D-Mart is not expensive, it is “beyond expensive”
Sanjay Dutt made his contempt for the valuations at which D-Mart is presently trading quite clear.
“Contrary to the consensus on the street, I do not consider it expensive. I think it is beyond expensive,” Sanjay said with a smirk on his face.
“I would not be a buyer anything for Rs 25000 crore market cap. It has to come off 50-60%,” he added.
He also made it clear that investors who care about aspects like risk and reward should not touch the stock with a barge pole at the present valuations.
“I do not buy anything till I do not find value and so I do not get taken in by fads and fancy,” he said.
“It is not my cup of tea, sorry,” Dutt said with an air of finality.
It is notable that Sanjay Dutt’s opinion is in consonance with the view expressed by the majority of the stock market analysts.
However, Porinju Veliyath is the striking exception to this. He had also earlier expressed the view that the D-Mart IPO was expensively priced. However, he did a sudden somersault and bought 10,000 shares on the listing day at a 100% premium to the IPO price. Porinju explained that the reason he did this is because he foresees 300-400% gain from the stock over the next couple of years. Whether he is justified in his optimism requires to be seen.
Forget Yes Bank, Buy 5x/ 10x multibagger gems like Karnataka Bank, Lakshmi Vilas Bank, Karur Vysya Bank
Sanjay Dutt also made his contempt for investors making a beeline for Yes Bank’s IPO quite clear.
“For the amount of money Yes Bank has raised ($10-11 billion) just now in this QIP, I can name five good private sector banks with relatively good balance sheet, which can be bought whole with just the QIP money ….
Banks like Karnataka Bank, Lakshmi Vilas Bank, Karur Vysya Bank are gems which over three-five years time will give 5x and 10x multibagger gains. You are not going to find Yes Bank 10x from the current levels,” he said.
This Black sheep arrives on time to make tunde kebab of investor money. Once shy, second time smitten investors. https://t.co/IpdYXXGo0p
— Shyam Sekhar (@shyamsek) March 23, 2017
Phenomenal opportunity to buy potential multibagger stocks at dirt cheap prices
Sanjay Dutt explained that on a price to book comparison (with Yes Bank), other private banks like Karnataka Bank, Karur Vysya Bank and Federal Bank are quoting at “dirt cheap” valuations even though they are doing the same business as that of Yes Bank.
“The discount between a Yes Bank and a Karnataka Bank is just so stark that I am surprised that no one is tempted to really buy into a Karnataka Bank and a Federal Bank,” he exclaimed.
He also emphasized that the financial services sector presents a “phenomenal opportunity” in the mortgage business, commercial finance business, private sector banking etc.
“It is a sitting duck right now,” he said implying that we should aggressively buy banking and NBFC stocks.
It is worth recalling that Vijay Kedia is a major shareholder of Karnataka Bank. He has also recommended the stock to us as his “best pick for 2017”.
Interesting Bulk Deals..
Karnataka Bank: Vijay Kedia buys 15 lk shares at Rs 122
IIFL: IDFC Bank buys 1.5 cr shares at Rs 317
— Ayesha Faridi (@AyeshaFaridi1) February 7, 2017
Federal Bank is also very familiar to us given that Billionaires Rakesh Jhunjhunwala and MA Yussufffali have a stranglehold in it.
Federal Bank has also been recommended by Akash Prakash Of Amansa Capital on the basis that it has “rediscovered its mojo” and has “significant upside”.
So, we have to agree with Sanjay Dutt that small private banking stocks like Federal Bank, Karur Vysya, City Union Bank, Lakshmi Vilas Bank, Karnataka Bank etc are safe as houses and can be aggressively bought.
Reliance Industries and Reliance Capital are good bets with “phenomenal potential”
Reliance Industries is the best large cap bet for an investment over the next two to three, five years, Sanjay Dutt said.
He added that he is very bullish about Reliance Capital and that he has already pocketed big bucks from the stock.
“It has phenomenal potential,” he said with a big smile.
Major sell off is not expected even if earnings disappoint
“Even if we are in for a disappointment, we are not going to have a major sell off,” Sanjay Dutt stated in a soothing tone.
He explained that the overall technical picture and the market psychology is looking very positive right now. He also pointed out that investors are not over-invested, they are not totally gung ho and their portfolios are not overleveraged.
He also emphasized that the fact that everyone is looking for an opportunity to buy on a dip itself means that there won’t be a meaningful dip.