In an interview to CNBC-TV18’s Latha Venkatesh, Anuj Singhal, and Sonia Shenoy, Sandeep Shenoy of Pioneer Investcorp shared his readings and outlook on market and specific stocks.
Below is the verbatim transcript of the interview.
Sonia: The stock that could be on the rise today is Reliance Industries because of the announcement that they made of 72 million subscribers that have availed the Jio Prime Membership. This stock has been on a tear, but do you see a lot more upside from the current level?
A: It is probably one of the largest capex ever undertaken in India, maybe in the entire Asia-Pacific region. So, we have to just wait and see how it pans out on the earnings front. 72 million while it looks big for an industry upstart entrant, it may not sound that much of a music for somebody trying to extrapolate into earnings stream.
So, I guess we have to wait and watch for some time. However, nonetheless 72 million is decent percentage of Indian population and that is about it.
Latha: Are you positive on the stock itself, I mean it has seen a fairly decent run up, after all the index is looking for support from various sectors, will Reliance be one of them?
A: I would not want to pass a specific comment on any stock, but, yes, when a largecap stock generally morphs, of this size, something undertakes such a huge morphing of its entire business model, I guess it is just generally a long-term pain and long-term pain seems to be drawing to an end for this company.
So, yes, you could expect something, maybe a light at the end of the tunnel. As I mentioned, it is probably one of the largest capex ever undertaken and if this calculated gamble works out, you could be in for good times.
Sonia: The other thing that stands out in the data over the weekend is the way the tractor sales have done really well whether it is for Mahindra and Mahindra (M&M) or even for a company like Escorts that just announced its numbers. These stocks have seen a goodish bit of an up move, but do you still see a lot of value in this space?
A: I think tractor sales, I don’t know I may be in minority, but we may have jumped the guns out there because generally it has to be a post-harvest phenomena and we are seeing it in a pre-monsoon phenomena which may not be justifiable at the current levels. So, I guess we may have, the entire market may have jumped -- I am not saying the stock market, but the tractor market may have jumped the gun.
They may have been some pre-emptive buying out there, but for stock market, yes, it may be sensible or prudent to take some money off the table at the current level because I think the monsoon and the portents which are coming, may not be that good. So you could see some corrections which could turn out into decent buying opportunities for you in the next three to four months.
For full interview, watch accompanying video.
Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.
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