December rate cut could spark market revival: Chakri Lokapriya
«So, consumers and companies need to see the other side of the coin, that is a cut of rates. So, while food inflation is high, I think if there is a December cut, that would provide one of the catalysts,» says Chakri Lokapriya, Managing Partner, RSB LLP
What is your view? Are we in for a long winter or we are nearing the end of this decline?
Chakri Lokapriya: Nifty is down about 10%. Earnings are down, if you look at the various sectors saw 10% to 15%. And on the other hand, some of the PSU stocks are down 40-50%. So, at that perspective, I do not think there is much downside, but what is clearly needed is some kind of a catalyst for earnings to revive upwards. Now that catalyst can come from RBI rate cut. I know people are talking about it being postponed to February, but RBI has increased rates by about 250 basis points, very short period of time. So, consumers and companies need to see the other side of the coin, that is a cut of rates. So, while food inflation is high, I think if there is a December cut, that would provide one of the catalysts.
Swiggy is better or Zomato is better? I am not talking about service. I am not talking about preference or menu card here. I am talking about stocks.
Chakri Lokapriya: Clearly, Swiggy is a far lower valuation today. It trades at 7.8 times is what Zomato trades at which is probably about three times.
So, both are similar sized companies. They have similar market share. Only the thing is Swiggy is likely less profitable. So, the valuation differential could be made up.
