Buy Shriram Transport on correction: Satish Betadpur

ET Now caught up with Satish Betadpur, CFA, Global Research Director, Independent International Investment Research PLC, to get his views on the outlook of companies that might get a banking licence from the government.

A couple of NBFCs have suddenly started finding favour in the market on the back of potential banking license prospect. Shriram Transport Finance really picked it up in the session. There is other news as well that is driving up this stock. What is your call?

Just getting a banking licence is not going to be a trigger for earnings growth in the near term. In the longer term, it is positive. We are still focussing on near-term businesses for some of these stocks. For example, Shriram Transport, the business has done well in the near term, and it is an attractive stock. Valuations are bit stretched at this point but on any correction, that would be a good stock to own but just because they are getting a banking license, we are not going to like. It does not change much in DCF valuations with just a banking licence.