Prakash Diwan: Expect to see a catch up play on M&M from tractor side

Diwan believes Kotak Mahindra Bank has been cautious.

“Probably the market reads that, it is a bit of overcautious. That could essentially change the way the bank would probably be perceived as Axis Bank or ICICI Bank which has been doing much better. So there is a lot of money that is moving out into high-growth, visible businesses rather than Kotak which could probably be in a sideways for some time. There is going to be some anticipation that the screen is telling us.”

On Reliance Jio, Diwan said, “They have lost some ground on the bottom of the pyramid segment and very clearly the market is not stratified. I think Jio is trying to make sure that it continues to clock some subscriber addition even if it is from the low cost or low revenue users because that is one way that they can probably broad-base their offering and start getting much more efficient. It does take away the price hike possibility or defers it for some time and that is one negative impact especially on Vodafone Idea which is very clearly hinging on that, so I would stay away from that. Bharti Airtel has its own plans which are falling in place.”

Speaking on telco subscriber additions, Diwan said, “Continuously for three months in the last quarter we saw that subscriber addition was much lower than the run rate than Jio had clocked and this probably helps them make a comeback though the revenue might not be very majorly impacted immediately.”