Hey Dhruv! Sai here, 27. Commenting since it is appreciated
I think I can totally understand why 65% of your equity is sitting in finance. It is probably a no brainer that financials are the most favourable in terms valuations now, however the markets don’t seem to appreciate it. Also, as we believe the GDP to move up, it is only common sense that we think financials have to do well when the country’s economic performance goes up. The likes of HDFC, Kotak are definitely good buy for long term. LIC infact was a good buy some months ago, considering the valuations in mind comparing the EV ratio to that of HDFC Life and SBI Life.
Though you are betting on the spending capacity improving in terms of Bajaj Finance, SBI Cards which would also obviously happen, it would only be fair if you also looked at the investing potential which would improve in the future. We are seeing in front of our eyes how investing in stocks and MFs have become easier and the numbers will improve in the future. With that in mind, I cannot understand why you chose not to have an AMC business in the financial lot. Even from a valuation perspective, a couple of the businesses are still trading at a decent FY25x PE, though the market leaders have run up. And all these businesses are in fact showing stronger earnings growth and beating the market expectations.
Still have a lot more to discuss and understand, but let’s go ahead with this for now
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