The ITC mega analyst meet failed to enthuse any optimism on what the long term trajectory for the company is going to be. That is a business catalyst which needs to be demonstrated and until then, this stock will remain range bound. The only thing they will have to be focussed on would be with the ability to monetise the huge customer base to cross-sell the other products.
Some of the lock-in anchor investors exited Paytm yesterday and the stock now probably trades at about seven-time sales and that is a fairly decent number. What is the right price to be a buyer in Paytm – is it Rs 1,300, Rs 1,200 or sub Rs 1,000? For Indiabulls specifically, it is good but a good amount of this news is already baked into the stock but remember, a negative catalyst has been removed. This is clearly a rerating moment but overall the housing market itself is very strong. The company has a fairly okay housing book aimed at affordable housing and now with the promoter stake going down and external investors coming in, there is likely to be greater board oversight. One of the biggest concerns for the stock has been around the issues of corporate governance and promoter stake. What does it mean for Indiabulls as a stock now that Sameer Gehlaut is looking to reduce his stake in the company from 20% to sub 10%? Is this a rerating moment for Indiabulls Housing? The Indiabulls deal in all probability will go through today. Fed has talked about three rate hikes next year and it shows the underlying strength of the US economy and that is good news for the Indian IT sector. But one thing is fairly clear, their order book and the execution of the order book is at a very robust pace. So that expectation is also being built into the Indian IT stocks and they will raise their guidance going into next year. Accenture will start reporting first and it is likely to beat expectations.
And soon companies are going to start reporting.
STOCKS THAT WILL SKYROCKET TOMORROW PLUS
The market strength aside, one needs to closely monitor what the IT pack does and whether it further builds on to the gains that it has already made in the last 12-18 months?Ī good observation there is the underlying strength of the business plus now that the dollar strength is back. The stock is likely to languish more or less at current levels. Similarly, in case of ITC, there is a lot of potential unlocking but whether they will do it and in what time frame, we do not know. However, a business catalyst to be demonstrated and until then, this stock will remain range bound. Chakri Lokapriya, CIO & MD, TCG AMC, says the Paytm stock trades at about seven-time sales now and that is a fairly decent number.
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