Market Strategy: Be on the lookout for buying opportunities whenever there is a sharp correction: Hemang Jani

Many global developments and now with geopolitics also included in that and then of course at home also the SEBI F&O restrictions. How do you think all this will develop in our markets? I assume that much of the correction already occurred on Tuesday and Monday, of course. Today, it looks like it’s going to be kind of a quiet 1% drop.
How to breathe: Yes, while we were enjoying the holidays, many developments took place globally and even on Tuesday night we received this circular from SEBI to curb F&O trading. So I think it’s going to be eventful. My understanding is that when it comes to the markets in general, we had already started to see the trend that they could achieve a little bit of success and, again, we are entering the earnings season and the quarterly updates would start to arrive.

Therefore, I think the broader decision one will have to take only after getting clarity on the earnings outlook. But my general view is that Nifty or largecap companies in general should hold out. I don’t see any reason for a significant downward correction as far as the Nifty and large caps are concerned. The overall market could cool down and that’s a good thing.

I think it’s healthy that after seeing a very significant upward move in the last year, if they go through a bit of a lull, we shouldn’t complain about it and you will find good opportunities wherever you see a significant correction in the broader scope. market too.

Therefore, I think we should have a wait and see approach and be on the lookout for buying opportunities whenever there are sharp corrections.
But in the meantime, what about the kind of opinions that are reaching the entire consumer goods space? We also had some operational updates. Dabur saying mid- to single-digit revenue growth is expected. Have Marico As well as matching that, the domestic business will see mid-digit growth and Investec also says it has been the weakest quarter in the last four years.
How to breathe: Yes, I think after seeing a bit of resurgence in the FMCG package and people talking about green shoots, I think the updates that have come from Dabur are not encouraging. Marico is good too, but he’s not that bad. But I think we should be attentive to the performance of the sector in general. Maybe Dabur may have issues related to the company and the stock price also earlier suggested that there may be some kind of disappointment in the trading update. So overall this is a defensive sector and for some of the companies like THEMAccording to Godrej Consumer, the sharp correction in palm oil prices would also help them somewhat.
Therefore, it would have the same weight in the sector. HUL would be something we would feel comfortable with. Marico is something we’ve liked for a while. Godrej Consumer again as palm oil prices have corrected. So, make a selective bet. But in volatile times consumer goods usually provide some type of stability, so I think we should have some exposure there.

Do you think there is a significant movement and investment opportunity in metals?
How to breathe: From a technical or commercial perspective, this space surely makes sense, given the recovery we have seen in the Chinese markets, the possibility of very strong stimulus and the fact that the pricing environment is improving, both for ferrous and for non-ferrous. rails.

So, I think something like a JSW Steel, Jindal Steelalso Hindalco, nalco, CentersI think these are some of the names that should do well in the current scenario, but you have to keep in mind that some of the lead-up has already happened. Therefore, we are not actually seeing a very significant bullish move from current levels, but it does provide more room to participate in that trade.

What’s your situation as far as the entire metal space is concerned? The brokerage houses clearly give the thumbs up and say that steel producers in particular are now in a fairly favorable situation. Do you agree?
How to breathe: Yes, I think steel companies offer a good business opportunity and given that something like JSW Steel, Tata Steel, hasn’t really participated in all this progress that we’ve seen and with China showing so much strength in both in the stock market, so as the possibility of a stimulus, so I think it bodes well for steel companies. So, JSW Steel, Jindal Steel, Tata Steel They are the names we like at this point.

What is your opinion about Ola? It went public at 75, it went to 150, 150 became 100. So it’s 50% higher than its issue price and 50% lower than its all-time high.
How to breathe: Generally, newly listed companies and also in the electric vehicle space, go to the market with a very high valuation, very high expectations and sometimes when there is a frenzy in the market at the time of listing, They see these types of movements. But my general belief has been that the growth story, while it may look very good on an Excel sheet, the actual growth valuations don’t make me feel very comfortable buying these types of companies unless you find them with decent valuations.

So, I have always said that if we go with the traditional players like Bajaj, TVS, they are better positioned because they also have a reasonably good presence in the electric vehicle market, plus their current business is showing decent growth. So why pay such exorbitant valuations to a new player just because it is only making electric vehicles?

Overall, it has been a good run for the pharmaceutical industry. Is it time to move from pharmaceuticals to diagnostics and healthcare?
How to breathe: When you look at the pharmaceutical space, diagnostics and healthcare are a very small component of the overall market capitalization. So you may have some allocation, some exposure to healthcare names. But the pharmaceutical industry is a relatively bigger space. And since we are seeing very good positive comments from people like Lupine, Pharmacy of the Sun.

Aurobindo, of course, has some problems in terms of observations, but the business per se is improving. So, I think in these kinds of times where the sector performs and in this last quarter, the pharmaceutical industry was one of the best performing sectors in terms of earnings growth, around 24% growth. So, I think you should continue with Sun Pharma, Cipla.

Even Aurobindo, if corrected a little, will provide a good entry point and have some exposure to diagnostic companies like Dr. Lal PathLabsthat is expanding southward, price stability is returning. So I think some combination of that would be good in the grand scheme of things.

News reports indicate that the top five companies in the engineering sector, L&T, HAL, BELKEC and Kalpataru have cumulatively procured new orders in the first half worth approximately Rs 2.04 lakh crore. How do you see the momentum in orders and what does this mean? Will it be a bit of a split view when it comes to the top five players or will it be a blanket statement that order momentum will increase across the board when it comes to capital goods or engineering?
How to breathe: Overall, momentum remains very good throughout the space. But if I have to make a new entry, I would feel more comfortable entering an L&T or SiemensABB where order flow momentum is very strong. And I would definitely avoid some of the mid-cap companies in the infrastructure space that have also done very well. Therefore, it makes more sense to be a little selective here, given that the rally has been steep and valuations are stretched thin.

Diamond prices have dropped by 25% to 30% and artificial diamonds or lab-grown diamonds, as they are popularly known, are per se destructive to the entire jewelry industry. In light of what is happening to the diamond industry due to disruption, where does a Titan or a Kalyan or, for that matter, PC Jewelers fit in?
How to breathe: The way we look at this whole space is that the diamond would contribute to a certain portion of the revenue and profitability and at the end of the day when you run a jewelry chain you keep all the options for the people.

Therefore, if there is any confusion regarding lab-grown diamonds or if the diamond business itself is declining, you can always have a strategy that makes up for that shortfall with other jewelry items.

So when you look at the numbers themselves, of course, given that Titan is a bigger player, the overall growth doesn’t look that good, but given the positioning, the fact that the segment is growing, even as the prices of the gold are at a very high level. all-time high by a very significant margin, I would surely have a positive view on Titan with a little more exposure to midcaps, something like Senco or Kalyan, which are also doing well.

But this is definitely a space that should do well, A) because of the holiday season, because of the wedding season, which will start sometime in the next few months. So, combining these two, this space should work well.