Do you think that maybe from those pure play, realty, residential and commercial plays, one could now look at perhaps domestic infra?Sudip Bandyopadhyay: Both actually. In fact, as far as realty is concerned, we believe that we are in a secular positive cycle and probably we are in the middle of the cycle, so there is still a long way to go before it runs out of steam. If I have to buy a realty stock, I will probably go and buy DLF on the basis of the premiumisation which they are undertaking and the kind of land banks they have in NCR. Amongst the Mumbai builders, we can look at Macrotech as well as Oberoi Realty, both do look good. Godrej Properties also can be looked at.
As far as construction, infrastructure related stocks are concerned, I have been positive on that and considering that we are having a trade war brewing in the world and things like that, it is better to focus on domestic themes and construction infrastructure is purely domestic. Also, the government is committed to spend Rs 11 lakh crore plus, which is roughly about a lakh crore per month. So, a significant investment from the government side as well.
Private capex is also picking up. All put together, domestic infrastructure and construction companies will do well. I do like Larsen & Toubro and I have been liking it for a long time. There are multiple triggers or reasons but if somebody has to pick up one stock, maybe that is a stock to be picked up. I also like Patel Engineering. They occupy a niche which is water irrigation and hydro electricity. These are again focus areas of government. The company has a strong balance sheet. The unfortunate management change also has kind of panned out well. So, valuation wise, it looks attractive. So that can be looked at too. The big one is this Saturday, both HDFC Bank and ICICI Bank are due to report their numbers. The best performer this year, of course, has been Kotak. But what is the broad expectation from the private banks this time? Sudip Bandyopadhyay: BFSI and of course, large private banks do look good. ICICI Bank has been performing quarter on quarter very well. Seven-eight quarters they have beaten all estimates on pretty much all the parameters. So, even this quarter they are expected to do well. What is more interesting is HDFC Bank. They have come out of the funk and performance has improved in all areas. The monthly numbers have also been encouraging. The recent reduction in interest rate on deposits augurs well for the margin point of view. So, by and large, we are looking at a positive quarter and also a very positive commentary from the private sector, large banks. Within the PSU basket, would you like to flag off any such space which appears to you as a value buying opportunity because of late, stocks like BHEL have fallen 30% to 40%.Sudip Bandyopadhyay: I do like defence electronics and that is one space where anybody building a long-term portfolio should focus on. In defence electronics, Bharat Electronics, BEL clearly stands out. They cater to the Air Force, Army, Navy, all three wings of the armed forces and the order book is absolutely robust. Execution has been very good over the years and the balance sheet is strong. So, definitely, we are positive. Also, with rearmament happening in Europe and multiple other parts of the world, the opportunity for Bharat Electronics to get government approval for exports of electronic items goes up significantly. They also have got into adjacencies, which is the metro network equipment and metro network related products and that is where incremental business opportunity is emerging. Fundamentally, we like the stock and we have a target of Rs 400 for a one year kind of a period. This can be bought at current levels.
