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    Why Hemang Jani prefers IndusInd to Axis; betting on 4 QSR and footwear stocks

    Synopsis

    “With a 1.4 times price adjusted book, 25-30% kind of growth, IndusInd Bank is far better placed compared to an Axis Bank at this point of time. Among footwear names, we like Metro Brands and Campus. We also like QSR stocks like Jubilant Food and Devyani International from a medium to long term perspective. ”

    Hemang Jani-NEW1-1200ETMarkets.com
    “Given the kind of developments on the European side, Tata Steel is facing a lot of challenges even in terms of their operations, having seen a peak cycle in the last two years. This kind of a mild recession would provide a good shorting opportunity in some of these metal companies from a short-term perspective,” says Hemang Jani, Equity Strategist & Senior Group VP, MOFSL

    What are your top house buy calls right now?
    We have initiated coverage on the footwear names and we continue to like Metro Brands and Campus. Apart from that, we have been liking some of the QSR names. That is a space which will continue to rise in a major way both from a medium to long term perspective. Jubilant Food, Devyani are the QSR stocks we like.

    We have been liking hotels. Lemon Tree Hotels both in terms of earnings and in terms of expanding their reach through management contracts are very well placed.

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    Also, consumption-focussed companies and to some extent, banking is something that we like and if there is any short-term correction, we will definitely be very positive on banking.

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    Which is one stock you would go short on? There is an impression Motilal Oswal is always bullish; it is not true, right?
    What happens is that from a technical perspective and for people who are looking for the short term, we will always have some ideas and strategies on the short side but by and large, a large number of the retail investors are typically people who just buy and hold and do some stuff.

    So the perception is that generally people on the brokerage side will sound bullish and they will not have short calls. But that is not true because now with the options market coming up in a big way, people are using that and many new retail investors also try to start their journey through the options market.

    Coming to your point about what to short, some of the metal companies are where we could definitely look at shorting. Given the kind of developments on the European side, Tata Steel is facing a lot of challenges even in terms of their operations, having seen a peak cycle in the last two years. This kind of a mild recession would provide a good shorting opportunity in some of these metal companies and we could look at shorting from a short-term perspective.

    What is it that you are working with for HCL Technologies in particular after having looked at what TCS delivered?
    We are looking at about 3.5% constant currency revenue growth and we do think that the margin would be relatively muted quarter-on-quarter. What matters is what sort of deal wins these companies are suggesting because TCS and many other companies, from an earlier stance which they had about strong deal flow pipeline are sounding a little more cautious in terms of the clients taking more time to give them orders and stuff like that.

    Those are the things that the market will be focussed upon and depending on the overall growth the market is working with. We think that the current numbers could not be truly representative of what price action is going to follow as it is clouded by what is going to happen in the next one or two quarters.

    Where do you stand when it comes to the financials, particularly the comparison between IndusInd and Axis?
    Both are doing pretty okay but in terms of valuations and growth potential, recently the CEO of IndusInd Bank made a presentation about what sort of growth they are looking at. Their body language and overall growth in terms of advances and overall net interest income etc is far higher than most of the other private sector banks, So with 1.4 times price adjusted book, 25-30% kind of growth, IndusInd Bank is definitely far better placed compared to maybe an Axis Bank at this point of time.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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