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Kotak’s Sanjeev Prasad shares outlook on telecom, power, and cement sectors
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The MD and Co-head of Kotak Institutional Equities discussed the reasoning behind the company’s outlook on various sectors covered as part of its recently-released note.
Sanjeev Prasad, MD and Co-head of Kotak Institutional Equities, discussed the key takeaways from the brokerage’s recently-released note covering comprehensive sectoral analysis during an interview with CNBC-TV18.
In the telecom space, Prasad expects a decent tariff increase post-election and that should support earnings momentum for some more time.
Prasad has been positive on Bharti Airtel for a long time. “The stock has done well. That was our call earlier that even if it becomes a two-player market, it will be for Bharti Airtel and Reliance Jio. Now it looks like it will remain a three-player market with Vodafone Idea,” he said.
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In the power sector, he believes the market is more focused on short-term issues and focusing too much on thermal capacity generation without paying much attention to the long term issues.
However, Prasad says, “The move is clearly towards renewables and that pace will accelerate going forward. Between solar and thermal, it is very clear that solar is much cheaper now,” he said.
He noted that solar modules are now cheaper and aid in lower costs of power.
In the cement sector, he cannot understand how fundamentally a capital intensive sector can have price to earnings (P/E) of nearly 30-35 times
According to Prasad, the P/E cannot be higher than 15-20 times for cement companies.
For more, watch the accompanying video
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