Have you seen this luggage stock, Safari and VIP? There is a very interesting story that the founder of Safari used in the VIP and look at the value created! Today, a big upgrade is coming. Have you seen this luggage stock?
Sandip Sabharwal: Well, I really missed the Safari story and so far, I think I’ve done pretty well. Post-COVID, I’m sure about the trade opening again, so we think that VIP can do better. It is not. Right now, at that valuation, Safari is perfectly priced in the near term, but if it continues to do well, the stock could do well.
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VIP, on the other hand, could be a potential turnaround candidate. This is one of the stocks that has not done well and I would think that the price is worth it and for those who want to wait, they can wait for the results, see if there are signs of a pullback, and then look at buying.
What is the current trade from here to the rest of the year? If you don’t invest, it’s a trade. The fact that raising cash is also a trade. The fact that they do not sell anything, is also a trade.
Sandip Sabharwal: The deployment of fresh cash should be done with caution. For people who have participated in the market, you have made a lot of money and the stock has gone up a lot. Many stocks go up 10-20 times, so no one misses the bus or disappears from the market. You think the market looks expensive. There could be a potential correction somewhere, I don’t think so in the next few months. we need to see a big correction but it is possible. In that scenario, you have to wait. There may be some people who can make a correction and buy that day at that price, but don’t keep buying stocks that go up every day. Even though people warn about PSU, the price is already the old thing that people remember but it keeps going up. IREDA is at 10 times the price to book. Even Bajaj Finance in its heyday did not trade at high prices. So, valuation is important in the long run.
Just a thought on the recent news about the increase in platform fees and the way Zomato has moved, are you keeping track?
Sandip Sabharwal: What has happened is that the duopoly has established itself and until other competitors try to disrupt the market, Swiggy and Zomato are in the duopoly which is now focused on profitability. So, usually in these cycles, we will see that the results can surprise on the positive side and that drives the stock price higher.
For a holder, there is no reason to sell although I would not be a buyer at this price.
Do you think Paytm can be a counter bet? On Friday, it was disclosed that Akash Bhansali had also bought 1.2% stake. Paytm’s market capitalization is currently around Rs 20,000 crore. I’m really going with the fact that you get all Paytm and some cash will be there.
Sandip Sabharwal: Yes, I definitely find Paytm’s business model unsustainable. What they do is easily replicable, and all the profit growth in the last five-six quarters has come through loan originations, which we have done and commissions we have done. So, I don’t think it’s something we want long term. Whether it can bounce from extremely oversold levels in a significant bull market, anything is possible. But I don’t like to buy it because I don’t know what will happen.
