As bullish the commentary maybe from Jubilant, the street has been more hooked up with the Q-Comm platforms, the online retailers when it comes to food delivery as opposed to the QSR traditional spaces. Do you think it makes sense perhaps to have exposure to both in your portfolio?
Pankaj Pandey: So, see, from a consumption perspective, our sense is that the wallet share which is increasing is increasing for say hotels, hospitals, or even from investment side AMCs, unlike what you see for FMCG and other categories.
Overall sense is that a lot of these trades are crowded and so our sense is that there are two-three categories which are structurally looking positive.
Demand is expected to be about 6 odd percent, supply is going to grow at 2%, and we have seen ARRs inching up and hospitals is no different. And the other consumption category could be on the premium side be it autos or be it two-wheeler or four-wheeler.
And in addition to that within BFSI or non-BFSI segments, for example the AMCs look very attractive to us whether it is a largecap performing or midcap performing.
These are the categories which we feel are expected to do a lot more better than a food delivery because that looks more crowded to us. Do you think there is an investment opportunity when it comes to steel, specifically perhaps led by Tata Steel? We were just looking at the numbers and they look pretty okay. The visibility for both the UK as well as the Netherlands business as well seems like FY26 is going to be the year, India demand in any case was intact.
Pankaj Pandey: Oh yes. When you look at steel as a sector, the context is that the price is at a four-year low, then we had imports at a 10-year high and with 12% kind of a safeguard duty, our sense is that for a company like Tata Steel which did somewhere about Rs 12,000 per tonne kind of a ebitda in the domestic side and with company guiding for a 3,000 kind of overall price appreciation, the numbers are going to get better for Tata Steel. And even their UK business, the kind of cost reduction what they are taking, that will be visible in the next year. So, from that perspective Tata Steel is expected to do very well.
We like the entire steel as a pack. Even Hindalco’s number, Novelis especially ebitda per tonne was better than our estimates. So, cement and steel are the two sectors where we are constructively seeing a material improvement on a quarter-on-quarter basis. Steel will see a better set of numbers in Q1.
So, the maximum opportunities are going to lie there. I will not really say the same thing about the sail because see typically in a scenario when the prices go up, the most inefficient player sees the highest price appreciation. So, from that perspective, we would still want to prefer Tata Steel or JSW Steel or Jindal Steel & Power.
How are you viewing the entire paint segment especially Asian Paints? You think the negatives are all priced in because this is the one which had that big shake-off and pretty much got downgraded across the board and derated so to speak when Birla Opus came into the market.
Pankaj Pandey: So, on the paint side, when I look at say Asian Paints, last two quarters the volume growth has been about two-three odd percent which is substantially lower than the long-term growth of low-double digit what we expect, while margin pressure is expected because Birla Opus is offering nearly 10% kind of a lower prices and while the price damage in Asian Paints largely looks done because valuation-wise it is trading somewhere about 44 times on a forward basis, but for us to look at this stock or the entire paint segment constructively, I think the volume growth needs pinch up.
Till that time it does not happen, it is going to remain sideways or in case if the price intensity goes up, I would not rule out a minor correction as well from a price perspective.
