Betting on 3 private banks: Deven Choksey, KRChoksey Investment Managers

In a chat with ET Now, Deven Choksey, KRChoksey Investment Managers, says will continue to hold position in are IndusInd, Yes, Kotak and even HDFC. Edited excerpts


ET Now: You have looked at Inox Wind in the past. We are talking about the disruption that is there in the business?

Deven Choksey: I have not gone through in complete detail of these numbers and discussed briefly with the analyst about the outcome of these numbers.

On a quarterly basis, I think they sound a little bit disappointing for sure but when you look at the company’s complete order book and the execution that they are planning to do in coming quarters, I think, it suggests that this quarterly performance may not be very seriously taken. That is what I think the outcome of the discussion which we have had.

Need to look into details and discuss with management on the subject of how much they would be producing in as far as the order book completion in concerned in these coming two or three quarters in this current financial year and how exactly the outlook is looking like.

I think one of the significant developments which is happening in the entire industry is that the wind and solar are basically coming together under switching technology and that is where one feels reasonably confident about the potential that this business is having.

Earlier, either the wind or the solar would get implemented but now these both are getting simultaneously implemented because of the availability of the switching technology in the grid. So from that perspective, if you look at it the solar would aid to the growth of the wind power going forward and that increases the potential of wind power going forward.

Both the companies -- Suzlon as well as Inox Wind -- are confirming to this development and probably moving in that direction. How much it could add to the growth, one need to see it because in case of solar power the CAGR growth plan for the next four or five years and getting implemented is somewhere around 45-50%, so that could suggest a higher growth happening even for wind sector simultaneously. They have to confirm on a quarterly basis because that is what the market wants. So I think we will come back on that aspect.

ET Now: What according to you are the attractive pockets right now which you see outperforming in the near term as well and could you share with us any stock ideas?

Deven Choksey: I think the near term liking continues to be in the BFSI space and particularly we like to stay with some of the quality NBFCs where the growth potential is on a higher side. On one side, there is retail credit growth which is growing very fast and probably some of the consumer facing NBFCs are definitely better placed.

However, I must add that they are expensively traded. So, obviously one will have to look at those companies when market gives some degree of correction. Otherwise, I think the housing finance companies within the NBFC space remains reasonably strong, they are not so expensively traded and I think you are having couple of companies definitely for sure that would give you a promise to grow between 20-25% on a CAGR basis.

So this is one space we continue to like. Also the fact that the insurance companies are filing for their IPOs and ICICI Prudential IPO is being filed in SEBI.

There would be some outcomes coming up on that side as well so that could possibly start reviving the insurance related valuation in the books of the companies where they are holding this business so we look at this space a little bit more carefully and we find that there is an opportunity out there as well. Otherwise, it is more of an individual stock picking within the auto space, auto ancillary space, even within the agri space, some of the capital goods ancillary companies, these are some of the areas where we individually pick up stocks where we like the business model of those companies.

ET Now: Which private bank would you buy into?

Deven Choksey: We continue to like and we continue to hold also the positions in three or four or them which are IndusInd, Yes, Kotak and even HDFC. So, I think we continue to hold our positions in these companies, not added recently any further into these particular stocks in our PMS so not too sure whether we will immediately buy into it but certainly any corrections of some degree would definitely invite buying action into these counters.