There's still scope for deep value trades: Nischal Maheshwari

SBI is right up there and there are a lot of stocks like it which are available very cheaply out there. People have to start looking out for value, says Nischal Maheshwari, CEO, Centrum Broking. Excerpts from an interview with ETNOW.Do you think the bombed out levels in the market are over and large deep value trades are no longer available?I do not think so. There is a lot of value available. One of the names which we have been pushing is SBI. State Bank is right up there. It is available at 1.2 times core adjusted book. If you look at it, there are lots of triggers. Basically, they are going to list at least a couple of their subsidiaries -- the card business, the general insurance. Plus, the last two quarters has shown very stable asset quality. There are a lot of stocks like this which are still available very cheaply out there. People have to start going and looking out for value. You are confident that the NCLT issues would be sorted or you like SBI because ICICI Bank and HDFC Bank have run up and now SBI has to catch up?I do not think so. One catch-up is definitely on the card. This kind of a discount should not be there but if NCLT happens, the largest bank of the country would be the biggest beneficiary of that. So that is another trigger for SBI. But valuation, asset quality, stability, monetisation of assets -- a lot of triggers are out there. These are enough arguments for SBI to be a top pick among the corporate banks.We will be eyeing the auto sales numbers and that is likely to see a pop purely on the back of the festive sales. But where do you stand when it comes to autos?On auto, my stand has been very clear. We prefer two-wheelers, four- wheelers and then CVs. If you go back in history, you would see that is the way recovery always happens. The lowest ticket item will start getting bought first and that is going to be the two- wheelers. We have seen a good jump as far as two-wheeler sales is concerned. On commercial vehicles (CVs) I am yet to ascertain whether these are just bunch-up sales or if this is going to sustain. I would keep my fingers crossed. CVs are at least a couple of quarters away when the full recovery happens.There is a view that tight liquidity continues to remain a risk for some of the mid-sized NBFC players. Most market experts remain very selective within this space picking out the men from the boys. What do you like among the NBFCs?At the moment, it is better to avoid the stocks where there is high exposure as far as real estate is concerned. But mortgage is one thing which we should be looking at. Secondly, we prefer asset financiers like Sundaram and Chola and that is where our preference lies in the NBFC space. At the moment, we are avoiding wholesale NBFCs which have got large exposures to real estate. Before the whistleblower report, everyone thought Infosys will not do anything wrong. It is the bluest of the blue chip and has the most pristine corporate balance sheet. But now question mark has been raised there. In hindsight, will the current decline in Infosys turn out to be a great buying opportunity?As a business, I agree this could be a great opportunity to buy it. But this is the second instance of that happening and it is being taken seriously by the board. I believe there will be several of these whistleblowers which must be coming and they must have looked at it and just cast it aside, saying that there is not much meat to it. But this is the second time the board has been involved. Somewhere we have to start seeing that basically it is a great management but somewhere there is a problem at least in the systems and procedures. Why is it not happening in TCS? It is an equally large company and as democratic as any other company could be. That is where the issue is. Is Infosys’ corporate governance as strong as what all of us believe? That remains my main worry.

from Economic Times https://ift.tt/34bnTtU