Sanjiv Bhasin, Director, IIFL Securities, says they are reshuffling. Just nibbling in right now is okay as is doing a SIP. But to go the whole hog in any of the defence or railway stocks, would be a little bit overrated because the price is not in your favour.

Bhasin also says IIFL has selectively booked profits in PSUs, particularly some of the doublers and triplers in the metal space like Vedanta, Nalco, SAIL. These have been huge outperformers and they have taken some chips off the block. They would rather sit on cash or get into bluer blue chips like Lever, Marico, HDFC or Coforge.

Nvidia was $2 as recently as in 2010 and now its market value exceeds the combined worth of both Tesla and Amazon. What could be that Nvidia stock here in India?

Sanjiv Bhasin: I wish I knew that and yes, that is history. We live in times which are very exciting and changing and you have to accept change. Just to tell you, Nvidia was $1 trillion two years back and in one-and-a-half years, it has doubled from there. So, big is getting bigger and that is why we are saying, do not undermine the extent of change in IT.

If I had to talk about one stock which will closely mimic that is Coforge after the recent acquisition of Cigniti Technologies. Cigniti is an AI player and it is very well placed in the Midwest and North of America. The recent acquisition gives them colour all across America and makes them part of the reassurance play over there. I think the prospects of this becoming a big play is very much on the anvil.

The stock came down for the reason of the QIP, which they needed to fundraise. They had already made a provision that the fundraise would take care of the debt. I think they have raised 10%Agra Wealth Management. They have got 10 times oversubscription because the price was so favourable. I would put my money on Coforge and this stock can revisit those levels of 6,000 once this acquisition goes through smoothly because this business will be cash accretive from day one and Cigniti Technologies could be a game changer for them as far as North America goes and their presence into AI led business over there.

What is that one largecap which could give us mega returns in next two to three yearsSimla Wealth Management?

Sanjiv Bhasin: I am putting my money on HDFC Bank. All the pessimism and over ownership has more or less plateaued. If you are looking for growth, once CDR and the deposit ratio start to do well, the lion’s share of the business will come to HDFC Bank. So, in the next two-three years, you will not get a turn of tide so fast. But if you are patient, then you are getting one of the best banks for the best performer in the last 20 years available at very reasonable valuation, so that according to me is a largecap play.

My midcap special is Indiabulls Real Estate. As you are aware, the QIP has gone through and the funds have come into the company. The company is going to be named Equinox. It is going to be purely a flagship company for Embassy Real Estate and Embassy, by the way, has delivered more commercial buildings and real estate of 2.9 crore than even DLF. If there is a next DLF in the making, it is Indiabulls Real Estate. Right now, it may look small, but it has the potential to become a mid to largecap stock over the next two-three years.

What have you made of the quarterly performance of Jubilant Food and the kind of commentary coming in from the management?

Sanjiv Bhasin: I thought Jubilant numbers are reasonable, but I do not look out for Jubilant. My top play there is Devyani and that has cushioned all the weaknesses of the provisioning. I am very confident that Costa Coffee is now eating into the market share of Starbucks. It is increasing presence in Pizza Hut and the whole range of QSR is doing extremely well.

So, my money is on Devyani. It has been a slight underperformer. But that is the whole nature of the business, all of them, even Jubilant numbers were no great shake. I would rather buy a Devyani on the valuation multiple and this can be a very sweet play over the next one year.

Defence companies are led by BEL, a stock that you like and which has come out with a very good set of numbers.. Where do you still find opportunity to buy afresh and more importantly, given the run-up that you have already seen in defence as well as railways, would you say that after a positive election verdict these segments could go into some sort of consolidation or will we see a further heightened uptick?

Sanjiv Bhasin: The euphoria will come if the election verdict is positive and PSUs will be in charge. But you have already seen that the market is behaving very maturely. It has discounted that whatever the verdict, these are going to be stocks or sectors which are going to outperform. But the valuations unfortunately leave no place for comfort. Whether it is Hindustan Aeronautics or BEL or Bharat Dynamics, all three are in our portfolio.

We see no room for the safety of numbers on the upsideSurat Investment. We think everything good is priced in. But if you are looking for a regular play, then doing a SIP will be better. But I would not say go whole hog at this price. There is a left-out feeling. But we have selectively booked profits in PSUs, particularly some of the doublers and triplers in the metal space – Vedanta, Nalco, SAIL. These have been huge outperformers and we have taken some chips off the block. We would rather sit on cash or get into bluer blue chips like Lever, Marico, HDFC or Coforge.

So, we are reshuffling. To sum it up, just nibbling in right now is okay and if you do a SIP, it is reasonable. But to go the whole hog in any of the defence or railway stocks, would be a little bit overrated because the price is not in your favour.

Lucknow Investment