IndiGo set for strong growth, but SpiceJet still a risky bet: Hemang Jani

"Like in the recent quarter, their numbers were much better than Hero Motors or Bajaj and I do think that because their portfolio is more lined up towards electric vehicles, the smaller two wheelers, they could do much better than the other two players. At the same time, Mahindra & Mahindra has been one of the best performing names," says Hemang Jani, Independent Market Expert.

The other segment that I want to focus in on is autos and a bunch of brokerages have also raised their red flags and cautioning on the auto sector right now. They are saying that there is a downside risk to the EPS estimates. They are saying that there are high probabilities of downgrades to the FY26 volume estimates across the auto pack and the key reason they are saying is that with metal prices now inching up, margins also have a downside risk. What are your thoughts on how auto should be treated right now and whether this is really the one space after a significant market correction that you would want to be in to try and catch up on the rebound?
Hemang Jani: Overall, yes, there is going to be a bit of a risk of slowdown and a bit of margin pressure also. But what we must understand is that certain pockets within the auto theme could really display very good growth, a case in point being TVS.

Like in the recent quarter, their numbers were much better than Hero Motors or Bajaj and I do think that because their portfolio is more lined up towards electric vehicles, the smaller two wheelers, they could do much better than the other two players. At the same time, Mahindra & Mahindra has been one of the best performing names.

Even their EV launch has been so successful but was shadowed by the possible entry of Tesla and I do not think there is going to be any material impact as such. And on the core business, both tractor as well as the automotive side, Mahindra is doing exceptionally well. So, I would go with some of these names. But yes, not too positive on the names like Hyundai or Maruti and some of the other two-wheeler names at this point.

Since we were just talking about the summer and the heat wave that we might experience and already some parts in the country are undergoing that, give us some sense on the power space as well, because that is a connected sector and what we are understanding from the reports, they are suggesting that it is not just the demand that is holding up and is expected to surge from here on, but even the pricing power is back and the prices are stable right now. Give us some sense that within the power space what has been your read through as well as any of your top bets?
Hemang Jani: Typically, you do experience much better growth for the power generating companies, because the demand typically tends to pick up during the summer months and these stocks also have corrected in the last four months along with the market. So, I do like some of the names like Tata Power, NTPC, maybe some of the other, I have already touched upon the engine companies like Cummins and Kirloskar Oil.

So, I do think that Tata Power and NTPC are relatively better placed because apart from the core power business, they also have a significant investment in the green energy in the renewable part where there is going to be a good amount of excitement with growth being there. Definitely, next at least for three to four months perspective, the operational performance of these companies would be very good.

What is the sense that you are getting about Paytm? It lifted off from those lows, but it has been stuck around the 760 range for quite some time now.
Hemang Jani: So, operationally, company seems to be doing much better after that big shocker that we had maybe a couple of years back and on most of the parameters, whether you look at UPI, their GMV flows and the traction, all of that is looking quite interesting.

The only thing is that one is not really sure whether you will see some big companies getting into this, something like a Bharti or a Jio or any other company, maybe Adani Group, so that part is something that is not very clear.

If you see a big investor coming into the company in the near term, that could be a very big trigger and a re-rating for names like Paytm. Otherwise, yes, from a pure platform plays, this could be an interesting stock to look at because you have so much to offer in terms of companies when it comes to quick commerce or food delivery. But fintechs, you do not have very established player as such. So, from that perspective, Paytm does look attractive.

Let us talk about the aviation space in depth. Also, you had the IndiGo analysts meet and also, in fact, the commentary coming in from IndiGo on the way forward and they are pretty positive. You have brokerages this morning that have given thumbs up to IndiGo, saying that, yes, looks like it is headed for brighter skies going ahead. What is your take on IndiGo, as well as SpiceJet?
Hemang Jani: IndiGo has been the most outlier or outperforming stock in the last few months. It is almost close to now 5,000, so absolutely no doubt on that. Operationally, things are incrementally looking good, both in terms of passenger traffic, the way they have actually moved into international arena and the way they have launched the international flights and their market share on the international side is now at 20%, which is very significant.

So, I do think that InterGlobe could be one of the best performing stocks in 2025 and beyond, but the only thing is that the stock has run up, so I would be more comfortable entering into it if there is a mild correction of about 3% to 4%, but as a core portfolio stock, extremely positive. About SpiceJet, a lot of hopes have been there about this being there at a low valuation, but companies yet to display any meaningful progress on their offerings or financial performance. So, if somebody wants to have a very small allocation, it is a different story, but not too comfortable with the current state of things.