Do you think that irrespective of how wobbly the world is going to get, India will continue or outperform?
I am just back from Chicago and I was witnessing back to school purchases by US consumers and it is phenomenally strong. Whether you talk to an Uber driver or a CEO – both are very confident. If an economy is that strong or at least has the confidence, there is this goal to bring down demand so that the inflation comes down.
On the other hand, Europe is a completely different story. It is a weak economy, etc. Against this backdrop, we have to see what happens to Indian companies. Most Indian IT companies are less correlated with American IT companies. Still by the same trade, there is some amount of weakness.
But some pockets like chemicals including specialty chemicals and agrochemicals will continue to do really well. Consumers on both sides of the pond still seem very strong – whether it is durables or staples.
If you were to be invested in the multiplex space, would you be a buyer in PVR?
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Both PVR and look good. I guess yes it is PVR because irrespective of their individual plans, once it is a merged entity, the usual things of under penetration, smaller towns and all that logic still holds good. Content is a cyclical thing and if they have the majority of the market share, PVR as a company and stock will continue to do well.
What are your top three holdings and how have you changed them in this market volatility?
Holdings are still geared towards specialty chemicals. SRF is among the top holdings. All the companies in the specialty chemical space – Deepak Nitrite, PI Industries, Coromandel are the companies in which I think we have significant holdings.
If you look at a company like SRF, it is broad based in the space and now is looking to double its asset base over the next three or four years. The talks about not just the confidence of the company but the growth rates that the industry has to offer for the other players. The better players will capture greater market share, They also have very strong export outlooks. So it is a combination of both the growing markets plus exports that is keeping us in these stocks.
What is your view regarding the entire auto pack, specifically , which is very excited today. What are your top bets within this space and is there any specific stock that you would want to flag out?
The entire auto space looks very good. If you look at not just the numbers, the demand in the higher luxury end – which does not exist except for maybe
and that also not domestic luxury demand – is strong. Demand is also strong in the lower end because being a services economy, India is all about opening up and people want transportation. That will translate into higher sales of two-wheelers and low-end cars.
Against that backdrop,
, still look very good. Ashok Leyland, in the CMV segment, is picking up pace. Manufacturing has hardly grown about 2-3% over the last three years. When manufacturing starts growing again, then commercial vehicle sales is an essential component of that.
Is this a coincidence that suddenly excepting , all Tata Group of stocks are doing a cartwheel?
They are all doing phenomenally well, in terms of not just the stock price but in terms of their financials also. A company like
has reduced its debt by a few billion dollars over the last one and a half years. Tata Consumer has transformed itself from a few product company into a broad-based product company.
Tata Motors, of course, is a global company in the true sense, catering to different ends of the market. So, the list goes on. The companies have all done phenomenally well, operationally and strategically in the last few years and now are reaping the benefits of their solid management actions.