Are you getting calls from your clients asking whether they should get worried about crude? If yes, how are you defending it?
The global set up is definitely a bit adverse for the equity markets with a combination of factors like interest rates inching up, crude going up to $86-87. That also reflects in the way the global markets and global equity flows are getting reversed. So, having seen a very smart run up in our markets in the last 15-20 days, when one is faced with such adverse data points, clearly there is a case for some sense of caution or consolidation in the markets.
Having said that, in the last 15 to 18 months, the market has navigated many difficult data points extremely well and the small corrections that we are seeing in the market in the range of about 5% to 10% are being bought ferociously. So as long as we do not see any negative on the overall earnings picture, the overall structure of the market will continue to be positive with some consolidation and corrections like what we see in a typical bull market.
Bajaj Finance has done better than Street expectations. At the same time, there’s a question mark over its valuation. What would your strategy be now?
There is overall good momentum across key business parameters like customer acquisition. The new loan book has reached pre-Covid level and we are expecting a strong healthy AUM, CAGR of 25% over the next two years.
More than the valuation part, we look at this stock as an aspirational stock with a very strong platform and pedigree. When one has this kind of a company it is more about having to participate in the growth opportunity that is there and how exactly Bajaj Finance can participate. We will keep talking about valuations but these are one of the unique stories with a very massive growth potential. We think we should have a positive view on this name and have a decent amount of allocation from a two to three year kind of a perspective.
What are your opinions on the big ticket acquisition by Microsoft of the game maker Activision Blizzard? What a valuation here, almost touching $69 billion! We have only one listed play in India – Nazara Tech. Directionally, where can gaming companies be headed next?
Given the liquidity which is there in the global market and the entire technology and fintech space, there is a massive appetite and we think that it is true for many Indian companies – whether it is in the fintech space or the kind of unicorns that we have seen through IPOs and so on. It is a big positive for the technology space, particularly the gaming space.
As you rightly pointed out we do not have too many companies but it gives an idea about the sort of interest which is there….
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