Sanjiv Bhasin bullish on 3 new age stocks for next 3 years; backs 3 auto stocks
Synopsis
"My dark horse play is IEX. You cannot have a trading platform which has 93% market share and lose trade at this valuation. I am looking at volume growing at not 10, but 12, but 15 times, maybe more in the next three years and the platform is brilliant. So, you cannot have a better play than IEX. Avoid the noise. This is the time to be in IEX and IRCTC, which are two brilliant blue chip businesses. "
Bhasin also says, “this is the time to be in IEX and IRCTC, which are two brilliant blue chip businesses. Now, the businesses can underperform for some time, but the longer-term story on IEX in power and IRCTC on railways is the best you can play on the Indian PSUs.
I am curious about your take on some of these new-age tech companies. For instance, Zomato has been in the news of late. How are you looking at the efforts on the path to profitability for a lot of these companies? What would be your picks?
Zomato, Paytm and PB Fintech are three stocks which are in our portfolio. We have been adding them in the last six months and we do not intend to do any short-term profit booking or trading in them. These are two, three, five-year ideas and I think there are miles to go before I sleep. You have seen a lot of the old hands change ownership here, which is very positive. But just look at the businesses of all three of them – Zomato, Paytm and PB Fintech. My advice to the retail investor is do not look at the lows because you will never be able to make an entry, look at the highs and then you will think that these are still businesses which have enough potential of giving returns.
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That is the power of restructuring the balance sheet, ownership change and the magic of midcap money which is being chased by mutual funds who have lagged in returns. And read my lips, the last seven months these guys were sitting on more than 7% cash and now with the left out feeling huge and humongous, they are chasing high beta ideas.
At this time, I am more bullish on largecap stocks. I am chasing the likes of LTIM, Reliance, Apollo Hospital and the largest banks, ICICI, Axis. Those are five of my big ideas here. If you have Suzlon, stay with it, but do not chase it at these prices where the stock has already tripled.
What has been your assessment of how things have shaped up within auto and what is it that you are pencilling in for the sales numbers?
We are on the threshold of a superb festive season. The rainfall has been rather splendid except for the month of August and rural incomes are now going to charge up some of the two-wheelers. Three names which we are holding and which we are advocating are: Maruti in passenger vehicles, Ashok Leyland in the CV segment and Bajaj Auto in the two-wheeler segment. All three in their categories are market leaders and will only gather momentum.
In the midcap segment, if you want, you can chase a Bosch closer to Rs 18,000 because in the OEM space, that is one stock which has pedigree and which has initiated and invested large amounts into semiconductor, the returns of which will be played out maybe into FY24.
Among power stocks, what is your top bet?
We have held REC, PFC for the last two years and we are not changing our view on both the power lenders. We have seen power distribution companies do the best and recoveries, particularly on state electricity boards, are the best ever in history. PFC, REC are in the best place ever on the lowest cost of funds.
Stocks Recommendations
My dark horse play is IEX. You cannot have a trading platform which has 93% market share and lose trade at this valuation. I am looking at volume growing at not 10, but 12, but 15 times, maybe more in the next three years and the platform is brilliant. So, you cannot have a better play than IEX. Avoid the noise. This is the time to be in IEX and IRCTC, which are two brilliant blue chip businesses. Now, the businesses can underperform for some time, but the longer-term story on IEX in power and IRCTC on railways is the best you can play on the Indian PSUs.