Amid this shift, Parag Thakkar from Fort Capital offered insights into which companies within the new-age pack still make the cut. “Yes, because see I will tell you, one of the companies that has little bit excited me is Lenskart. Of course, I have not yet acted and I am not yet bought in my fund PMS, but at least that company makes a profit, 100 crore pat in this quarter, 350 crore depreciation, so a good amount of cash profit it makes,” he said.
He pointed out why the eyewear retailer stands out in a crowded digital landscape. “It is a need of the human being, plus due to its technology it is able to deliver fast at a reasonable affordable price. So, at least it provides some value and there is not significant competition I would say and there is lot of unorganized market to capture,” he said.
For Thakkar, Lenskart appears to be one of the few high-valuation, tech-linked businesses that still present a strong fundamental story. “This is one stock where I feel that amongst these new-age businesses or this highly valued stock, one stock which has attracted my attention. I have not yet acted on it, but I would say that amongst the recent IPOs, of course, Tata Capital I have been very vocal about it. I am extremely positive on that company,” he said.
His optimism about Tata Capital stems from its growth profile and pedigree. “Tata group company growing at 30%, how can you ignore that? When somebody wants to fund other company’s losses, then why Tata Capital should not be bought that I do not understand, there people say it is three time book value one year forward but it is a company which is Tata Group and growing at 30% and a business which we all understand,” he said.
AU Small Finance Bank Gains Momentum After FII Limit Hike
Another stock drawing renewed attention in the financial sector is AU Small Finance Bank, following the recent regulatory approval to raise the FII ownership limit from 49% to 74%. The expanded foreign headroom could trigger inclusion-led buying from global passive funds and improve the bank’s visibility across major indices.
Reflecting on his experience with the stock, Parag Thakkar said, “So, we have already invested in AU Small Finance in the last correction when it was around 700. Unfortunately, we have booked profits, so we are regretting it, because we continue to like this bank mainly because one, RBI giving them universal banking license was a validation that this bank is doing a good job on the governance part also.”
He noted that the bank’s loan composition adds resilience in a changing rate environment. “The other thing was that most of their loan book is fixed because it is wheels loan, it is automobile loans. So, it is a fixed rate loan book, so they benefit out of the rate cuts also. Plus, they also had a microfinance book and that microfinance book, the asset quality which was worsening has peaked, I would say it has bottomed out and so I would say that the numbers should look better from this quarter, that was the call we took but it gave us very quick 15-20% so we booked out,” he added.
Despite exiting early, he remains constructive on the bank’s prospects. “But I would like to say that it continues to be a good franchise in my view and which will typically benefit in the rate cut cycle because they have a fixed rate loan book and, of course, due to GST cut you have seen increase in volumes of auto also and which is 25% of their loan book, so that will also benefit,” he said.
The improving microfinance trends and growing auto loan volumes strengthen the bank’s outlook. “So, on one hand you have benefit from microfinance pain getting lesser and on other hand you have a benefit of growing auto loans and you have a margin benefit also. So, I think the stock is little bit expensive but it should do okay because of the passive flows also coming in and there is nothing wrong in the franchise in my view,” he said.
