Positive on private lenders, state-run SBI; see opportunities in cement space: Mayuresh Joshi

In a chat with ET Now, Mayuresh Joshi, Fund Manager, Angel Broking, shares his invstment ideas.

ET Now: Share with us some investment ideas that still look good from a buying horizon of about one year.

Mayuresh Joshi: We have been extremely optimistic on financials. Within that space, we like private lenders. We also like state-run State Bank of India. But the thing I like the most in the Q4 earnings season was the numbers by midcap cement companies. The companies have been disappointing in terms of their earnings.

It was a mixed bag for the midcap universe. That said, once the realisation starts improving over the next few quarters, the return on equity will be very different.

The earnings by cement cement makers work as a multiplier to GDP. If one assumes GDP to grow at 8 per cent, then the earnings of cement makers should grow by at least 12 per cent over the next couple of years. In fact, the Ebitda per tonne for lot of these midcap cement majors actually had shown signs of stability in the fourth quarter. With the input cost stabilizing and the EV to tonne being at very reasonable levels for most of cement players, the EBITDA to tonne should gradually improve over the next few quarters.

Therefore, even as Q1 and Q2 will be soft for cement makers, I am extremely optimistic on the space over the next couple of years. I like JK Cement, JK Lakshmi and Mangalam Cement. These stocks look extremely attractive from the next couple of years’ time horizon.