Theory of rotation which is working in the market: Kunj Bansal

ET Now: Mahindra & Mahindra and Tata Motors two ends of the spectrum one is export, second is domestic. Tata Motors the domestic business is not doing well, for Mahindra & Mahindra the tractor business is doing well. Can both these stocks move up in a synchronised manner?

Kunj Bansal: Okay, first as I said earlier that these kind of short term movements might not necessarily be justified on fundamentals and reasoning valuations. It will be more of the momentum that whoever participated and who has not. As we have already been seeing in the market there is the theory of rotation which has been working.

One day we have public sector banks participating, other day we have infrastructure stocks participating, third day we again have private sector banks participating and in that despite defensives not participating as much in last three months on some on and off odd days we see suddenly IT and interest coming back, yesterday we saw pharma interest coming back; that is one reason that I feel M&M and Tata Motors will participate, number one.

Number two Tata Motors domestic business is hardly any now 15%-20% so to that extent it will be global which will continue to lead the rally. I guess it will be the investor interest, the FII flow which will now look at that where else we leave. If we expand our horizon to include the other stocks of automobile sector, why did Ashok Leyland move up 30%, I do not know.



ET Now: More than 30 actually.

Kunj Bansal: So if that can move up so might as well Mahindra & Mahindra be. Eicher Motors of course continue has continued to move up and moves up justifiably on the fundamentals whereas while it is Volvo, Eicher JVs numbers are in line with the commercial vehicle industry and are down. It is two wheeler business of Royal Enfield continues to go up which is almost 100% growth in the volume and could be more.



ET Now: Which is one auto stock you own.

Kunj Bansal: Yes.



ET Now: So you own Eicher Motors?

Kunj Bansal: Yes, we own Eicher Motors that is right, we partly own Mahindra & Mahindra as well. Very selectively Tata Motors, we do not own Ashok Leyland.