The positive outlook for HDFC's stock, which remains in focus a week after the mega-merger of twin entities, is expected to continue, suggested Raunak Onkar, research head and co-fund manager of PPFAS Mutual Fund.
"As far as the merger goes, it is good as the group has become stronger and can benefit from the move. We are quite positive about the merger," Onkar told CNBC-TV18 on April 8.
For ITC stock, the analyst said "let the market decide the valuation". The company has been "doing the right things" on the business front.
They have added more brands "wherever they strategically see a fit "with their existing portfolio, Onkar said.
"At the same time, the cash flows that keep coming in from the tobacco business do support some of these capital allocation choices. Even they have committed to increasing dividends over a period of time. So the payout ratio has been quite decent in the last couple of years."
"The only issue with ITC is it is best not to celebrate too soon, let us see how the business performs over a period of time...So although it's a great thing to see a stock moving up and down, but we should not celebrate too early, I would say," he further said.
Onkar sounded similarly cautious on Zee Entertainment stock, despite the upcoming merger with Sony. "We have to wait and see how the synergy of Zee's content and synergy of Sony's content and online platform play out...In mergers, it remains to be seen how much capital is being used to attract new customers," he said.
On being asked about Hero Motocorp, Onkar said his group has placed their bets on the two-wheeler space in India. "We have exposure to both Bajaj and Hero Motocorp," he said, adding that both look "positive" in the longer term.
"There might be cyclical downturns in between, but as long as the core business works and distribution reach remains strong, it will be positive," he further noted.
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