Bharti : Both Telecom and DTH are overcrowded spaces and with recessions the growth will simply vanish. While it does have money, it is too highly valued to survive the recession. I'm probably in a little late, but why not.
ICICI and Axis - banks : I'm not quite sure the worst is over for these banks. ICICI seems like it's wonky, what with the whole drama abroad going nuts. And as for Axis, while I think it's a good bank, I think the current valuation is a little too rich at around 15 P/E.
DLF and HDIL : The real estate sector is hosed. And these are literally the only fellows left standing. Again, late in.
HDFC : NOt the bank, but the housing development finance company. There's not much higher priced housing left to develop: so where's the 20 P/E coming from?
Full Strategy here, and look at the spreadsheet also.
Disclosure: no positions, may have some due to our systems though. Don't trade this, this is not advice, only education, bla, bla, bla.
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>Deepak,
Agree with ICICI Bk. In PE terms HDFC might look expensive. But it has more than 20% stake in HDFC bk. If you include insurance and Mutual fund business, it doesn’t look expensive. May be it will fall in the panic days. It will come up quicker than market.
Do you think Axis bank is a rick bet. Considering it’s size, record and CASA. Do you see any red flags in bank books like in ICICI bk. Please respond.
11.14.08 at 8:43 PM
>Kanagala: Even with those stakes, the P/E is too high. MF and Insurance growth will stall, and so will HDFC bank’s growth. Axis is a good bank, but banks don’t get a 15 P/E in a recession.
No red flags in ICICI – just an overvaluation. Am thinking it should bottom out at 200 or so.
11.15.08 at 3:59 AM
>Deepak,
Thanks for the update. I hold some investments in axis and hdfc bk. I guess i will sell them in rallies and buy at lower prices. How many days do you think this recession will last.
11.15.08 at 8:26 PM