Why Rahul Shah remains bullish on these 2 sectors
ET Now|
Jan 24, 2018, 10.10 AM IST
Talking to ET Now,
Rahul Shah
, AVP,
Motilal Oswal Financials
, says betting on commodities and aviation sectors.
Edited excerpts:
Why are metal stocks moving the way they are, is it pure momentum or is this optimism centred around global growth?
Both the things. One is momentum which we have seen in the entire markets and the sector has done quite well since last one year and which will continue to do well. There are also flows in that sector. The optimism and the prices in commodities make me think that in near term, there is not going to be any pressure in the stocks. In case it falls in the near term, that will be an opportunity for investors.
Do you have a view on RBL Bank?
RBL Bank numbers were quite okay. Though the NPAs were higher, the operative performance was quite good. So I think numbers were good, growth was a consistent 28% which was in line with our estimates. We would recommend adding the stock in your portfolio.
For the entire aviation sector, load factor is clearly not a problem. Also in the quarter gone by, you have seen the peak holiday season too but do you think the fact that crude prices are already nudging that $70 per barrel mark and the fact that crude has been on an uptick for the entire previous quarter, could be a niggling factor?
I agree that could be the niggling factor. The most important thing is the load factor. In Interglobe or Jet or all the aviation stocks, the load factor is improving month over month. I believe that the most important factor is that. Second, obviously crude has gone up and in the last entire quarter, that might be a little bit of worry but that should negate against the load factor. I do not see a near-term challenge in aviation performance.
Are the West Asia problems going to be the key monitorables for Biocon? Irrespective of all the approvals and the tie-ups that we have seen for biosimilars for Biocon, what else would you keep on your radar in terms of their quarterly performance?
The most important thing is obviously the commentary and West Asia developments also. We had the runup in the stock where vis-a-vis the entire pharma as a space and the valuation it is trading at, we will not be comfortable in adding the stock at the current levels. The risk to reward is not going to be favourable. One should exit from the current levels in Biocon.
Edited excerpts:
Why are metal stocks moving the way they are, is it pure momentum or is this optimism centred around global growth?
Both the things. One is momentum which we have seen in the entire markets and the sector has done quite well since last one year and which will continue to do well. There are also flows in that sector. The optimism and the prices in commodities make me think that in near term, there is not going to be any pressure in the stocks. In case it falls in the near term, that will be an opportunity for investors.
Do you have a view on RBL Bank?
RBL Bank numbers were quite okay. Though the NPAs were higher, the operative performance was quite good. So I think numbers were good, growth was a consistent 28% which was in line with our estimates. We would recommend adding the stock in your portfolio.
For the entire aviation sector, load factor is clearly not a problem. Also in the quarter gone by, you have seen the peak holiday season too but do you think the fact that crude prices are already nudging that $70 per barrel mark and the fact that crude has been on an uptick for the entire previous quarter, could be a niggling factor?
I agree that could be the niggling factor. The most important thing is the load factor. In Interglobe or Jet or all the aviation stocks, the load factor is improving month over month. I believe that the most important factor is that. Second, obviously crude has gone up and in the last entire quarter, that might be a little bit of worry but that should negate against the load factor. I do not see a near-term challenge in aviation performance.
Are the West Asia problems going to be the key monitorables for Biocon? Irrespective of all the approvals and the tie-ups that we have seen for biosimilars for Biocon, what else would you keep on your radar in terms of their quarterly performance?
The most important thing is obviously the commentary and West Asia developments also. We had the runup in the stock where vis-a-vis the entire pharma as a space and the valuation it is trading at, we will not be comfortable in adding the stock at the current levels. The risk to reward is not going to be favourable. One should exit from the current levels in Biocon.
