Consumption, banking stocks offer best value amid market weakness: Sameer Dalal
Dalal noted that while the major indices appear to be near lifetime highs, the underlying market tells a different story.
“There are some opportunities in this market. When you look at it, the market is so concentrated that everyone thinks we are far from lifetime highs. But if you look at individual stocks, many of them are trading at 52-week lows and that brings opportunities,” he told ET Now.
His current picks include Titagarh Rail Systems, where he expects multi-year strength as capacity expands and demand remains firm.
“We think the opportunity for them over the next three years is extremely strong. The traffic will continue to see growth. There will be new bike capacity and you’ll see profitability increase.”
Banks remain another area of conviction. Dalal continues to pile up IDFC First Bank on dips and also buys IndusInd Bank.
“IDFC First Bank is still barely a dollar or a dollar and a half down, but if it gets closer to 75, we think it’s a great opportunity to keep adding.” It also supports a recovery in consumption and believes the lag in demand may finally be reversing.
“We think the consumption story will eventually pick up. It’s probably been a long time coming.”
This confidence has led him to stock up on names like Westlife Developers, Devyani International and Metro Shoes, where he sees a strong premium trend.
“They’re bringing in new premium brands that will scale, so there’s a clear premium play.”
In the renewable space, it continues to add Suzlon and Sterling & Wilson. Dalal also highlighted Sammaan Capital’s sharp decline as a compelling opportunity.
Why was Sammaan Capital fixed
He explained the drop in stocks and pointed to regulatory overhang. “This has happened for the simple reason that the Supreme Court has ordered Sebi to come up with an answer as to why they have not taken serious action against certain allegations.”
He added that the company has already addressed concerns about old loans from related parties. “Most of these loans have been repaid in full, and for those that haven’t been repaid, they’ve written off and completed the process.”
Still, he acknowledged the mood remains cautious. “Until this overhang remains, people will question whether this ₹8,800 crore investment will happen and that has created some jitters in the system.”
Still, he remains optimistic about the company’s fundamentals. “They’re well capitalized at the moment, so it’s not a big deal.”
Air rally unconvincing
Despite the surge in airline stocks such as SpiceJet, Dalal maintains a long-standing stance that they are avoiding the sector altogether.
“This is one industry that has been known to turn billionaires into millionaires. He argued that aviation is globally fragile and prone to sudden breakdowns. “Whenever even a small thing changes, even the best companies get hit pretty hard.”
Pointing to current operational issues, IndiGo said the impact could have been much more severe in other markets. Meanwhile, questions about whether SpiceJet could benefit from IndiGo’s woes do not affect him. “For me, aviation is something that I don’t look at… Is it a sector that I invest in for the long term? No, no.”