Top market voices on Bharti Airtel, midcaps, chip shortage, and more

SUMMARY

Here is what market gurus and industry captains said Bharti Airtel, HDFC twins, midcap stocks, and more on August 13, 2021.

By CNBCTV18.comAug 13, 2021 9:08:57 PM IST (Published)

On chip shortage | Baba Kalyani, CMD, Bharat Forge: It is a pretty universal phenomenon. There is a shortage of chips all over the world. But I think most OEMs are taking adequate steps to deal with it. Some are losing some amount of production, but I don't think that is causing a big loss in production. I think what is really happening is that the production of the lower end passenger car vehicles is going down and the production is shifting towards higher-value products. So all in all, yes, it is a shortage, but I think it is really not in anybody's control.

On HDFC twins | Pashupati Advani of @globalforay: I have had them for both for a long, long time. I would say one of the things is you know, the HDFC twins are a core of a lot of portfolios. You never really see someone who says I want to get out of the stock because they are in a sector where they keep growing. Of course, there is a bit of cloud over the NPAs, but I think HDFC certainly has looks good because you know, low cost housing is coming, there are schemes for people to get into housing so they stand to benefit. Plus they have all these underlying companies like the insurance company and general and life companies and the AMC, which are all their subsidiaries. HDFC Bank is running a very tight ship, they are probably the tightest retail bank, and their management systems and all are very, very good so they are benefiting, they are the top of the pack.

On midcaps | Prakash Diwan, Market Expert: In the midcap space, there is a very clear rotation that is happening where undervalued stocks – some of them probably from new themes like recycling and electric vehicles and things like that, vehicle scrappage policy being imminent, there seem to be some new triggers there but otherwise I think sugar, speciality chemicals, some of these sectors seem to be a bit overdone and you need to be a bit cautious given the stretched valuations.

On Bharti Airtel | Dipan Mehta Director, Elixir Equities: First a disclosure that we own shares Bharti Airtel and so do our clients. Very pleased with this rally in Bharti Airtel, which has been a big underperformer and is now just about playing catch up. Positive that the stock can even go up 15-20% from these levels over the next 5 to 12 months. The real trigger point was when they decided to raise the tariffs across the board in terms of removing certain plants, which were not profitable. And then the post-paid tariff was increased even earlier. The biggest issue with the company was that though they were adding subscribers, the average ARP was remaining static but now I think from the September quarter numbers it will be evident that it has also moved up. A lot of these gains will flow to the bottom line considering the most of the costs are fixed for the company. Every now and then we are seeing some strategic disinvestment taking place in the African businesses or some of the other businesses, which means that a lot of the other ventures or initiatives are now finally getting scaled and there is value being built over there. Investors are recognising that this particular value creation effort is underway, and that the stock underperformed. If one were to look at the cash profit the company is making, then the stock is quite attractive at around 11 times cash earnings per share for the current year.

On Aurobindo Pharma | Gurmeet Chadha, Co-Founder & CEO of Complete Circle Consultants: The numbers were slightly disappointing largely led by the US business. Need to see more clarity there. For me, it is an avoid, there are far better players in APIs, in CRAMS and other places in pharma.