Sunil Shah, fund manager at SRE PMS, on Wednesday said the market would be driven more by those large-cap opportunities. "There is absolute value visible in the HDFC Bank Ltd and State Bank of India (SBI) shares. Both are leaders in their own space. When money gets transmitted into the banking channel, these two companies clearly offer a lot of opportunities," the market expert told Business Today.
From the non-banking financial company (NBFC) space, Shah said Bajaj twins (Bajaj Finance and Bajaj Finserv) stand out over there. "Bajaj Finance stock is trading at the lower end of the valuation despite the growth that it is showing. There is still room left for a target closer to Rs 9,000. The upside could be limited from here but it calls for a value pick even at the current price," he stated.
Moving on to the December 2024 quarter results, the market veteran said recently-listed Waaree Energies Ltd posted an excellent set of numbers. "The kind of growth that they are eyeing over the next couple of years, an order book of Rs 50,000 crore, clearly is the case in point where investors can put in money. The only caveat is that the lock-in period of investors in the pre-IPO comes to an end by almost April-end or so. At that point, we could see selling coming and that is where investors can look at investing in Waaree Energies. It is a combination which we need to play in this market," Shah said.
When asked about Zomato Ltd and Swiggy Ltd, the market specialist said both companies are today catering to metro and capital cities but eventually they will flow to Tier-II cities as well. "This kind of idea is for the braveheart (high-risk taking), long-term investment and those who can fathom volatility," he underscored.
"Food delivery portals have a model. The only thing is their operating leverage has to play out and it has to become profitable. Then, we'll see the next leg of you know growth in the market cap which will take them to the next level," Shah added.
He expects a 25 basis points (bps) rate cut from the Reserve Bank of India (RBI) in the upcoming bi-monthly policy outcome, scheduled to be declared on February 7 (Friday). "25 bps is the bare minimum cut which can be expected from the Reserve Bank governor, which is very much going to be there and would kickstart a huge amount of momentum in the personal finance sector. We are currently seeing stress in the micro-finance segment. I think gold finance will be one such pocket to watch out for," Shah stated.