They have got a great deal and support from Voltas where they are doing different kinds of AC equipment. In the midcap space, what could be the next Dixon? Speaking of Dixon, I have a SME recommendation it is called Virtuoso.
Subsidiaries LTTS and LTI are also doing exceptionally well when compared to the IT pack and all this adds up to a very nice story around L&T. I think that business will also take off.
I believe that L&T is the best place to play this game and L&T could also be a major beneficiary of spending in the Middle East. After that, new projects would be announced with the government also upping their ante on the spend during the Budget. The infrastructure stocks are also going to come into their own because we are seeing some mega projects coming up for completion in the timeframe of ‘24-25. Do you think we are looking at a strong spell over the next two years? Absolutely and without doubt. The infrastructure stocks have been deleveraging their balance sheet and consistently been adding orders. so I would be a watcher on the stock rather than gung-ho about it. I believe this outperformance has been mostly done with. It is rallying on the back of the value-added steel rail segment, which they have got a sizable part of in their portfolio. In the worst of times it was around Rs 400 odd and it has put on a good 50% in terms of a rally. Anything which we are missing on because the metal index actually made a new high last week? JSPL has been outperforming the pack. JSPL and JSW are the two outliers in the metal space.
I believe one should keep a close tab on this segment but not to venture until the scenario clears completely.
The Indian economy has got substantial leverage plays which can really pan out across the length and breadth of the country and across the spectrum of sectoral allocations. If you choose China to reopen, then commodities should be bought.It is like a toss of coin? So where there is uncertainty, the best thing is not to step into those muddled waters. If you choose recession, commodities should be avoided. Where are commodities headed? There is a lot of debate, recession or reopening of China. Given these kinds of headline numbers, I believe the stock is available for a song and it will be rerated once the market takes cognisance of the value that the bank is creating. So this bank can grow at that kind of rate, NIMs can be in the 5% region and the earnings CAGR will be much faster because they are sure to keep their or rather they hope to keep their NPAs below 1%.
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