Would you recommend betting afresh into BEL, HAL, or any other defence stock?
Neeraj Dewan: If someone is a long-term investor, even after the run-up, defence is one space where there are going to be budget allocation expenditure, there can be export opportunities, and so they will continue to be strong even in the longer term.
Shorter term, definitely because in the last couple of months the stocks have run up a lot and some consolidation may happen. But for a long-term play even now one can pick up these stocks and stay invested in them for a longer term.
Even if you take a look at some subsectors inside defence, let us talk about some of these shipping companies. A lot of them have seen a runup once again in the last couple of trading sessions. Given the kind of surge that we have seen in a couple of these names like SCI, Garden Reach, Cochin Shipyard, would you still be advising a buy in all of these stocks?
Neeraj Dewan: I am still positive on companies like Garden Reach or Mazagon Dock. SCI can be a move because of the prices going up because of the Iran-Israel clashes, so they may be impacted. Suppose that is settled and there is a truce there, you may get some reaction on the downside from SCI. So, I am not positive on stocks like SCI or even Cochin Shipyard but something like a Mazagon Dock or Garden Reach are good long-term plays.
What is your analysis on Biocon? I do not know how closely you track this one because there has been a lot of easing in terms of regulatory hurdles. Now, there is a sizable fundraising as well. The next big overhang seems to be succession, but until then, everything seems to be working up.
Neeraj Dewan: Actually, there has been a lot of news flow around the succession issue also and whether there can be some stake sale or not. So, there were a lot of speculations in the stock earlier. And now there is this QIP. There will be interest in seeing who is going to invest in the QIP and that will keep the stock positive. But in the medium-term, what happens is that once you get this kind of a supply in the market, the big investors will invest into the stock for the long term and there would not be any huge follow-up demand coming in.
So, over the medium-term, the stock may not give that kind of a move, but this kind of inflow into the company for a longer term will do well and the stock should do well. Performance on the numbers front has not been that great lately, and that also needs to improve going ahead. If that improves with this kind of a capital coming in, over the long term, the stock should do well.What is your take on Asian Paints? Reliance has offloaded its entire stake in Asian Paints. Does this change investor perception about the stock now that Reliance has offloaded? Asian Paints has been in the middle of the competition and the price war in paints. Do you believe it is a good time to see any run-up or is it going to be sluggish going ahead?
Neeraj Dewan: Some more consolidation will stay as far as Asian Paints is concerned. There can be some short-term up move because the stock has been down and stayed at these levels for quite some time. So, someone who is a long-term investor and has seen Asian Paints doing well over the years may take this opportunity to add up some to the portfolio because majority of the portfolios are holding on to the Asian Paints stock because over the longer term they made good money there. So, they may like to add some more.However, I do not see any meaningful upside happening in Asian Paints over the medium-term. So, a short-term move may happen positively but over the medium term, there can still be a sluggish movement and some more consolidation in Asian Paints.
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