It was a brave call by Dhoni to bat ahead of Yuvraj in WC final, says Upton

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Fit-again Mohammed Shami raring to go in the IPL

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Target is to get on a roll in the first three games: Jonty Rhodes

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Why PSU banks & NBFCs may be a better bet now

Incremental investments may go into PSUs as well as smaller private sector banks just to get the alpha going, says Dipan Mehta, Director, Elixir Equities. Barring the post Budget rally when the banks actually led the charge, we have seen stark underperformance from banks. Even the most preferred ones on the street like an ICICI Bank are struggling to stay afloat at Rs 580. What is causing this underperformance?To an extent, private sector banks are over owned and investors are moving into some of the smaller sized banks within the private sector space like IDFC First, Federal Bank. That is one trend which is underway. More importantly, the next 12 months look far more exciting for PSU banks, for NBFCs per se rather than the stable, safe banks like HDFC, ICICI, Axis and Kotak. A more risky trade is playing out in the bank stocks and the Bank Nifty has underperformed because it has got high weightages from the large private sector banks which themselves have been underperforming. While private sector banks are a great story for the next three to five years or so, the next one year could see some underperformance vis-à-vis their peer groups in the smaller private sector banks and the PSU banks. That has been playing out over here and it may last for six to 12 months or so. But, at the end of the day, the four large banks have a superb track record, have great scope to improve their earnings going forward. Just the other day we heard that HDFC is targeting SMEs and trying to maintain a 20% type of credit growth rate and that is quite fantastic from their price and their base. So sometimes good quality stocks do give underperformance but just because of three, four quarter underperformance, you do not really liquidate the position. You just ride out this period because when it is outperforming, it is difficult to catch at all points of time. That explains why the underperformance is there and incremental investments may go into PSUs as well as smaller private sector banks just to get the alpha going. What would you pick from the commodity basket?I would prefer to wait as far as commodities are concerned. There’s no point in jumping on to the bandwagon at this point of time. A lot of gains have been discounted. The increases in steel prices, aluminium prices and commodity prices per se have been discounted in the stock price and from this point on, the risk return profile is just not favourable. These are very cyclical industries. It is difficult to predict when the downturn will come. But at some point of time, when that does happen, then you can also see a sharp correction. In the last 15-20-30 years or so, they have not been great value creators and it will just be a distraction for investors, especially long-term investors. The best time to buy commodities is when the cycle is on the low or down and steel prices, aluminium prices are at extremely low levels and the companies are bleeding. But that is not the case just now. I would just like to give a pass at this point of time. There are many other investment themes in these sectors. What repercussion is this going to have for metals globally because all through 2020, metals have been in a good spot. Such a large infrastructure investment in the US and for eight years only means that metals are going to be in a good stead for a long time to come?The assessment is right and that is what has got a lot of traders quite excited about metal stocks. But these plans last for a long period of time and the commodity cycles do not last that long. On the negative side, we are seeing that the Chinese economy is getting back into normal and the central bank over there is getting back into normalcy as far as monetary policy is concerned and they are trying to focus less on infrastructure and more on consumption. So both of these economies and their demand for steel, aluminium will balance each other. It is just that I feel that metals at this point of time, given how notorious they are in terms of practicality and given the fact that it is very easy to set up new steel plants to expand capacity and to match supply with demand, I would just be a bit cautious given the run up in the stock prices. There are some favourable macro trends and those have largely been discounted. We could see metal shares rally by another 10-15% but they can correct equally fast. It is very difficult from an investor’s perspective to play the commodity stocks and that is why we like to avoid them. But if you have a trading kind of a perspective or edge, then certainly metals can deliver decent returns in the short term.

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Where should you look for the next multibagger?

