Wealth management firms poised for structural bull run, consolidation seen: Hemang Jani

"I do find Bosch quite interesting with a very good diversification across auto and the consumer products. Pfizer and Abbott and all, the companies are great, but they have really run up in the last let us say about one-and-a-half months and it is hard to figure out what is the trigger. Is it the US treaty or something else because the numbers are reflecting anything material in terms of surprise, so not too sure about those ones," says Hemang Jani, Independent Market Expert.

Anything which you like in the MNC space.
Hemang Jani: So, when we look at MNC companies, I do find that Bosch actually reported very stable set of numbers and now when you look at their revenue streams, apart from the typical consumer products related work that they do, certain components from EV side they have started getting and even when you look at their global company, their revenue stream has become much better, the large component of EV and related services.

So, I do find Bosch quite interesting with a very good diversification across auto and the consumer products. Pfizer and Abbott and all, the companies are great, but they have really run up in the last let us say about one-and-a-half months and it is hard to figure out what is the trigger. Is it the US treaty or something else because the numbers are reflecting anything material in terms of surprise, so not too sure about those ones.

I know we were talking about exchanges, but what about the larger capital markets pool, your AMCs, wealth managers, brokerages, mutual funds, anything that looks nice?
Hemang Jani: If I have to pick one particular theme, I would certainly go with the wealth companies because there I do see a case for a structural bigger bull run.

So, something like that 360 One or Nuvama where there is also possibility of a consolidation at a broader level. So, I would be going with that theme. As far as some of the brokerage firms are concerned, I think that they have really run up quite smartly, but I am not sure what kind of growth they will report given the new regulations, particularly those firms which have a higher dependence upon the options revenue, let us say Angel One and few others who do not have a diversified revenue stream. I think that the valuations are not justified in the current scenario, there might be some disappointment in terms of earnings, at least in the near term.

I have to discuss autos, given that it was quite a mixed bag when it came to the monthly sales data, but it has already been ahead of time arrival for the monsoon and it seems that it is going to be above normal this time, that is the prediction from the IMD. Do you think that is going to give a fillip to the two-wheeler sales hereafter along with that a rate easing cycle?
Hemang Jani: Yes, I do think that there will be a certain positive rub off that one can really expect from a normal monsoon and a much better sentiment. Also, the fact that the rate cut may happen very soon, whether it is 25 or 50 we all can debate, but the fact remains that the trajectory is going to be downwards.

Definitely, it boards well for some of the auto names. What really stood out for us is Mahindra & Mahindra which is delivering 20% plus kind of growth in the most challenging environment. This EV portfolio is at risk because of the treaty that you may have with the us, but the impact will not be more than 3% or 4%, so that stands out.

And the other one is TVS, which again is delivering much better versus Hero or Bajaj. So, I definitely think that Mahindra and TVS are the two names that I like to go with.