Here’s why Vinit Bolinjkar is bullish on Maruti Suzuki

“I guess that the larger breadth of the market that is there and the broad participation that we are seeing is very-very strong and augurs very well for the times going ahead,” says Vinit Bolinjkar, Ventura Securities.

The big question on everyone’s mind is how much more from here and do you think the market has further headroom to go?
In my opinion we have only just started out and the reason is that typically the large cap index constituents have not really participated and it is the second line of stocks which are moving. We have the auto stocks and we have the FMCG consumer basket moving up. So it is a very broad-based rally and ICICI Bank and HDFC Bank have been kind of pretty silent. They have been stark underperformers and I guess that has got to do with the valuation premium that ICICI Bank has vis-à-vis HDFC Bank. HDFC twins which are on the verge of merger are not moving up because the event is on the anvil. I guess that the larger breadth of the market that is there and the broad participation that we are seeing is very-very strong and augurs very well for the times going ahead. And as we see a rotation of money from the slowing down economies to the fast-track economies I think we will see ourselves decoupled very-very soon and we will be in an orbit over it.

Within autos where is the fresh opportunity to buy or would you stick with the leaders M&M and Tata Motors?
I think one player that we initiated recently as of yesterday was Maruti. We are very-very bullish on Maruti. Our reasoning is very simple, Maruti has been a dominant player in the sedan category and the small car. Now they after doubling their market share in the SUV segment they are talking of doubling further their SUV market share to about 25%.

So what happens is that not only is the revenue per car going up but also the EBITDA is growing and because of this measure we expect the company to maintain its margins and also continue to grow at a heady clip.

You see the company has just launched Jimny today and a couple of models which will be launched in the next 12 months and after that we will be seeing a blitzkrieg of EV model launches as we go into 2030.

So what you will have is Maruti having a complete portfolio of vehicles and with the fresh product cycle I think they are very well set.

But one point that everyone is missing out and which can be a very big game changer is the fact that today in the small cab segment Maruti is the only dominant player out there and when you get EVs in that segment they are going to have the lion share because nobody has another model catering to the entry-level segment.

So I think we are expecting a 50% upside on Maruti in the next 24 months and if you just hold on to this talk it will be one of the stock outperformers and could also prove to be a multi bagger over the next four to five years.

What to do with banks now, they have had a decent performance while last year was all about PSUs it is this year when the underperforming private banking names have come to the fore, what next for banks?
I think the growth story will play out. I believe that once the HDFC-HDFC merger is out of the way we will see the money plough back into the banking sector and it will take leadership once again. Having said that, within this space we think that SBI which is the underdog could be one of the stark outperformers in our opinion and I believe that this stock is headed towards 1000 plus levels in the coming days.

In a sub 600 you are expecting 1000 plus levels on SBI. So that is quite interesting. But where in the FMCG space do you see value?
See we like Adani Wilmar, it has not participated at all. It is on anvil to complete 1000 crores of capex and next year it will be completing another 1000 crores of capex. So, 200 crores done in 23 and 1000 crores each in 24 and 25 for a agri commodity company that is very-very big capex plans. I think the big fireworks are going to be in that stock.

You talked about SBI, how you are bullish on that. But what do you think is the problem area for the likes of Kotak Mahindra Bank or even an Axis for that matter which has not moved? Even ICICI, HDFC, I understand there is merger overhang. What about the others?
I think Axis has to demonstrate more performance after they have taken over the consumer business from Citi. People are looking to see their metrics improve and if their metrics improve, I think the stock will play out.
You know, exactly what you see and take place in the Vectors Food, once they were able to demonstrate that they are a good category player then the re-rating started happening. In the same case in Axis Bank, once they can prove that they can walk the talk, I think that is where the re-rating will start taking place.

A lot of action in the small cap space, right? Which are the top ideas that you are looking at this point of time? Any new coverage, any other stocks that looks interesting?
I think NBCC is an interesting stock idea to look at. They have got a very-very strong order book in place. And a number of projects are coming on anvil which will give them a lot of higher margin projects because of their developers in the instance. And this stock is in my opinion headed for 50% upside over the next two years.