Accumulating Voltas and Aditya Birla Retail on every dip: Sandip Sabharwal
Sandip Sabharwal, asksandipsabharwal.com, says “among the stocks that are in the value zone on the consumer side, something like Voltas and Aditya Birla Retail. We are accumulating these two stocks on every dip because I think the downside is limited. Near-term upside, I am not very sure about but over the next one and a half year, we should be able to get 25-30% out of these stocks. ”
I have always been an SBI bull because I am fascinated with what they have done, not only in terms of managing the branch networks but also in terms of the digital app, Yono. Do you think one should get slightly myopic and look at NIMS and pressures on retail spreads and get bearish on the stock or is SBI something which will continue to surprise us?
NIMs compression has been known, it is something which is out in the open and everyone knows that there is going to be NIMs compression.
Now the extent of NIMs compression is what we should be worried about, if at all. In my view, among the PSU banks, SBI will have the lowest NIMs compression given their huge CASA book and which continues to grow unlike many of the other PSU banks where that is more under pressure. I am not very sure about all these logics which have been given.
I do not own SBI at this stage because I prefer ICICI or Axis Bank. But all the logics which have been given seem to be very flawed.
Let us move on to the entire banking space. One would argue and say that SBI as well as the banking space is due for a comeback. Numbers are not going to be bad. The stocks, in a sense, have underperformed and consolidated?
The only thing I will be watching out for will be if there is any uptick in the entire NPA cycle and whether NPAs have started picking up because there was a lot of
