Tata motors shares: Start collecting HDFC Bank; better bet on Tata Motors DVR: Sudip Bandyopadhyay | Techy Kings

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“I always look at DVR because my voting rights don’t move the needle. So I prefer DVR simply because it gives me an extra chance and that’s what I’m looking for,” said Sudip BandyopadhyayGroup Chairman, .

We’re hoping we’re counting down to an all-time high in the index but other than that, just wondering if it’s time for the elephant to dance again? Do we now have to bet again on , one of the biggest underperformers of the year?
Absolutely right. I think there is nothing fundamentally wrong with it. There are many concerns about mergers, especially how SLR and liability

Limited will be handled in banking setup.

There are concerns about how they will unbundle the HDFC Limited subsidiary but if you keep aside for a minute, basically this merger should happen for a very long time. In the market, everyone is talking about it for a long time and it is probably the best thing to do for the long-term growth of both institutions.

Yes HDFC Limited needs a lot of liquidity on an ongoing basis to support its growth whereas HDFC Bank has a significant CASA pool and an opportunity to access a larger CASA pool through a larger network. Mergers are good things to happen. Yes there is some pain. When a transaction like this happens, consolidation takes some time but if one is a long-term investor and I have mentioned this before as well, this is a great opportunity to buy HDFC Ltd at the kind of valuation that was unthinkable before the merger was announced.

So this is a good opportunity to start accumulating HDFC Bank if one wants to build a long term portfolio.

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Is it a better bet or is the Tata Motors DVR a better bet? With DVR, you don’t get voting rights but frankly do we care about voting rights? We only care about absolute arbitrage.

Yes absolutely. I always watch the DVR because my franchise doesn’t move the needle. So I prefer a DVR simply because it gives me an extra chance and that’s what I’m looking for.

As far as Tata Motors is concerned, they have entered electric vehicles and we have seen price increases in the market and I think this will continue for some time. My only concern is what is happening in China. There is a general economic slowdown in China and we have to remember that for consolidated Tata Motors, the major contribution comes from JLR and JLR has a significant business in China.

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I am quite wary about Tata Motors because of what is happening in China. Rest, all is well as far as domestic business, commercial vehicles and EVs are concerned. Everything is positive except for the China angle which needs to be remembered.

Isn’t it interesting that China, which is JLR’s second largest market after Europe, is seeing an economic slowdown yet Tata Motors shares are doing car tires?
Of course, that’s what I’m trying to say that while the euphoria is understandable, one shouldn’t lose sight of the facts of what’s happening in China. In fact, yesterday or the day before I read about what the big German car companies, which have a very important business in China, are doing and planning to deal with this slowdown.

We need to start looking at Tata Motors with that lens, the sooner the better. Like I said, everything is fine except for this problem in China as far as Tata Motors is concerned and since it is a big part of the business, one has to be aware and careful to that extent. I would not jump to buy Tata Motors at this stage. I wouldn’t recommend an exit either but I will be watching the counter closely behind developments in China.

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