Vivek Goyal, joint managing director of Tailwind Financial Services, said in an interview to Moneycontrol that Hyundai Motor India is in a slightly better position due to benefits from premiumization and high mix of SUV sales. Comparing the valuations of both the companies, he believes that the current valuations of Maruti Suzuki and Hyundai are very close to each other.
Giving his opinion on different sectors, investment advisor and chartered accountant Vivek Goyal, who has more than 10 years of experience in the equity market, said that he is in favor of placing defensive bets. He has invested in banking as well as pharma, IT and consumption stocks where valuations have remained within the right range in the current weak market conditions.
Do you expect slow growth in the passenger vehicle segment but better growth in the two-wheeler sector? What is your view about the auto sector?
Vivek said that he is closely monitoring the monthly sales figures of the auto sector. Growth in the passenger vehicle segment is expected to remain slow. And double digit growth is expected in the two-wheeler segment. However, September sales remained slow due to Shraddha Paksha. But the upcoming festive season will be important to gauge demand at the dealership level. Current sales figures may also include inventory being stocked ahead of festivals. Therefore, retail sales should be closely monitored to get a true idea of the demand situation.
Which sectors have you chosen to invest during the recent correction?
Vivek said that his focus remains on those sectors where valuations have not increased much. Despite the recent market correction, the market is still very expensive. Vivek Goyal said that he is in favor of placing defensive bets. He has invested in banking as well as pharma, IT and consumption stocks where valuations have remained within the right range in the current weak market conditions.
Do you think Maruti Suzuki is a better value stock than Hyundai Motor India?
Two important trends are being seen in the auto sector – premiumization and shift towards green energy. The reason for this is increasing prices. If we compare Maruti Suzuki and Hyundai, their current valuations are quite close. Hyundai’s focus on SUVs and premium models like Creta and Verna, along with its upcoming EV launches, also hold good growth potential. Maruti, on the other hand, has gained strength with its strong hybrid models like the Grand Vitara and Invicto. We have to keep an eye on what customers prefer between EV and hybrid. Hyundai Motor India is in a slightly better position so far due to benefits from premiumization and high mix of SUV sales.
Are the prices of private banks cheaper? Does this mean we should start investing in them?
Vivek said that the valuation of big banks seems right. They had lagged behind during last year’s market rally. However, smaller banks appear to be above their historical averages. In other words, small banks are looking expensive. The biggest concern for the banking sector is the pressure on Net Interest Margin (NIM). However, the asset quality is in good condition. In such a situation, Vivek likes banks with strong deposits and CASA (current and savings account) base as well as NBFC stocks whose focus is on housing finance.
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Should we wait for the US elections to buy technology stocks?
Vivek says investment decisions should be based on sector outlook and stock-specific targets rather than revolving around events like the US elections. If there is a good correction in the fluctuations before the elections, then one should consider increasing investment in technology stocks.
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