What is it that you are making, still early details yet and we are getting takeaways from the cabinet meet which is currently underway on an approval of overs Rs 3,000 crore for railway projects.
Mayuresh Joshi: Two things — one, in terms of the approval ticker that you are just seeing on your screen that is something which is incrementally positive for these rail stocks and again the allocation that has been made in budgetary terms has been a decent one.
So, whether you are talking about commissioning of new lines, changing from the gate system that you probably got, and expectations in terms of more coach is expected whether it is Vande Bharat or the metro coaches as well, so there is sufficient work at play. The only issue with the manufacturing stocks per se is that the top line might grow but it has shown a slight sign of sluggishness as we speak in terms of execution and margins to a certain extent, to the likes of a Titagarh or even to the likes of a Texmaco Rail constraint to that 11% to 12% mark.
So, margin expansion beyond that seems improbable and therefore it is how much you execute which also is probably time bound to a certain extent, which means that there is a definite sense of earnings coming through with definite margins expected to come through. On the other hand, the other infrastructure or the support related stocks that you are speaking about, the likes of an IRCTC as an example, even the financing stocks as far as railways are concerned the whole expectations in the ecosystem in terms of the working capital cycle is something to be seen out for as well.
So, again, they do give these selective sporadic moves. But are they structural in nature? My own sense is that because of the lumpiness in earnings, the earnings are always not reflected in a compounded demand on an annualised basis and therefore, they become very-very stock specific.
From a momentum perspective, stocks can continue showing momentum in my opinion. And also, Tex Rail is one stock if they continue doing well in terms of execution, the kind of ecosystem that they have probably created and the expectations in terms of the balance sheet growth, specifically the recovery we have seen after covid and the sluggishness in the past two years, if they are able to overcome that, I think that probably can be a dark horse from the railway theme.
What is your own sense because at a time when we are still awaiting some details coming in from US and China’s talks in London and it seems like there is some headway definitely on the talks, but on the other hand you have companies like Maruti already slashing their production targets for their newest entrant in the e-club that is e-Vitara and they are talking about…, while they are going to be making up the targets eventually in the year for the next two to three months, they are actually scaling back.
Mayuresh Joshi: No, so if you probably look at the proportion in terms of the EV cars or the EV platforms or the EV models as a percentage of the overall top line, it is still not a major component and therefore with this whole rare earth magnet issue that is expected to continue, if the resolution comes in as you are putting out, I think that is great news for global auto stocks, that is great news for the auto industry in general. But if this lingers on a tad a bit more, like Maruti has likewise put in his statement, maybe the short-term pain might be there. But as supply chains probably get worked out again, the second half there will be some element of recovery that one really expects. But if there is a resolution that comes through quicker than one really expects, the expectations in terms of normalisation of volumes specifically on new launches as far as EV cars are concerned, might actually continue doing well.
Now in the Indian context, the expectation in terms of competition intensity, pricing, all that is going to play a big part in terms of how volume growth probably takes place and take shape as well and there is a huge ecosystem in terms of the appetite for EV cars and the adoption of EV infrastructure as well whether you are calling for fast chargers or fast charging stations as well.
So, to that extent it is an evolvement as we speak and therefore within the space itself what we really continue to hold in our global portfolios within the PV space, M&M is something that we still continue liking and holding and within two wheelers TVS Motors.
