Alpha Ideas 20-20: Why These Portfolio Managers Are Betting On Private Banks 

The Nifty 50 has fallen 4.89 percent since the budget as the Finance Minister increased taxes on the super rich, brought buybacks under the tax net and plans to increase the minimum public float.

And even as investors remain uncertain, at least two portfolio managers suggest buying private banking stocks. Axis Bank Ltd. and ICICI Bank Ltd. are the top choices for Turtle Star’s Sunil Shah and Aksa Capital’s Rishi Maheshwari.

It is the right time to invest in the two banks because the stocks have corrected, Maheshwari told BloombergQuint on the sidelines of the Alpha Ideas 20-20 conference in Mumbai.

Axis Bank and ICICI Bank have written off most of their non-performing assets and could see a write-back, Shah said, adding that it could drive profit. The change in management at both the banks also augurs well, he said.

Here are the key highlights from the conversation:

Rishi Maheshwari

• Auto stocks can see good recovery . There is value in Mahindra & Mahindra Ltd. after the recent correction.
• He is short on retail and long on auto.
• Doesn’t think the festive season will alone change how people are spending.
• Consumer-facing companies bearing the brunt of the economic slowdown will come out of their problems next year.
• Expect margin pressure for Jubilant FoodWorks Ltd.; growth of food delivery apps likely to hurt same-store sales growth for operator of Domino’s Pizza and Dunkin’ Donuts outlets in India.

Sunil Shah

• He’s bullish on gold financing companies such as Muthoot Finance.
• Investing strategy is to play safe and not be the first ones to take the plunge and invest in disruptors.
• The budget should have tried to turn around the economic slowdown, which has been hurting businesses in sectors including automobile and fast-moving consumer goods.
• Private capex is not happening because stressed assets are still on the block under the Insolvency and Bankruptcy Code.

Watch the full interaction here:

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