As the electric vehicle (EV) space continues to gain momentum, the stocks in this sector along with a few others, including HDFC Bank, ICICI Bank and Eicher Motors, will remain in focus for him and his firm, said Dhiraj Agarwal, Managing Director of Ambit Capital, in a recent interview with CNBC-TV18.
Emphasising the scope of EV and banking sectors, Agarwal shed light on some key investment themes and potential opportunities in the market.
With increasing awareness about environmental sustainability and the push towards cleaner energy solutions, EV companies are expected to witness a surge in demand, presenting an attractive investment avenue.
“EV conversion will keep on increasing, somewhere slow, and somewhere fast. I would continue to invest in EV and look for EV investments, he said,
Eicher Motors, known for its flagship brand Royal Enfield, has been a prominent player in the automobile sector. Agarwal highlighted that he views any market dip in Eicher Motors' stock price as an opportunity to accumulate shares, considering the company's strong brand presence and growth prospects.
“I would buy Eicher Motors on the dip,” he said.
Shifting focus to the banking sector, Agarwal expressed optimism regarding ICICI Bank's potential for re-rating. As the Indian economy continues to recover and business activities gain momentum, financial institutions like ICICI Bank are likely to benefit from increased lending and improved asset quality.
“I think there is further scope for re-rating. It will not be as sharp as what we have seen in the initial part of the re-rating,” he explained.
Discussing another banking giant, HDFC Bank, Agarwal acknowledged that its valuation, which might have been considered stretched earlier, is now more favorable. The current juncture presents an attractive entry point for investors eyeing a solid performer in the banking sector.
When posed with a choice between ICICI Bank and HDFC Bank, Agarwal disclosed his preference for ICICI Bank. He cited the potentially higher growth trajectory and better re-rating prospects for ICICI Bank compared to its counterpart.
“Valuations of HDFC Bank are no longer as stretched as what it used to in the past. ICICI Bank’s consistency of delivery is absolutely outstanding. Between the two if you would force me to pick one, I will say ICICI Bank,” he mentioned.
Commenting on the broader market sentiment, Agarwal recognized the recent fantastic performance of the market. Despite occasional fluctuations, he remained optimistic about the overall outlook, attributing it to various growth drivers and positive economic indicators.
“Markets had a fantastic run. A little bit of a sideways consolidation here is not completely unwarranted. But overall outlook continues to be good,” he said.
Addressing the fast-growing food delivery and restaurant aggregator company, Zomato, Agarwal reaffirmed his positive stance on the firm. As consumer preferences continue to shift towards online food ordering and dining experiences, Zomato is poised to capture further market share.
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(Edited by : C H Unnikrishnan)
First Published: Jul 24, 2023 12:33 PM IST
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