HDFC Bank underperformance may continue for next 2 years: Sandip Sabharwal

economictimes.indiatimes.com:

Sandip Sabharwal, asksandipsabharwal.com, says “the HDFC merger was not in the interest of minority shareholders and now that it has gone through, people have to accept it and evaluate the company as a whole. I still believe that the next couple of years, at least six quarters will be tough for HDFC Bank and to that extent that is getting reflected in the stock price movement. So the underperformance could continue for some more time.”What is the outlook when it comes to the IT basket? Are you seeing renewed interest when it comes to some of the midcap IT stocks?Yes, the IT stocks have been buzzing on the midcap side.

But the macro outlook continues to deteriorate for these companies. So, there is some sort of disconnect. So, especially on the largecap side, valuations are reasonable but growth outlook again is hazy.

We have to be very selective in IT even if people want to pick but otherwise the sector broadly remains an avoid at this stage.There is also commentary coming in from Bata today. They are not completely committing to that news on strategic tie-up with Adidas, but are saying yes we are discussing potential tie-ups with multiple global peers. Can Bata regain its lost ground?Definitely.

Among the consumer stocks, this is one stock we have accumulated at lower levels and the thesis is that in the footwear space, they have a very strong presence. Their recent forays into newer types of footwear, especially sneakers has been accepted well by the market. The overall footwear industry has been on a slowdown in India, but Bata is pretty well positioned and any such tie-up or global sourcing for the parent which also has been under discussion for some time but the timelines are unknown, could be a significant positive