In an interview to CNBC-TV18, Prakash Diwan of Altamount Capital Management shared his readings and outlook on specific stocks and sectors.Below is the verbatim transcript of Prakash Diwan’s interview to Latha Venkatesh & Sonia Shenoy.
Latha: You have been longer fan of Tata Motors and a close watcher of the other stocks, your take. Buy anything, sell anything?
A: To be honest Tata Motors and Tata Consultancy Services (TCS) are the two companies that remain fairly out of this flutter of sorts for the simple reason that Tata Motors didn't have any major restructuring that is still in the offing or there is no work in progress of sorts as much as you have in Tata Steel or even in Tata Global Beverage which has started talking to investors. This is the first time that they have stepped out and meeting up with analysts and investor community. So, there you could probably see a little bit of a setback or pushing back of some of the reforms.
However, TCS is fairly independent. I don't think they ever had any issues in terms of autonomy to operate. What is now going to be critical is whether they decided to get a family member as the next chairman or a professional in and that could mean that the change would still continue. It is just a little bit of a pause in the whole process.
Latha: The names doing the rounds are Indra Nooyi and Noel Tata.
A: It doesn't make sense why Indra Nooyi would want to leave Pepsi and move into this on a more dedicated role or something. There could be possibilities but I am not too sure whether that makes logical sense but what is important is that the group needs to articulate like the way they have been so proactive on this thing and what is the criteria for selection because remember last time around it took ages for them to identify the incumbent. So, if that doesn't happen at least the confidence would get restored.
So, I would buy into Tata Motors if this were to be a sentimental hit. I would buy into TCS also now because you are getting a more fair value out of a reason which is not fundamentally driven though of course a lot of people are still staying out of IT, but stay out of Tata Steel for the time being because that is going to be impacted in a slightly more critical way.Sonia: Any thoughts on ICICI Bank, if one hasn't really allocated a lot to ICICI Bank, is this the time to do so?
A: It might sound a bit late given the kind of sharp move but it has always been playing catch up with the other corporate facing banks. So, the kind of turnaround that seems imminent in the core sectors of the economy very clearly will benefit and remember one thing, what has worked as steroids is the I-Pru money that has come in. If PNB Housing Finance gets the kind of response, if the anchor book subscription is anything to go by, ICICI Home Finance will also be a big valuation trigger for them.
Generally, there is whole change in mindset that the corporate facing banks are the ones to bet on because the upside is much more and 1.5 book is not historically anywhere even close to an average. And they have always been very comfortable about 2-2.2 kind of adjusted price to book value ratios. So, there is enough headroom there. The only cause of concern could be if the numbers don't kind of fall in line with the turnaround sentiment that we have already started seeing in this quarter - that could again make people rethink. So, that is where I would want to wait. So, go long with a Put option to go with but it has the makings of a turnaround very clearly.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
