homemarket NewsSee depth of market increasing; midcap IT warrants some caution: Dimensions Corporate Finance
See depth of market increasing; midcap IT warrants some caution: Dimensions Corporate Finance
This phase is much better because we have got a lot of new names being added to this market and the depth of the market is going up, said Ajay Srivastava, CEO of Dimensions Corporate Finance Services, in an interview to CNBC-TV18.
This phase is much better because we have got a lot of new names being added to this market and the depth of the market is going up, said Ajay Srivastava, CEO of Dimensions Corporate Finance Services, in an interview to CNBC-TV18.
Srivastava said, “The beauty of this market is that the depth of the market is going up. Your choices are going up, new age stocks are coming in, your old age stocks are doing well; chemical stocks also are doing well. Also, we have got our real estate company coming in. So, this phase of the market, I don't think we have ever seen this kind of new companies coming in, taking up a lot of liquidity but still keeping the old secondary market intact. I think, it is a new phenomenon. We have got to adjust to it.”
On midcap IT, Srivastava said, “Midcap is one space, which I think warrants a little bit of caution. I know there is rush of money into the stocks, whether they will capture the same glory as the big mega guys, I am not so sure about that. So just looking at a longer-term perspective, one can argue that 40 PE is good or bad, because Indian companies, by and large are subject to rupee-dollar variation. But it is a safe haven for investors, because two things are very important in these companies- one, no fresh capital is issued in these companies, two, buybacks and dividend policies are extremely aggressive. Therefore, you will keep getting cash back as investors. So even if company’s growth is not so high, you will keep getting cash flow back as an investor.”
When asked about Bharti Airtel, Srivastava said that he owns the stock. He believes it to be a great story. “At Rs 750, it is a great story. Personally, I own the stock. I think it is a great story and the reason is that you cannot wish away telecom from our lives today and therefore, the top two companies in this country will gain momentum, will earn money and the price increases are just starting to take place. So, forget the past, I think if you need to buy stocks in this country, you cannot not buy that company which connect India and whether we like it or not, fit in Jio and Airtel, they divide the pie in terms of connecting India. Buy into the stock, yes sure, the price may come down eventually, market always gives you opportunities. Prices do come down, markets correct, but that gives you an opportunity to buy more,” he mentioned.
On Zee Ent, he said, “The path is very clear that this company is going to give up its legacy status, legacy control, whether it is now or in a three months or six months’ timeframe, that is very clear. Now, the question is whether the momentum will continue on the earnings side. That is where I have a doubt, given the whole clutter in the space of OTTs, programmes, channels, cinema is going to come back as well, whether they will keep getting the pie that they got for advertising remains to be seen. That is where I have a doubt and therefore, I am not a buyer of this share. But ofcourse, there was an opportunistic buying taking place, but I doubt that it will ever regain its momentum in terms of advertising pie share.”
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For full interview, watch accompanying video.
(Edited by : Dipika)
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