There is a lot of scope for some of the utility stocks to do much better, says S Naren, CIO, ICICI Prudential AMC The portfolios which you manage are centred around buying into utilities. They are cheap and are big beneficiaries of low interest rates. What is the way forward for utilities which normally do well when rates are coming down rather than a pro inflation environment?Actually we were looking at it recently. We researched stocks where valuations are very cheap relative to history and we came out with utilities. It is still the cheapest sector relative to history at this point of time. And that continues despite the move in the last three months because you have to look at how it is on a one-year basis or a three-year basis and I believe that what Covid showed us in the last one year is that there are things which you cannot live without -- electricity, IT and telecom. These are the three things which you cannot live without and that is why utilities have to get rerated more. They have done well in the last three months but on a one-year basis, many of the stocks continue to be underperformers. There is scope for them. If you compare utilities against another sector like metals, it has drastically outperformed utilities and there is a lot of scope for some of the utility stocks to do much better from where they are at this point of time. That is how we look at it currently. One central argument and one realisation for all of us has been the importance of digitisation and the relevance of Indian IT companies. Do you think that the IT companies are fully valued or could this be a structural trend rather than a sugar rush?Initially, we thought that this is like 2008 and we were a bit cautious. Then we realised that after Covid we could have seen a structural change in growth and that growth could have gone up structurally because at the end of the day, the kind of investment that every company has to make in technology -- be it the work from home (WFH) framework, the digitisation framework or an ecommerce framework -- has gone up significantly. We have to agree that post-Covid, the outlook is better for the Indian IT companies. When we did the same analysis for IT that we did for utilities, we found that IT is one of the sectors which has got drastically rerated compared to the pre Covid period. The question is how much of it has already been built in the stock prices? Maybe some of the companies will give us guidance this month and once they give the guidance, we will get an idea of how much is already built into it and how much has not built into it. Having said that, it is not just the guidance for this year which is important, the long-term growth guidance with changes which are going to happen is very important. There is a lot of dilemma whether for the next five years, the growth rate for the IT companies have gone up or not. There is a lot of thinking going on in our firm about the growth rate of the Indian IT sector due to what has happened in the last 12 to 18 months. Last decade we saw that companies which were reducing debt, and zero debt companies, companies which were extremely focussed on higher ROCE and higher return on equity did rather well. Could the reverse happen now? Over the last two years, I kept telling my colleagues to bet on solvent leveraged companies. There are so many people who said we will bet on solvent non-leverage companies and I used to tell them to bet on solvent leveraged companies. I never told them to bet on insolvent leveraged companies. But the reality is, in the last one year, solvent leveraged companies have done much better than solvent non-leveraged companies. I believe that the solvent leveraged companies for the next few years can do much better because the interest rates at which the solvent leveraged companies are borrowing today, is really a mouth-watering 3-4-5% for the next one, two, three, four years. Many of the AAA companies are borrowing at such low interest rates that I still believe that the solvent leveraged companies have a huge positive benefit which is coming out of low interest rates. There are companies which are just too cash rich and they do not know what to do with the cash and for a period of time they were the darlings of the market. But I am not that comfortable there. I tell those companies why don’t you return all the money back to the shareholders because anyway you are getting no return on the surplus debt that you are sitting on. If you look at it, at least three years back you were getting 7-8% in most of the debt mutual funds. Today if you invest in a liquid fund, you get 3%. So why not return all that money back to the shareholders? I think solvent leverage is a much better theme than solvent no-leverage at this point of time. I keep telling my colleagues that growth is something which will always be rewarded. This is a world where growth is not easy to get and that is why if IT companies are going to deliver good growth for the next five years and they are going to get very good valuations. That is the reality and we need to recognise that leverage in a limited way and not in an excessive way is a positive. But leverage in an excessive way may be negative like what happened to infrastructure companies in 2008-09-10. That is the way in which we have been looking at it and the last one year has been profitable for us in many of the stocks where we have invested in solvent leveraged themes. Market price is a function of EPS and PE. For the next three years, which end of the market do you think could surprise us with EPS expansion? Of course, if both happen, then we have a multi bagger. It is rare that EPS and PE multiples go up together?Clearly the cyclical part of the market is going to surprise us on EPS and I have seen that in the sectors which surprised us on EPS, for a few years PE also expanded. You might have both but all these parties can go down the day the global central banks say we want to spoil the party and we are going to increase interest rates. I believe it is the global central banks which are going to finally play spoilsport. But the last one year has been exceptional.

