Page 2 - Elixir Equities News Today

Dipan Mehta says: :Oil marketing companies can have a further trading rally even from these levels, but these are not great long-term investment stocks as we have seen. Their performance is extremely patchy and if oil prices start to move up, then these companies profitability will certainly come under stress. So, while they are great trading opportunities, I am not sure I can look at buying HP, BP, Indian Oil on a three-five-year investment horizon."

Dipan Mehta discusses the factors leading to better performance in the pharma sector, including the confluence of factors and the cooling off of raw material prices. He suggests that investors should consider overweighting the pharma and healthcare sectors for safety. Regarding the QSR space, Jubilant FoodWorks numbers have been unenthusiastic, but Mehta believes the slow growth is transient and recommends remaining invested. As for the interim budget, Mehta highlights the focus on infrastructur...

Dipan Mehta says capital goods and infrastructure sectors are expected to do well in the coming years, especially if the BJP retains the majority in the General elections. There has been an increase in SME IPOs compared to mainboard ones, but caution is advised due to the frothiness and lack of floating stock in SMEs. Railway stocks have performed well due to increased budgetary allocation. Small and midcap stocks have good quality businesses, but valuations are very rich.

Dipan Mehta, Director, Elixir Equities, cautions investors to be cautious in 2024 and maintain liquidity. He observes softening demand across sectors and the impact of the base effect on corporate earnings. The bull markets in 2024 will require skill and risk management, unlike the luck-driven gains of 2023. Investors will be tested on their research skills and conviction, as the year will be stock specific and tricky.

Dipan Mehta expects a deep correction in the stock market, possibly as much as 10-12% on the Nifty and the Sensex. Corporate results have been disappointing, with growth rates of 10-12% but not enough to encourage buying at current valuations. Profit margins have expanded due to commodity prices, but this trend may level off. The next six months could see very disappointing earnings seasons. Banks are also facing challenges, with concerns about NPAs and slower growth in advances due to cautious ...

Dipan Mehta predicts a tough earnings season with volatility and muted earnings for blue chip companies due to high expectations and the base effect. He advises trimming positions and not investing further at these levels. He expects a deeper market correction and suggests booking profits, especially in stocks with suspect fundamentals. Mehta believes that financials may face minor headwinds, but the longer-term positive trends in NBFCs and banks will not change. He advises waiting for earnings ...

Dipan Mehta says: “Whatever cash flows are coming through, I am just sitting on it. I am not investing afresh. Whenever a company is not living up to its potential, like something in speciality chemicals has largely underperformed, largecap tech has underperformed, but I still am positive on that sector.”

Dipan Mehta says: "The best two-wheeler company in our opinion should still be Eicher Motors and we are a bit disappointed with their monthly numbers for the two-wheeler sales. It was well below our expectations but that could be a minor aberration. But in the medium to long term we do feel that Eicher Motors will be able to gain ground and grow on a consistent basis purely on account of its product profile, expansion of its distribution network and the huge export opportunity."

“Take some profits off on companies where price to earnings multiples are beyond 50-60 times trailing 12 months could be private sector defence contractors. It could be some of the newly listed stocks as well which are engaged in different businesses trading at very rich multiples. You could even consider adding specialty chemicals to that list where trading multiples are quite rich.”

“A very strong premiumization trend playing out in the auto industry and even if volume growth is high single digit, the actual revenue growth is transiting into mid-teens or even higher because the average selling price of the models across the board in all the segments including tractors is going up. The next few quarters look very exciting for the auto industry.”