Ajay Srivastava of Dimensions Consulting is betting big on PVR at present as he feels it is the new Maruti Suzuki in the entertainment space
The market has been rallying from July and hitting fresh record highs, with intermittent correction due to global woes. Currently, investors are wondering to invest in the market or wait for a correction.
Ajay Srivastava, CEO of Dimensions Consulting, said he doesn't recommend buying as most stocks appear overbought post their June quarter earnings. He is not booking profits at the current juncture as he sees further legs to this rally.
Among sectors, Srivastava said the research house has made some purchases in hospital and agri space last month.
He has already over-invested in financials but has kept away from state-run banks. "HDFC Bank and Kotak Mahindra Bank's Q1 FY19 earnings were not inspiring. Axis Bank has already re-rated after its earnings but ICICI Bank may get re-rated soon as no one knows when the bank may report a loss due to rising non-performing loans to power companies."
Majority of steel companies delivered a stellar set of earnings, especially after the government's raised tariffs on imports. However, Srivastava thinks big money has moved out of the sector now. "The rally in the last one year was due to tariffs and hence better price realisation. These are heavily leveraged companies with high foreign currency loans, so there is going to be a lot of red ink going forward as they have to reinstate their loans. Rising interest rates, rupee depreciation versus the dollar and high leverage are going to be killers for steel companies,” he stated.
Among stocks, he continues to remain invested in Page Industries. Srivastava is betting big on PVR at present as he feels it is the new Maruti Suzuki in the entertainment space. Explaining his rationale for the same, he said, "There are 400 million Indians who do not visit cinemas, so there is huge latent demand for multiplexes, though there is risk from the streaming business. The Ajay Bijli-led company has dominant market share and nobody is close to it. Inox Leisure at second place but there is a huge gap between these companies."