Any new interest in YES Bank will be a big positive: Chakri Lokapriya
Strong, steady new promoters needed for YES Bank as it lacks a strong promoter now.
On Sunil Munjal & Sunil Mittal showing interest in YES Bank
YES Bank is clearly a valuable franchise and it has a well documented bad loan book, weak loan book, lot of changes etc. From that perspective, a strong, steady share of new promoters is needed for the bank because right now it is a company which does not have a strong promoter behind it like it had before. From that perspective, any new interest coming in will be very positive for the company. But it clearly needs lots and lots of capital.
On capital raising at YES Bank
Capital is more important when you are starving and at first, you eat whatever you find, rather than wait for extravagant meal. That is the kind of cycle that many companies are at. YES Bank needs that kind of capital.
YES Bank could raise this capital easily if the price point is right. In terms of valuation, it is trading at about 06-0.7 times book. That is a hugely attractive number in terms of valuation. If there is a willingness on the part of the management to raise capital, clearly it would be very welcome for the market.
On IT Companies
We will continue to hold and buy Infosys, TCS and HCL Tech, more or less in that order. From an overall valuation perspective and the fact that there is good revenue visibility for the next 12 months, IT as a safe haven will continue to do well.
On Higher Beta Companies
True, we have been waiting for growth to come for quite some time now and that has kept a lot of people on the sideline in some of the cyclical sectors. Good news lies in the fact that all the cyclical sectors are beaten down in valuation. What is holding them back is the return to growth. Corporate tax cut will help all the companies, but will probably help stronger companies more.
On PSUs and Big Oil PSUs
Amongst the big countries, India is still a very big growth market for oil retailing. From that perspective, it is very hard for any player to match the distributor network and touch points of the oil retailing PSUs like BPCL, HPCL or IOC. If a foreign player tries to come in and build this network, it will take an immense amount of time. All that has a valuation attached to it and from that perspective, even at current prices or valuations, if there is a privatisation, then a huge amount of rerating can happen.
On whether the market is bottoming out
In terms of valuations, many of the sectors are trading at very attractive valuations. The corporate tax cut is clearly going to help companies across the board and it will help stronger companies more because it gives them more wiggle room to take additional market share. They can also cut prices at the expense of the weaker players. So moves like that is likely to benefit the stronger players and so that is partly the reason why you are seeing some of the leaders -- be it the paint companies or FMCGs -- despite trading at lofty valuations are still holding up.
As far as the weaker guys are concerned, the corporate tax cut is clearly good. Some of the moves by the government is good and now we have to wait for recovery which is at least a couple of quarters away. But, there is not much downside in the market.
On Auto Stocks
Life has come a full circle for Bajaj, from discontinuing scooters many years ago to coming up with EV launches. Clearly, the price points are likely to be higher and that means the adoption of subsidies will play a role here in terms of how much the subsidies help customers to make the purchases. But these are early days. So, positioning is key and of course, recharging is even bigger than ease of use. These are the two price points. Outside of that, for auto pack, the sales have been weaker than expected for the Navratri season. We have another few weeks left for the festive season and it looks unlikely that there will be any meaningful pickup in sales.