Chakri Lokapriya on his top bets from manufacturing and capex space & why it’s time to look at metals

economictimes.indiatimes.com:

Chakri Lokapriya, Managing Partner, RSB LLP, says among T&D companies, Skipper is one of the largest companies globally and in India, they are present not just in manufacturing but also in EPC. The stock has valuations on its side. Demand has been weak for the last two years for well-known reasons. Now the cycle is picking up; Second is JTL Infra, again a bet on the manufacturing theme. They are doing capacity expansion to meet demand and valuations are on its side. These are the bets largely revolving around manufacturing and capex themes.”

There are two moving parts, especially when it comes to the commodity construct. A) The rip-roaring ride that we are seeing in metals and B) the uptick in crude that the market is sort of ignoring. What do you make of the move in metals so far?
Chakri Lokapriya: If you look at what is happening in metals both domestically and globally, the US data has come out stronger than expected.

Their services are weaker, but the economy has kind of bottomed out though it continues to be strong. Similar data is coming out of China. All this means that cyclically commodity prices will start moving up with industrial activity picking up both domestically and globally.

Prices of copper and other commodities have already moved up and will continue to move up if industrial activity holds up. That is now being reflected in the stocks, both domestically as well as outside India and they have also underperformed. It is time to look at them as well.

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