- Wealth PMS (50L+)
I was featured in ET Now on Wednesday, on a show with Ayesha Faridi and Nikunj Dalmia at 1:20 pm yesterday, talking about a few stocks.
I talked about a few CAPM Portfolio stocks such as:
Note: These are Capital Mind Premium portfolio stocks, which we have bought and mentioned to Capital Mind Premium members.
A quick summary of the discussion (I don’t have the video yet)
Q: Do you think 7500 is a barrier for the market?
Me: It’s too close to an all time high to believe this is a top. Keeping the price perspective aside, if you look at the fundamentals, there’s nothing that tells us it ends here. The new government in in, we have a budget coming up, and everything’s looking up. Hardly any reason to believe markets will stop here.
Q: What do you make of RBI Policy of going with the status quo?
I think status quo was expected and the only thing significant was the RBI’s allowance of speculation in currency trading by FIIs and domestic corporates, which they have earlier disallowed from doing so. $10 million is not a lot, but it’s a start. It’s also credit to Dr. Rajan that they have clarified monetary policy enough that the rate status quo was almost universally expected. At Capital Mind we expected an SLR cut, but that’s also a long term process of reduction that was due to happen.
Q: You seem to like BEML, Astra Microwave? The FDI in defence?
Yes, the FDI in defence is a big thing there. BEML is more of a defence plus railways play, since they make metro coaches. But the FDI in defence, and the fact that the new government is likely to push these sectors more is going to take these stocks to the next level.
Q: Sintex has had problems of late with promoter’s creeping acquisitions, FCCB reissuance, the slowing monolithic business and the big debt on their books. What do you make of that?
The FCCB piece is interesting. The conversion price was Rs. 75 and that has recently been brought down to Rs. 65. The stock trades at Rs. 80+ (now actually Rs. 96) so it’s quite likely they convert to equity. That will take $140 million, or about 800 cr. off the debt load.
The company has a good CSR initiative, and with things like the recent attacks on women, their portable toilets are an innovation. Their custom moulding divisions will do well with the recovery in France and the US. They have had trouble with government payments in their pre-fab business (where they make schools and stuff) but that should get better with the new government. The point is that they’ve got a good diversified product portfolio and the push in infrastructure is going to help all their businesses.
Q: Any Disclosures?
You should assume that all the stocks mentioned are owned by us, so we’re biased.
I’ll post the video if I get a hold of it. Transcript is not exact, I’m just writing from memory.