HBL is in a sector which is in market fancy. Its business spans sectors like railways, defence, data centres besides the traditional business. Till date only 3 players remain qualified to address the Kavach orders. ( there can be more players going ahead, but as of now there are only 3. ) So HBL can get a decent pie of this lucrative business. And with govt keen on inducting new Vande Bharat trains , the business momentum for the segment should remain strong.
We should get more idea about the company and its prospects once the results are out and especially if company puts out an investor presentation.
For sectors in fancy the usual story is that some of the individual stocks attain stratospheric valuations before the rally halts. Case in point being some chemical stocks like Tattva Chintan, Clean Science and technology, and ancillary plays to chemical sector like GMM Pfaudler and HLE glasscoat. You can check the kind of valuations these kind of companies attained before the rally halted and fizzled out.
Currently riding HBL is like riding a tiger. You are scared of your position atop the tiger and you are scared to get off too.
Having a selling framework in such a scenario is often difficult. I guess it would have to be a combination of price strength and business prospects and q1 results should give some idea about this. ( Getting stuck to the PE is of no use because in these kind of scenarios, markets tend to price in future earnings and not the past ones. )
| Subscribe To Our Free Newsletter |
