Abhijit Chokshi on 5 safe infra and auto ancillary stocks to bet on

Abhijit Chokshi, Founder, Stockifi.in, is tracking infra at the moment. In midcaps, he likes NCC, GMR Airports and is tracking them for the medium to long term mainly because in all the Budgets, a consistent rise in the public sector spending has been seen. Now the trickle-down effect is happening. In infra, besides these two, L&T would be a safe bet among the largecaps.

This is going to be a truncated week for the market, but the news flow is extremely heavy. The RBI policy, banking updates, IT previews trickling in and global markets would be on. What is your own sense and where are we headed now?

I was just discussing with a friend recently that last year we saw the new-age companies going bust, especially with a massive 40-50% collapse in the US markets and now this year, the banks have been battered. Going forward, the sentiment is definitely looking a bit weak, but I do see value in certain pockets, especially in the Indian markets. I will be discussing certain stocks. Just a standard disclaimer, as I run a Sebi registered advisory, that I might have a position in some stocks I might be discussing.


I understand you did have positions on Orient Electric, Garden Reach, etc, and I am not sure if you still track them, but Orient Electric is taking it on the chin right now because of the change coming in at the leadership position. What is your take on the incumbent as well as the new person that is going to be at the helm?

Orient Electric is one of my old recommendations. We have done a partial exit also to all our registered clients in that. It is a hold for all of our clients and it is an FMCG play, it is a safe hold going forward for the next two to three years’ horizon. Sector wise, I am more tracking infra at the moment.

In infra for as far as midcaps is concerned, I am liking NCC, GMR Airports. These are the two companies which I am tracking and I like them for the medium to long term mainly because in all the Budgets we have seen consistent rise in the public sector spending. Now the trickle-down effect is happening.

In infra, these are the two and if somebody wants to have a like a safe bet, then L&T would be my pick among the largecaps. In auto ancillary, I like Minda Corp and Uno Minda. The auto ancillary sector has been holding up amidst the latest carnage. In capital goods also, I like ABB and Power India. Capital goods is also one of the sectors I have been focussing on lately.

What is your take on the consumption space? Do you have any preferences within this area looking at mid and smallcaps?
In consumption, one of the recommendations I had given was from the Adani Group. , so Adani Wilmar was one of my pick and I continue to hold partial positions in that. But other than that, the largecap names like Bata and all would be a safer option going forward.

How would you dissect the private banking space and are you an investor in PSU banks?
I have specifically avoided banks because I have never understood their balance sheet to be honest. However, there are certain NBFCs which I like. One of the stocks I would like to recommend is Poonawalla Finance. Earlier it used to be Magma FinCorp. Now there has been a promoter change. I am extremely bullish on this stock from a medium to long-term point of view.

Apart from Poonawalla FinCorp, the other stock you are quite bullish on for a long term is Hitachi Energy. What do the fundamentals look like because it is not a very well-researched or covered stock?
Hitachi Energy was formerly known as ABB Power Products. It was a demerged power grid business of ABB. I have this knack of sticking to quality and this is one of the few quality MNC level businesses in the listed space. Right now, the top line is around Rs 4,200 crore and the market cap would be around Rs 13,000 crore. These kinds of businesses will always look optically expensive on the face of it, but going forward, looking at their order book and the sector in general, I believe it has a solid potential. It is like a compounder as well as a potential multibagger going forward.

Are you avoiding IT as a space?
Yes. We have reduced our exposure to the sector. We have largely exited from Persistent and LTTI as well. We have majorly exited from IT sector at the moment.