Sachin Shah: Hyundai’s IPO is set to be a solid investment for the long haul, according to Sachin Shah of Emkay Investment Managers. He highlights that Hyundai’s strong financials, dominant market position, and innovative approach, especially in electric vehicles (EVs), make it an attractive option for investors. Shah’s enthusiasm stems from Hyundai’s performance both in India and globally.
On Trimming Portfolio Profits
Shah admits it’s tempting to take some profits now, especially given the recent gains. His portfolio has seen over 40% returns in the last year and around 25-30% annually over the past three years. However, he prefers to remain largely invested in equities due to his role as an equity manager, leaving cash calls to wealth managers. He notes some areas of market euphoria, particularly in small-cap stocks, which suggest a need for profit booking and reallocation.
Portfolio Adjustments
Shah’s strategy involves shifting more towards large-cap stocks. Over the past year, he has moved from a 60-40 split between large and mid-small caps to a 70-30 split. This adjustment is based on valuation comfort in sectors like auto, private banking, IT, and pharma.
Private Sector Banks
Shah believes the worst is over for private sector banks, with their growth outlook strong for the next few years. He sees significant potential, noting that the sector has been under-owned despite decent earnings growth and a reduced valuation premium.
For auto OEMs, Shah is focused on premiumisation rather than volume growth. He sees significant opportunities in the premium segment of two-wheelers and SUVs, driven by the aspirational young Indian market. He cites companies like Eicher Motors and Maruti as key players in this trend.
Hyundai IPO Outlook
Shah is optimistic about Hyundai’s upcoming IPO, highlighting the company’s solid financials, strong market presence, and progressive approach towards EVs. He believes it will provide a valuable investment option alongside existing giants like Maruti.
Electronics Sector
Shah views electronic manufacturing as a long-term trend driven by government support and a shift in global supply chains. He expects the sector to continue growing over the next 5-7 years, with companies benefiting from increased demand and firm order books.
Mid-Tier Engineering Companies
Shah acknowledges that while mid-tier engineering firms have performed well, their current valuations are high. Future returns depend on their ability to break into export markets, which will validate current prices and provide growth opportunities.
In summary, Shah’s perspective reflects a cautious but optimistic approach to current market conditions, emphasising strategic adjustments and focusing on long-term growth potential across various sectors.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