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Good Friday a reminder of sacrifices of Christ: PM

In his message on Good Friday, Prime Minister Narendra Modi said the day reminds us about the struggles and sacrifices of Christ. "Good Friday reminds us about the struggles and sacrifices of Jesus Christ. A perfect embodiment of compassion, He was devoted to serving the needy and healing the sick," Modi tweeted. Christians around the world commemorate the crucifixion of Christ on Good Friday. Good Friday reminds us about the struggles and sacrifices of Jesus Christ. A perfect embodiment of compassion, He w… https://t.co/euRzX31BPk— Narendra Modi (@narendramodi) 1617329368000

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NR Narayana Murthy's firm may buy stake in Udaan

Mumbai: Catamaran Ventures, the private investment firm launched by Infosys’ co-founder NR Narayana Murthy, is in talks to purchase a small minority stake in Udaan from some employees of the business-to-business marketplace.These employees are seeking to offload their vested stock options, according to three people with direct knowledge of the negotiations.The Bengaluru-based family office could acquire 2-3 % stake in Udaan, which was last valued at $3.2 billion when it raised $280 million from new and existing investors as an extension of its Series D funding round in January, the sources said.“This is a completely secondary transaction. Some employees might sell part stake to bring on board Catamaran,” said one of the persons cited above, adding that "currently, due diligence is being carried out”.Udaan has so far raised $1.15 billion from a clutch of investors, including Octahedron Capital, Moonstone Capital, Lightspeed Venture Partners, partners of DST Global, GGV Capital, Altimeter Capital Hillhouse Capital, Footpath Ventures, Citi Ventures and Tencent.As of January, Udaan had more than three million retailers and small and medium-sized businesses transacting on its platform. It competes with companies such as IndiaMart, Amazon Business, JioMart and Flipkart for a slice of India’s growing B2B e-commerce space.For Murthy’s investment firm, this deal comes almost two years after it increased its holding to 76% in Cloudtail, a joint venture with Amazon. Cloudtail is the biggest seller on Amazon India’s online retail marketplace. A stake purchase in Udaan will provide Catamaran with an entry into the fast-growing B2B e-commerce space as well.Responding to emailed queries on the potential stake sale, a representative for Udaan said, “As a responsible organisation, we do not comment on market rumours or premature transactions.” MD Ranganath, president of Catamaran Ventures, did not respond to multiple phone calls and text messages seeking comment.Founded in 2016 by three former Flipkart executives Vaibhav Gupta, Amod Malviya and Sujeet Kumar, Udaan helps retailers purchase goods from wholesalers and traders across categories such as apparel, electronics, pharmacy, staples, fresh food and fast-moving consumer goods. It has connected about three million retailers across 900 cities with some 25,000 sellers spread across 200 cities. The company offers supply chain, lending, payments and marketing capabilities, enabling these retailers to source from large manufacturers as well as distributors.According to a report from Bank of America, the unaddressed SME credit demand in India is around $300-$350 billion, with more than 90% of current demand being met by banks. A typical digital SME lender focusses on Rs 1-5 million ($13,575 to $67,875) ticket size with no collateral, average tenure of around 12-18 months, and with some ecosystem anchor,” the report stated. In January, when it raised fresh capital, Udaan had said it would deploy the funds to also expand its financing capabilities for small businesses and extend its supply chain network.On its part, Catamaran has till date invested in a range of businesses including the National Stock Exchange, edtech portal Udemy, insurance seller Acko, Paperboat maker Hector Beverages, Manipal Global and Ace Creative Learning, among others. According to the fund’s website, it manages over $1 billion across asset classes.

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