Will you get your hands on any of the companies that will directly or indirectly benefit from the listing of Tata Sons?
Deven Choksey: Well, that’s a good point you make and maybe we’re sure that each company’s business situation, especially the demand is very close. All of them basically look very solid to me. Steel is a structural story, the boom continues in steel as a commodity for the next few years, which we believe. More because on the side of spending on infrastructure, on the other hand the cost of energy goes down directly benefiting metal commodity players like Tata Steel. We love this particular business proposal.
Same situation, we like Tata Motors business proposition. The company has done all the mathematical corrective parts including the JLR portfolio and the commercial vehicle segment which is showing signs of forward growth. Tata Power also looks like an interesting company from an investment point of view, even kind of focused on renewables.
The hospitality segment with an asset light model in Hotel India is again an excellent business proposition. So, most Tata Group companies today remain very confident from an investment thesis point of view. Maybe this market offers some opportunity at the corrected price level. They will be buying the portfolio again from the current level.
At the juncture, Adani Group’s shares are good to own because everything has been fixed, nothing is happening there. Suddenly many stocks are not showing any signs of momentum either. But if someone has to invest and the time is three years, Adani Group shares that can return 40-50% from here?
Deven Choksey: Adani Enterprise is clearly worth looking at alongside Adani Ports. Both companies are showing signs of strong growth. Adani Enterprise is talking about de-merging its assets into airport assets, road assets, even data center business. I believe that the business will take off in the next half to two years and that’s where unlocking the monetization value will benefit investors.
In the case of Adani Port, given the type of integration that has been carried out between the East Coast and the West Coast and the type of internal logistics that has also been systematically organized, this company can easily talk about growing at a faster scale than normal. already. 500 million metric tons of cargo handling capacity has been exceeded and the company is going far ahead in the direction of expanding further into a larger amount of cargo handling with added value components as well. I would think that both companies remain positive from the point of view of providing value to investors over the next two to three years.We speak to Milind Karmarkar, who talks about how IT as a sector needs to reinvent itself. What are your views on the type of trajectory it has taken and how technology has improved the game? We’ve seen Gen AI and how IT is using it.
Deven Choksey: A clear understanding of coding to computing is the time we will now experience from Indian IT companies especially. Coding is becoming easier due to the involvement of AI and at the same time computing is becoming more demanding due to the requirements of each user industry which usually calls for a larger number of AI-based applications. according to the demand to maintain the business model or even increase the efficiency, etc.
In our understanding, Indian IT companies are undergoing a change in their business models. Many companies develop middle layer tools, which are basically required for the basic processes based on the cloud infrastructure adopted by the company. These tools are fundamentally based on AI whose use cases are developed in agricultural technology, as well as in health technology.
Every area where certain AI tools are being used today is one that offers excellent growth opportunities for the business. I wouldn’t be surprised if many Indian IT companies start offering platform as a service to most of their customers in different verticals and that should be an area to watch. Yes, he is already on a bigger base, so you can’t expect a quantum leap so quickly, but I believe that from the muted performance he’s put up in the last two-three years, he deserves it. return to a double-digit growth rate of around 12% to 15%.
So, one can remain confident about the IT companies and especially the engineering R&D space where some of these companies, the mid-tier IT companies, are looking quite good because of the vertical they are serving.
Is Kotak Mahindra Bank a good buy at these levels? It has underperformed. Anything that can go wrong has gone wrong. Now the additional news for Kotak Mahindra Bank can only improve as earnings are down, RBI issues at their peak, and valuations are also at rock bottom?
Deven Choksey: In the last three to four years, the company has been more careful than expanding the size of the book. They may want to create a backbone of a lot of strength in the form of the processing part, using the technology, the blockchain part of the technology.
In understanding, the bank has made all efforts and consolidated itself in the last three-four years’ time and is now ready to take the call to further develop the scale of activity. I will not be surprised if you see the organic together with the inorganic growth strategy this bank demonstrates in the future, both in the size of the company’s loan book as well as in the retail side of the loan in that situation.
All the franchises, the verticals of the company that Kotak Mahindra Bank is basically in, they are all good, be it NBFC, be it AMC, be it insurance, be it stockbroker, I believe each of these verticals are doing very well to make it bigger. amount of value that is not reflected in the bank. So, from the perspective of looking at the company, even though it has underperformed, it holds a significant number of promises to do better than others in the coming year.
