Sudip Bandyopadhyay on stocks that can still give multibagger returns

“ I have been holding a lot of MNC stocks and they have given me multi bagger returns. Some of them like Castrol, Elantas Beck, small MNCs have given multi bagger returns. Recently, I got good returns from some of the tried and tested names like ITC, L&T and VIP Industries, saysSudip Bandyopadhyay, Group Chairman, Inditrade Capital.”

ET Now: With the oil ministry sources saying that OMCs must be given space for recovery, what does it spell out for them considering that we may see crude oil prices languishing at these levels for some time?
Sudip Bandyopadhyay: Two things -- one is if you are looking at the international scenario, crude oil prices are down and are probably going to remain where they are. It may even slip further. The main reason why all this is happening is predominately due to what is happening in China. There has been a lockdown in one of their largest provinces Chengdu and also because of the slowdown in the Chinese economy, the Chinese demand has come down and it is expected to come down even further.

Now with that happening, the overall demand pressure eases at least till the winter sets in as far as Europe and the US is concerned. Till that time at least, we will get some relief. During this period, what I understood from the statement which is coming and the commentary which your colleague was reading out is that the OMCs and the other upstream and downstream companies had been taking some hit because of oil prices moving up and the prices not going up to that extent in the domestic market. So the government is going to give them some time where they can benefit from the global oil prices coming down and domestic prices not being brought down proportionately as that will give them some space.

While it is music to the ears of OMCs and other oil industry companies, for the consumers and the industry, it may not be good news but having said that, I will still say that there will always be pressure on the OMCs and the other constituents to reduce the price at some stage which will benefit industry and consumers in general.

A couple of industries which I will like to flag off and which will definitely benefit and are already benefiting in a big way are aviation fuel and the aviation industry. Some of our companies which are listed like IndiGo, are procuring a lot of aviation fuel from abroad and the aviation fuel prices have definitely come down.

Now one must remember that close to 50% of their operating cost is aviation fuel. Now aviation fuel prices are coming down and definitely helps these airline companies to a great extent. So, airline companies are directly a beneficiary even without Indian OMCs not reducing prices to the extent they can.

Goldman Sachs report talked of oil at $200 and Citi report at $60. Now Citi has got it right, Goldman Sachs got it wrong?
Well I think during your long and illustrious career you have read multiple reports on oil. I remember some time back, Goldman Sachs came with a report of oil at $150, you are talking of some report which talked about $200. We have seen this getting played out. Whenever oil prices start going up, some of these reports come where obscenely high levels are predicted; when it goes down, some of them start predicting a dismal scenario for crude oil. I would not put too much emphasis on these reports.

These reports are prepared at a particular point in time looking at a particular set of happenings which may or may not happen. As we know, markets are volatile. The recession fears and slowdown fears are playing havoc with crude oil prices. Yes, there is a problem in Europe, we all know that but this recent crash is on the back of what is happening in China, multiple lockdowns in large provinces, genuine economic slowdown, challenges as far as the future is concerned and China is probably the largest consumer.

So something happening in China which significantly reduces oil demand will definitely have a significant impact on oil prices. I think that is getting played out.

What is your view on ICICI Bank?
ICICI has done a tremendous job, the kind of turnaround the current management has shown is amazing.

People were really worried about ICICI Bank when this entire Chanda Kochhar episode happened and from there the way the bank has resurrected is amazing. Look at the last quarter results. They were outstanding, they did beat market estimates by a yard and look at their asset quality, loan growth, liability growth – all are industry leading.

Remember it is not a small bank, on top of the kind of bulk they have, to show industry leading growth percentages and asset quality improvement is quite something and they did that. I can say this having said that the momentum is behind them and they will continue to perform and outperform. There is still a significant track for them to move ahead even at current levels. that is what we believe.

Which is the stock that has given you multi bagger returns or which you think is going to be a future multi bagger?
I have been holding a lot of MNC stocks and they have given me multi bagger returns. Some of them like Castrol, I have been holding for a very long time and which gave multi bagger returns. I was holding on to a share called Elantas Beck and that gave a multi bagger return. In fact, I funded my son’s US education with Elantas Beck returns. These are very small multinational company shares which gave such returns.

Recently, I got good returns from some of the tried and tested names like ITC. I have made good returns by buying ITC at Rs 200-210-215 levels. I bought L&T at around Rs 1,300-1,400 levels and some of these stocks are really well established, pretty well structured and the story is well known. They have corrected significantly. VIP Industries is one stock I bought when it was down in the dumps one, one and a half years back and it made fantastic returns within a span of one plus year.

So, there are multiple stories and sometimes we get worried about the multiple and things like that but some of these stocks are really great businesses. When they correct, for an investor who wishes to take a little bit of risk, these are great buys.