00:00 Very little correlation between political parties elections and in fact in the last
00:13 four general elections, 1999, 2004, 2009 and 2014, we have actually seen very marginal
00:20 movement one month pre-elections and phase one and post-elections verdict, very much
00:27 except for a 22% run up in the 2009 and 2014, I believe there was a 10% meltdown, 2004 there
00:37 was a 10% meltdown after the verdict when Manmohan Singh came in.
00:42 And as I said post-election verdict, whoever comes, you're not going to see a big runaway,
00:47 one way street, there are lots of other factors, you mentioned risks which are there, other
00:52 than election, I've already said election I don't see as a risk.
00:55 We are actually looking at earnings, the economy on the backdrop of lower interest rates, lower
01:00 inflation rate, stable rupee and stable oil price, we should see earnings pick up and
01:07 as long as GDP growth rates remain at 7% plus, we will see an impact of structural reforms
01:15 continuing any structural adjustment like you had GST which was a big announcement which
01:19 is now factoring in and stabilising what's going to happen on those fronts and on the
01:25 global front, we are not an island, we are not independent of whatever happens worldwide
01:30 which is significant will impact and lead into India.
01:33 So we are looking at both economic and geopolitical factors globally which could cause things.
01:39 So this is where we are placed right now, so the caution flags are up, though there
01:43 is also excitement, I won't call it euphoria.
01:48 Clearly, those who have got debt leverage, you see interest is not an appropriation of
01:55 profits, dividend is, interest has to be paid.
01:59 So you will see companies which are in debt, which have got a high debt component, unless
02:04 it's the sector dynamics like power, they would be under pressure on margins, on performance
02:13 and therefore pressure on paying their EMIs and defaults would be, we have already seen
02:18 that happening, the power sector, we have seen the solar sector, we have seen Suzlon,
02:22 wealth destruction is simply immense and promoters are forced to pledge their shares and then
02:27 top them up and one problem leads to the other.
02:31 So vulnerabilities, look for companies, simply stay away from companies which have got a
02:36 debt exposure which is fairly huge and are going to face profitability compression on
02:44 their margins and the whole set of these sectors.
02:49 I am seeing value in the hospitality industry, I am seeing value in the banking industry,
02:55 select pockets, I am seeing value as I said in the disruptive sector, in the AIF, I told
03:01 you the start-ups, I am seeing some great entrepreneurial skills coming, entrepreneurship
03:06 which happened in 1990s and modern reforms came and I am seeing that happening, driven
03:10 by technology, you know the technological drive.
03:12 So I am seeing a lot of pockets, real estate, selected pockets, you can, infra, selected
03:19 pockets, I am seeing technology, selected pockets, I am seeing a lot of great value
03:24 in a lot of companies, PSUs, some of them you will be surprised when I say PSUs, they
03:29 say oh Gaurav they never go up, I would beg to differ, you know NBCC when it came out
03:34 earlier, so I will give you a hint here, you know, look at the PSUs that have come out
03:40 in the last two years with IPOs, even as recently as last week, I think let's stop there on
03:46 the hint.
03:49 The company is Bombay dying, I have conviction on it, I had issues, several issues covered
03:54 but you have a company whose market cap is around 3000 crores, whose got development
04:00 value of their land is around 30,000 crores in Mumbai, which will break out in the next
04:04 7, 6, 7 years, it's got land, forget the textiles and polyester, we are not buying
04:08 it for that, so it's Bombay living, not Bombay dying, Bombay reality is the story
04:12 actually, it's got, the whole group if you go back, annual reports of 10 years, you
04:17 will find they announced 10,000 when they wanted to monetize like lot of companies who
04:20 had land in Bombay, they said Mumbai, it's 10,000 acres we have in our group, 700 acres
04:27 in Mumbai, 70 acres in Bombay dying, so they have already started developing that, you
04:31 have seen island city centre, so over the next 6 to 7 years, you will see all this breaking
04:35 into the balance sheet, so just put yourself with a capital of just 41 crores, 2 rupees
04:41 or 21 crores shares, if your net worth just climbs to 1000, 2000, 3000 crores over the
04:47 next, you know just see what your book values would be and see what your price would go
04:53 up to, so what's the downside risk on this, do you own due diligence, I am not going to
04:57 go into, Vadia's is what he is and one more question, do you know that they own 75 lakhs
05:03 shares out of Bombay Burma, which is a Vadia group company, which in turn holds 50.70%
05:10 of through associated, through other wholly owned subsidies in Britannia, which has a
05:18 market cap of 75,000 crores plus at around 3000 rupees, so you can say about 38 to 40,000
05:25 crores is owned by Bombay Burma, if Vadia's had to close down everything and monetize
05:31 at the market price, you will get 40,000 crores coming into Bombay Burma from their investment
05:37 in Britannia.
05:40 (upbeat music)
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