Sun. Jul 21st, 2024

Before elections, Modi had announced almost Rs 9-10 lakh crores of infra projects. Now what is happening is that if we have seen that if he can do that in a month’s time, I believe that the same kind of fervour can be unleashed in the coming month and the 100 days I think is a longer window that Modi is giving himself because he has got various other things to also get along, including the budget that comes, says Vinit Bolinjkar of Ventura Securities

We saw it was a heavy action week in terms of political drama, what happened the whole week and of course, a big event to look at. But then the kind of brokerage notes coming in, especially CLSA also mentioning the government’s 100-day plan to include large orders on infra, defence, how to tread all this? What to make out of it? Will this help restore confidence or we will actually have to wait till budget and there can be volatile moves coming weeks again?
Before the election fervour started and the elections were announced, Modi had announced almost Rs 9-10 lakh crores of infra projects. They were either started or announced. Now what is happening is that if we have seen that if he can do that in a month’s time, I believe that the same kind of fervour can be unleashed in the coming month and the 100 days I think is a longer window that Modi is giving himself because he has got various other things to also get along, including the budget that comes.

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So, I believe that with the RBI having given the government more than one lakh additional surplus, I think there is a lot of room for manoeuvre and to announce all these projects. And the government has also been inviting foreigners to invest in India, what we call patient capital. So, all these efforts can significantly ramp up power, railways, defence obviously and today in the conference which was held by the RPG Group, they said there are two sectors whichever incumbent government comes will always keep in prime focus, that is power and railways because there is huge demand. So, we can safely say that power and railways are the sectors to be long. And I think here, the Adani Group, the transmission tower companies, the transformer stocks and all the allied services all are expected to do well.

In fact, NTPC is going to sign close to 9 gigawatts of orders in renewable. Currently they have only a small portfolio, which is not even one gigawatt. So, all this coming online, I think some of the bets to be taken. I think one of the significant multibaggers could be NTPC because they have a vision to do almost about 60,000 gigawatts of renewable power in addition to the 70 gigawatts of coal power that they have, fossil fuel.


Let us talk a little bit more on the fundamental side and let us talk about a sector that has been the only sector to end this week in the red. I am talking about Nifty PSU Banks. Earlier in the year, we had a lot of bullish voices coming out on the PSU front, preferring that over the private banks. Do you think that tide is changing for the entire PSU bank space and would you now favour private banks over PSUs?

So, a brutal reminder of the last coalition government was the PSUs which were reduced to absolutely bankrupt companies. And going into a phase where again, we have a coalition government, market did not really like that. So, there was a sharp churn from PSU banking stocks towards the private names.

And what was more important is that the private banks had their own set of problems which they are now coming out of. So, there is a virtuous cycle which is set up for the private banks to do better. And we will see that play out.

And in the meantime, I expect the PSU banks to slowly start coming back. But the valuations out there will be slightly dampened because of this coalition threat. Again, we have to understand that the PSU banks are very-very cheap. So, the likes of Canara Bank, BOB and PNB, all are trading at one time adjusted book. So, I believe that they offer you great investment opportunities, but I think it would come with a little lag.

Now, we have hit a pause, as in we have maintained the rates in the MPC meeting today. ECB, on the other hand, has gone ahead and made its first rate cut in five years. Now, we have the FOMC next week. What are you projecting on that front? Street is largely saying there is going to be no change, but what is your view coming over here and also a very interesting thing that happened today is RBI has upped the GDP growth target from 7% to 7.2 for FY25. Do you think we are well-placed to achieve that number?

I definitely think that our growth momentum will sustain and RBI has been quite conservative in what they have been dishing out. So, keeping that in mind, I do not think the rate cut in India will happen, given that we are still above the 2 to 4 band of inflation. Until we do not get inside the band and we stabilise for a month or so, I do not see the RBI cutting rates with India. As far as the US is concerned, there is a very high chance that at the FOMC, we will see the stance change more than a rate cut being announced but the rate cuts could come in future meetings.

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