Medium to long-term, I continue to be bullish on India: Abhishek Basumallick, Intelsense Capital
In the PSU basket, I like those companies where being a PSU helps them.
- Why Gautam Shroff is betting on Tata Motors & Motherson Sumi
- It is far better to invest in boring businesses than constantly walking on minefields: Nilesh Shah, Kotak AMC
- Stick with big, quality players rather than looking for value: Aashish Agarwal, CLSA
- Sanjiv Bhasin prefers pharma to IT, has outperform on 3
This AGR issue has made a lot of investors in the market nervous. The amount of dues and the telecom companies have and the amount of debt some of these telecom companies have with the financials, is probably why financials are coming under pressure. How are you analysing things?
It is a very precarious situation we find ourselves in and for the overall national interest, it is very important to have thriving mobile connectivity as well as broadband service for the development of the nation. There are lots of ramifications down the line. A lot of businesses depend on the quality of connectivity and things like that.
It is in national interest to have a good mobile connectivity and broadband set up. Now with these kinds of debt burden, regulatory verdicts are becoming very uncertain and there is a space for the government to come in and clarify its own position in terms of how it is going to see the policy going forward.
Right now, a lot of things are unclear and being left unsaid and that is adding to the uncertainty of investors about telecom companies as well as in banks which have outstanding receivables from these telecom companies. It seems that it is much more widespread than initially we thought it would be. We need to figure out what is going wrong and how big this problem could become.
What is your call on the entire PSU basket? Is there any category of PSUs which you like more than others?
I am pretty much positive on PSUs primarily because there is a large dividend play in most of the PSUs and knowing the fiscal situation that the government is in, I think the dividend yield is going to be consistent with what it has been over the last few years at least for some of these larger PSUs.
Out of this basket of PSUs, I like those where being a PSU helps them. So, a company like REITs or Shipyards or BEL are companies which benefit from being PSUs. Those are the areas which are worth looking at. Obviously, one needs to do their own homework and due diligence before putting money in. Those are roughly the pockets which look interesting to me.
What are the areas you are nibbling in? Medium to long term, how are you building portfolio?
I do not have a short-term view. My medium to long-term view over India has always been slightly on the bullish side for the last one one-and-a-half years. I am looking at stocks which can grow reasonably well over the next one and a half-two years where valuations are not very challenging. I am looking at quality companies within that space.
We are looking at domestic pharma and some of the areas which would benefit from government spending as and when it happens. We are also looking at specific real estate plays, especially on the commercial real estate side and large engineering companies, some of which are fairly overvalued. But we are keeping tabs on companies like Siemens and ABB. They are on my watch list but not buying as of now. Overall, domestic pharma has quite good valuations and are worth looking at. That is basically what I am doing right now.