“Cost-income ratios are expected to come even lower along with credit cost. But I think numbers have been fabulous so far. In the broader universe, again on pullbacks, NBFCs like Chola Finance which had a stellar show when it came to the advances growth probably also looks decently poised,” says Mayuresh Joshi, William O Neil India.
Tell me the top financial bet that you have from the BFSI space?
It is an Interesting space and I think it has moved quite significantly. The numbers have been very encouraging in the quarter gone by and therefore from the core banking names, we have got ICICI Bank and State Bank of India which probably remain on our buy watch list. What we probably got in our research list and in the model portfolio is IDFC First Bank. I think the numbers have been fabulous for IDFC First. The expectations in terms of granularity expected to come through both in terms of the retail mix as well as the advances and deposit growth are expected to keep stable NIMS along with stable credit deposit ratios.
Cost-income ratios are expected to come even lower along with credit cost. But I think numbers have been fabulous so far. In the broader universe, again on pullbacks, NBFCs like Chola Finance which had a stellar show when it came to the advances growth probably also looks decently poised.
Obviously, the move from key pivot levels on the OEM methodology is a little bit on the higher side. And therefore, pullbacks are something that are warranted. I think these are the few of these names that we like from the financial universe on the OEM.
With the onset now of the monsoon. Give us a sense as to whether or not you are looking to bank on this theme in the long run say some rural plays etc. that you believe could merit?
I think with monsoons expected to start, I just read a news article that in the next two days, it should start approaching the western shores as well so I think that is a very positive sign. I think what happens largely in the second half of the monsoon season, whether we do get an El Nino, I think is going to be largely being discussed at this point of time.
But that will largely determine the fortunes in terms of a lot of these rural focused stocks. I think a mix of both crude derivatives and crude prices coming off expectations of long-term monsoons still being around the 90-95% mark means that a lot of these rural-based themes should come roaring back.
Having said that, I think a lot of these midcap companies which are into the infrastructure space, rural roads, semi-urban construction activities that are probably expected to take place as well look very-very interesting. So, yes, I think a few of these road players, players like PNC Infrastructure as an example come to mind. A few of the auto stocks are nicely perched as well. We have seen huge outperformance from stocks like the TVS Motors in the past.