Sandip Sabharwal, asksandipsabharwal.com, says “unlike some of the other managements on the two-wheeler side who continue to talk bullish when things were bad, the Bajaj Auto management used to point out at that time that market conditions are not as great. And now they are talking of a strong growth outlook. So I think one has to take it credibly and the outlook thus improves for the stock as well as the company.”
Do you think the risk reward continues to favour Bajaj Auto given their quarterly performance?
It does, because of the fact that the management is very credible. So when they talk of things like potential improvement in overseas as well as domestic sales, a good momentum in the festival season, as well as a pickup in the three-wheeler segment, which traditionally used to be the most profitable segment for them, we need to sit up and take notice because that indicates that the overall outlook looks good.
Unlike some of the other managements on the two-wheeler side who continue to talk bullish when things were bad, the Bajaj Auto management used to point out at that time that market conditions are not as great. And now they are talking of a strong growth outlook. So I think one has to take it credibly and the outlook thus improves for the stock as well as the company.
We want to understand if all the bad is already baked into the underperformance that we have seen from Kotak Bank or even from HDFC Bank. Should you now look to add positions at these levels in both these names?
In HDFC Bank specifically, we will see further compression in margins. They still have some issues to grapple with in the context of the merger and what it leads to. For Kotak Bank, it is not an issue of their performance.
It has always been an issue of how overvalued they got and now the valuation is coming back to levels which are comparable to other private sector banks. Once that entire process is completed, Kotak will be something to look at. It is still much more expensive than many of the other private sector banks.
