Don’t see any reason to exit Kotak stock at current juncture: Jagannadham Thunuguntla, SMC Global

In a chat with ET Now, Jagannadham Thunuguntla, HoR, SMC Global, shares his views on some banking stocks. Excerpts:

ET Now: Kotak Mahindra Bank, as we speak, is now trading at 1240 post the ING deal. Does it deserve to trade there?

Jagannadham Thunuguntla: A great deal for sure for Kotak in terms of strategic positioning, geography and deal pricing. Deal structuring is so well suited for them. When you are trading at high PE and PB multiples, it works perfectly for you, using the high-priced currency to buy the low-priced currency.

ET Now: If someone has brought Kotak Mahindra Bank at 900 or 1000, is today’s pop giving a good exit opportunity?

Jagannadham Thunuguntla: It maybe just a tactical exit, if you want to time. Strategically speaking, I do not see any reason one should exit. Yes, if you want to play around a swing maybe of Rs 100-150, that is a different subject. But one year down the line it should be at higher levels.

ET Now: So you think one can still buy it at these levels?

Jagannadham Thunuguntla: Fresh buying may not be warranted, but if you are already holding, I do not see a reason for selling it in a hurry.

ET Now: I mean it is rising tide right now, everything is going up, but HDFC Bank is not going up. That is the best in the breed. It should have gone up the first and the fastest.

Jagannadham Thunuguntla: What is helping today is not necessarily the deal, but it is the deal pricing that is helping Kotak. So, stocks like HDFC Bank have already rallied so much. One day one will take lead. That is a different thing, but eventually this is a market, no point in getting into targets.

ET Now: Right now what is looking good on the pricing front from the bank, especially if you pick out something?

Jagannadham Thunuguntla: Some NBFCs missed out getting the banking licenses. They may be fencing to buy some small and medium-sized banks. Some deals maybe happening.