“Another theory which goes around, public sector banks could possibly see consolidation and should that be the reality, then probably you are going to see the rally even those stocks as well,” says Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd.

I wanted to get your view exactly what is happening in the markets. Banks have taken the charge and how record high levels coming in for the Nifty Bank. You have the private sector banks taking the lead and now you also have the RBI LCR guidelines which will actually give a further fillip to the sector.
Deven Choksey: Well, I believe that the overall environment as far as the banking stock is concerned is remaining quite conducive. In this particular environment, we are seeing the fall in the interest rates.

Now, all of that is going to probably create a significant amount of earning upside for most of these banks and that is what probably we are seeing. Another theory which goes around, public sector banks could possibly see consolidation and should that be the reality, then probably you are going to see the rally even those stocks as well. So, in my viewpoint, the fundamentals remain absolutely convincing and that is what the rally is all about.

Just wanted to have your take on the IT space because just yesterday we have seen all these IT counters making a comeback because for the last three IT names we have seen the earnings coming in, but do you believe that the worst is behind maybe for the IT counters and maybe it is time to once again look at to some of the darlings of the market that we have seen back in 2024 especially from the midcap space?
Deven Choksey: Well engineering, R&D companies in IT space they remain really favourite because their customer segment, they need them, they probably put in larger amount of orders and that is where probably the higher amount of growth is.

So, in my viewpoint, the likes of LTTS, likes of LTI or even for that matter Tata Technology, Tata Elxsi, KPIT kind of companies have already shown good amount of order inflow in them and they are seeing the higher amount of profit margin, they are talking about higher amount of profit margin also in subsequent quarters to order inflows.

So, we remain relatively more bullish on the prospect of these companies. Some of the largecap IT companies may still take time, I do not think that they are immediately going to show relatively different performance, but at least the downside is limited because the stock price corrections have already happened. So, maybe from current levels, we might see a bounce in some of them on a given day with a positive news coming into them. We remain relatively more positive on the IT space as a whole. So, would like to consider at a lower level any stock which are fundamentally strong.
What is your take coming in on the metal space now given the fact that this sort of a news is now out of the way, what are the key triggers that you will watch out for if you have to remain invested in the metal space now?
Deven Choksey: So, on one side the crude oil prices are remaining low, so the input cost is on downside and probably for next one or two years as we see it, the input cost is going to remain lower. At the same time, metal as a commodity is resorting to the alternate fuel, alternate energy and that is where probably the larger confidence is.

Today, if you see even in parts, in some of the metro commodity companies, the renewable power has already started coming in, maybe very small percentage but going forward this is only going to grow from here on.

So, given that situation you are basically talking about, higher amount of profit margins for the companies in times to come, may not be in one or two quarters, but in times to come you are likely to see the impact of higher profit margin because of lower input cost.

On the other side because of A) the safeguard duty maybe a temporary, but more importantly post war related situation, the war related situation coming under control that is an indication, of course, but if it is coming under control, the construction activity will start in those economies and that is where the commodity would probably once again come back as far as demand is concerned.

Domestically we remain pretty confident about India, domestic demand remaining strong because of infrastructure spending and also because of industry’s capex programme.

So, overall we believe on one side the volume, on the other side the margin both are coming in favour for metal as a commodity, maybe it may trade in a range for a while, but it is a good opportunity to buy and sell on rise.