Some people believe this could be a repercussion. Do you think, in the interim, these capital market plays have already seen their peak?
Chakri Lokapriya: Clearly, retail volumes are likely to come down, and as a result, brokerage margins will take a hit. These stocks have done very, very well, as you mentioned, and therefore, they are likely to take a pause. Where the volumes will eventually settle remains to be seen. They’ll probably be at least 25–30% lower than where they are today.
I also wanted your view on the entire wires and cables space. Amid all this news flow, we’ve seen mixed earnings — a good show from Polycab, weaker performance from Havells, and KEI seems okay, barring some nominal margin pressure. How are you viewing the wires and cables segment right now?
Chakri Lokapriya: This segment is clearly dependent on overall economic revival because cables are used across various industries. Against that backdrop, as this whole tariff issue gains more clarity — hopefully in a couple of weeks — companies that buy from Polycab and others will be able to firm up their demand. Until then, the stocks, while having corrected earlier, have recovered a bit, and valuation-wise, they still look reasonable.
Why do you think pharma has been underperforming lately, barring select CDMO players and a few small- and mid-cap names? If we look at the recent stock moves among large generic players catering to the U.S. market, there’s clear underperformance. Is this only due to the tariff overhang, or are there other pressures on the sector?
Chakri Lokapriya: The word “tariff” has been overused in the past few months, and we’ll probably continue using it. Until things settle, this kind of volatility and uncertainty will continue to play on investors’ minds across sectors. However, the actual number impacting companies like Dr. Reddy’s and other pharma players may turn out to be much lower than feared. So, if there’s any weakness in pharma, we would look to buy into it.
The IT pack hasn’t been doing too well lately. Only Wipro managed to give a bit of a boost to the sector with strong deal wins and an encouraging outlook. What’s your expectation for Infosys? It does manage to surprise us sometimes. Are you expecting a surprise this time?
Chakri Lokapriya: A positive surprise would be if they can hold on to margins as expected. The deal pipeline will likely remain around the same level, and the key is conversion — which, unfortunately, is unlikely to improve significantly. If they show any improvement there, we could see a strong uptick. But again, “tariffs” is the key catalyst for the sector. So, we’ll have to wait. It’s not the time to go out and buy aggressively. But as long as they are doing around $2.5–3 billion, the stock should do reasonably well.
What’s your take on SBI and its QIP? The shares are getting onboarded today. Both futures and cash are trading around ₹817 per share. What’s the implication of such a large fundraise? Some believe this could increase SBI’s weightage during MSCI and FTSE rebalancing.
Chakri Lokapriya: SBI is extremely well placed, in my opinion. With the ₹25,000 crore capital raised, its book value now looks far more attractive. The adjusted price-to-book multiples will come down further, approaching 1x. Tier-I capital stands around 12.9%, which will enable the company to lend more freely. Its NPAs are well under control. I believe the stock could easily rise another 20–30% from current levels over the next few months.
