, asksandipsabharwal.com.
Bharat Electronics certainly and that is some stock we have also been holding because they are working on various components, electronics, and so they have very high-tech operations also. So, to that extent they should clearly be one of the leaders. Hal is more on helicopters and fighter jets and all of that and engines.
So, there we need further advancement. So, can we get technology transfers to HAL to actually make fifth, sixth generation fighters is something we need to see because what they are making right now is something of the past, but still they have orders and they will execute and their earnings will grow.
On that front, maybe some more things need to be done. On the private sector side, there are several companies working on various things, but the information flow is limited. So, it is very tough to actually gauge what, which company is doing. So, there are a few names which are there, but then at these prices after the runup many of them are trading at as high as 100 PE also. So, people need to wait out to look at many of those companies.
Yes. The company is doing very well because of the fact that they are operating in a business segment where they have significant competitive advantage. So, when people talk about moat, in many businesses on the capital equipment side the actual moats are limited. But here they have a definite moat on the water side.
They have been winning larger and larger orders globally which are multilaterally funded or in India which are central government funded. They have a strong order book and the good part is last two-three years they have also been generating significant cash flow.
So, they have become completely debt-free. And on valuations, I mean, it is not a cheap stock in the traditional definition where stocks used to be very cheap, but then on the midcap side looking at the earnings growth picture vis-à-vis the valuation, I would think that the stock still has substantial potential.
Sandip Sabharwal: We have never had a holding in Protean per se, but then I have tracked the company and like the managements which come out and say that when there is a positive it benefits them a lot, but when there is a negative say, it has no near-term or short-term impact and all, those managements typically it is tough to trust them. So, we need to watch out for what happens over the next few quarters and see how the things pan out. I would think that given that future growth prospects get compromised, the current valuations still are looking high.
At this juncture now, markets have run up. We are no longer bombed out and we are not in a froth. So, how do you see markets moving? I mean, the journey from fear to greed, will that happen? So, another 10-15% from here before we reach that climax. Is that how the pendulum could swing?
Sandip Sabharwal: Yes, it looks like, I think that will happen. So, we will reach that stage in a few months in my view and then the markets will give some sort of correction. But till that point of time, there could still be decent upside in many companies.
So, Bajaj we know, L&T we know, anything apart from that?
Sandip Sabharwal: So, on the largecap side, so banks and all you know, ICICI and all that we have been holding for a long time, but I would still think M&M will still do well, L&T like you rightly said will do well. I think the Reliance outperformance cycle should still continue. I think Bharti will continue to do well. So, so many largecap companies in my view should continue to do well. Where the outlook is a bit hazy are sectors like technology, pharma, etc. Except that I think on the largecap side most of the other segments look fine.
