Looking at IndusInd Bank and the jump up on the stock right now, it seems like the markets are liking Rajiv Anand at the helm at the bank?
Mayuresh Joshi: No, I think that was expected to a certain extent and therefore, the kind of reaction that the stock has exhibited seems to be in the right direction. The next up move for the stock will now solely be based on numbers and the kind of transition that the new management will probably bring in.
Obviously, the kind of cleanup that has happened on the balance sheet when it comes to provisioning and recognition of asset quality pressures and therefore, starting with a clean slate with the new management, how they rebuild trust and how do numbers stack up, that next leg of the move or rerating of the stock will probably depend on all these factors put together. But yes, there are positive reactions to the announcement for IndusInd Bank.
You track the auto space very closely. Do you think the weakest link for Tara Motors is JLR, and given all that is happening with regards to tariff, global tensions, etc, and a changing dynamic within the entire auto pack, will the market like PB Balaji heading JLR?
Mayuresh Joshi: Ideally, they would, and again there were pluses and minuses as far as the acquisition is concerned. Obviously, they get a very strong hold in terms of the CV market when it comes to Europe, Latin America and the US as well. Therefore, the product mix will largely improve.
The second element is that even within the domestic market, ICV is the intermediary market where Eicher Motors still has a huge say and more products are getting introduced, and filling in the product loopholes for Tata Motors. Acquisition itself is reasonable. Yes, it is a large acquisition, and there are no two ways about it, but the kind of revenue accretion that can come through can be a value addition as well.
The minuses are huge acquisitions which means a huge upfront cost that needs to be played out. How the CV cycle will evolve specifically in terms of all the tariff impositions that have now happened is something that will play on numbers and volume and therefore these pluses and minuses will keep the stock in check. With Mr Balaji coming in, that is something the Street will take with both hands. But somewhere the uncertainty related to all these factors, where the positioning of the market is right now, makes me believe that the stock might be consolidating for a longer period.What is your take on Paytm because the stock is holding right now? Is it still a good opportunity to get in?
Mayuresh Joshi: No, again, there is a decent set of numbers which the Street probably liked. Obviously, the supply has come through and that has got gestated if the block has probably happened and the next move will largely depend on how they replicate last quarter’s numbers. If they are able to build on the solid gains that they probably achieved in the quarter gone by, the Street will probably rerate this counter. To a certain extent, the counter has got rerated.
There has been a strong move over the last three to six months and the market will now look out for the next quarter’s numbers in terms of the next move and the next reratings for the stock. Fingers crossed if they are able to replicate the performance and new-age businesses like Paytm and the replication of that on numbers will probably do the trick. But till that point of time, my own sense is that a large part of the move has happened for Paytm as we speak.