Long & Short of Markets: Raamdeo Agrawal on value migration; Rahul Chadha on playing economic upcycle & more

The Indian economy’s journey from $3 trillion to $5 trillion should happen on the back of credit intensity, says MOSL’s Raamdeo Agrawal. Being very bullish on banking space, the market veteran says, top 5 PSU and private banks may underwrite another Rs 110 lakh crore worth of credit going ahead, which is a huge opportunity. Read more on Raamdeo’s take on value migration in banks, how to play economic cycles, contra view on energy companies, outlook on auto and gold financiers in this week’s edition of ‘Long & Short of Markets’.

Value migration in banks

Ever changing technological space is rapidly transforming banking space as well. The amount of value migration from public to private banks the sector has seen in the past 25 years can double in the next ten years, says market veteran Raamdeo Agrawal. Value migration in banking is happening in credit disbursal and that is going to give a massive edge to the lenders that do well, he said.
Read More

How to play economic upcycle

Investors have to play economic cycles with some patience, while giving time for operating leverage to kick in. In the later part of the upcycle, as the topline of the companies grow, the story of corporate profits entirely changes for good, opines Rahul Chadha or Mirae Asset Global Investments.
Read More

Gold financiers in for a good time ahead?

Bet on gold financiers is a good play on reopening trade. Economy returning to pre-Covid normalcy means restarting small businesses and that is a good omen for gold financiers, says Chakri Lokapriya. Another factor looking good for gold financiers is a stable gold price in rupee terms.
Read More
Contra view on energy companies
While Dalal Street is going gaga over oil and power stocks over soaring oil, coal and natural gas prices due to surging demand and supply side constraints, Kotak Institutional Equities is singing a totally different tune. Citing regulatory constraints on power utility companies and inability to raise retail prices for oil companies might play spoilsport, says Kotak, calling the hype on Dalal Street just noise.
Read More
Good times are here for auto cos?
Emkay’s Sachin Shah is very bullish on the auto sector for the next 24 to 36 months’ period. Focusing on the auto ancillary companies, he adds, ‘these companies are global play’. Expert oriented businesses of auto ancillary companies and rising per capita income of India, under penetration of personal mobility in the country bodes well for the sector in the medium term, he opines.
Read More