Tag: Rahul Arora

Nirmal Bang’s Rahul Arora bets big on pharma stocks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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If Rahul Arora, CEO at Nirmal Bang Institutional Equities, makes a portfolio for the next year, pharma, cement, auto and auto ancillaries and banks are where the bulk of his allocation would be, he told CNBC-TV18 while discussing the stocks and the sectors he would bet on.

“Within that, at least a third to 40 percent of my exposure would be in pharma,” he said adding, “and then the remaining 60 percent would be divided equally amongst other sectors.”

Amidst pharma stocks, Arora prefers Sun Pharma and Cipla. “Sun has got a good blend of both US as well as India, so that would be one name that we would definitely play. The other would be Cipla,” he said.

He will stay away from export-related stocks including IT. “It will probably be more domestic and our pecking order sector-wise will probably be pharma as one, cement as two, auto and auto ancillaries as three and banks as four,” he said.

This is going to be a tough year for markets – Diwali to Diwali. “It is going to be very tough to make money. We are going to be heading into a slowdown, in some cases even a recessionary environment,” he said.

With the ease with which money has been made from 7,500 on the Nifty to 18,500 on the Nifty, stock picking is going to be extremely critical. One will have to be very selective.

He believes cement is a very big play because government spending on infrastructure projects is going to be quite material. So as a second-order beneficiary, cement will end up doing pretty well.

Also Read: Explained: What the NSE proposal on reconstitution of indices after mergers means for HDFC twins

He is relatively positive about commercial vehicles (CVs). “We will probably play Ashok Leyland from the OEMs. As a proxy I would probably look at Jamna Auto,” he mentioned.

TVS Motors has delivered better than the other two peers. The company has been ahead of the game in premiumisation and EVs. “From a preference standpoint, Hero MotoCorp would probably be a slightly more value-additive pick for us because of the valuation comfort and the cash on books. The dividend yield on Hero is also reasonably good,” he explained.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Cost advantage for HDFC, says Rajnish Kumar; boost for HDFC Bank mortgage book, adds Rahul Arora

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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“When the cost comes down the combined entity gains in terms of cost efficiencies, and it is value accretive for both the shareholders of HDFC and HDFC Bank,” he analysed.

According to the deal, the share exchange ratio shall be 42 equity shares, credited as fully paid up, of the face value of Re 1 each of HDFC Bank for every 25 fully paid-up equity shares of the face value of Rs 2 each of HDFC.

Ajay Srivastava, CEO of Dimensions Corporate Finance Services, observed that the merger was because the HDFC stock wasn’t performing as per expectations.

“The lagging stock performance of the HDFC has forced them to push their hand toward the merger because the investors and the stock options were suffering. So, more than the merit of the merger, I think it is a real pressure coming from the non-performance of the stock because the logic of not merging remains the same, nothing has changed in regulation, nothing has changed in terms of the provisioning, nothing has been in the reserve ratios,” he said.

In the long term, Srivastava favours the merger but says there are many things to watch out for.

“We need to see how the merger happens, who heads this organisation, is it going to be the HDFC chairman, or is the MD going to head it?” he said. Later, in an investor call, the companies made it clear that HDFC Bank CEO would continue to lead the entity.

Rahul Arora, CEO of Nirmal Bang Institutional Equities, said that the announcement was a bolt out of a blue but not entirely surprising.

“I think, if you look at the cost of funds that HDFC Bank has vis-à-vis HDFC limited, I think this merger will obviously stand HDFC limited better from a cost of funds standpoint. If you look at HDFC Bank, their mortgage book is not that big and if you have listened to the last few conference calls, they have spoken about growing their mortgage book in a very material way. So, I think this vertical merger helps both entities in many ways because HDFC Bank becomes a very serious competitor to the merged entity rather than a very serious competitor to State Bank of India,” he said.

Both HDFC and HDFC Bank stocks were locked in the upper circuit at 10 percent in early deals. HDFC shares were frozen at Rs 2,696 apiece on BSE and HDFC Bank at Rs 1,656.9.

Catch latest stock market updates with CNBCTV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Levels of 16,500-17,000 should hold out for Nifty50: Nirmal Bang’s Rahul Arora

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Levels of 16,500-17,000 should hold out for the Nifty50, Rahul Arora, CEO of Nirmal Bang Institutional Equities, said in an interview to CNBC-TV18. Arora said the earnings estimates have factored in an increase of 25 basis points by the Reserve Bank of India (RBI) in 2022.

The market has discounted the upwards revision by the central bank, he said.

“Looking ahead one year forward earnings where earnings will be in December of next year, a reasonable floor given what the US Fed, the RBI and what is happening on the health front, somewhere around 16,500-17,000 is a reasonable flow for the market in the short to medium term,” he said.

Speaking on the automobile sector, Arora said TVS Motor Company is ahead of Bajaj Auto and Hero MotoCorp in the electric vehicle game.

“Our own sense is that TVS Motor is slightly ahead of the game, compared to some of its peers like Bajaj Auto or Hero Motocorp. So, if you’re wanting to play the two-wheelers, from an electric vehicle (EV) perspective, I think TVS is probably one place where you want to park your money,” he said.

Nirmal Bank Institutional Equities is positive on growth in the health insurance sector going forward, he said. Insurers can easily compound by 20 percent for the years to come, he added.

Arora said he will look to subscribe to the Star Health IPO.

Ace investor Rakesh Jhunjhunwala-backed Star Health and Allied Insurance’s IPO will end for subscription later in the day.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Liquidity holding market up; prefer Bata, Westlife Development: Nirmal Bang

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rahul Arora, CEO of Nirmal Bang Institutional Equities, on Tuesday, said that Westlife Development stock is knocking on the doors of Rs 10,000 crore of marketcap and the minute it crosses that threshold, it will come into the funds of a lot of midcap fund managers.

“On a technical factor, I would look at Westlife Development. The stock is knocking on the doors of Rs 10,000 crore of marketcap and the minute it becomes a Rs 10,000 crore company, it comes into the funds of a lot of midcap fund managers, who for technical reasons cannot buy right now. I think it’s more on the discretionary side, maybe Indian Hotels Company, INOX Leisure, Westlife Development and one of my old favourite stock, which I would continue to buy is Bata India,” Arora said.

Also Read: Dine-in making a comeback, slowly but surely: Westlife Development

On equity markets, he said that there is a large pool of liquidity that is keeping markets from falling. Arora also said that there is no reason to sell in a market that is flushed with liquidity.

Also Read: Bata expects 30% stores to be run on franchise model in about 4 years

According to him, there are not too many alternatives to IRCTC. “Indian Railway Catering and Tourism Corporation (IRCTC) is the best performing private sector company in the last 2-3 months. I would not sell this company, even if I have made money on it, I would stay put. I am not looking at this company from valuation, I am looking at it from the point of view of runway to growth. If you sell IRCTC then what do you buy next,” shared Arora.

For the entire interview, watch the video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow