150, if we have to go to 20,000, which I am very sure is coming by next week.
You look at the Alcobev industry also very closely. What is your top recommendation?
McDowell has been a personal favourite since long. As a disclosure, I have held it for almost 18 years. The beverage or the alcohol market is just revving up. Look at a stock like Radico Khaitan and look at the whole basket. Who is to talk about the consumption,? You have the G20, you have the World cup cricket. I specified Devyani International as one of my top picks. And I still think that United Spirits in that basket is doing well. I do not track United Breweries because we have United Spirits. But I am very bullish on Devyani International and the whole gamut of consumption.
Entertainment and hospitality in the hotel sector go hand in hand. Brands are going to rule the roost and you have to stay with the largecaps. A disclosure, Devyani and United Spirits are in our portfolio and we continue to be very bullish on both these stocks.
What is your take on Page Industries?
This stock goes back to 2007, 2008, when I was in Deutsche Bank. And we did a pre-IPO placement at 750. And in two years, it was 1,900. And as a hedge fund, we were laughing our way up to booking profit. And look where we are. Someone who makes undergarments is now rocking. And it tells you that the new millennials will pay anything which suits them. Those low jeans and your backside showing the underwear is a sign of strength on a lighter note.
I think Page Industries is a must-have. It is one of the best consumer stocks. The margins and the new portfolio which they have will only add to that. The stock has seen a sharp run-up from that Rs 37,000, 38,000. So wait for declines to add some. But these are themes for the next two, three years which are not going to be changed purely on the basis of brands, which is why I stress that Indian Hotel or a Devyani or a United Spirits cannot be rebuilt.
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