WEBVTT - Subtitles by: DownloadYoutubeSubtitles.com 00:00:00.080 --> 00:00:04.160 Porinju Veliyath, founder and chief 00:00:01.760 --> 00:00:06.000 executive officer in Equity Intelligence 00:00:04.160 --> 00:00:07.359 joining in uh this morning. Porinju, 00:00:06.000 --> 00:00:09.840 thanks so much for taking the time and 00:00:07.359 --> 00:00:12.800 pleasure speaking with you as always. 00:00:09.840 --> 00:00:14.559 Let me ask you this, which is I I saw 00:00:12.800 --> 00:00:18.560 the update that you put on social media 00:00:14.559 --> 00:00:21.760 which is the usual response by markets 00:00:18.560 --> 00:00:24.880 after a conflict is over and this is 00:00:21.760 --> 00:00:27.359 definitely an important point to make. 00:00:24.880 --> 00:00:31.199 The only point that I would like to add 00:00:27.359 --> 00:00:34.320 to that is the inability to identify 00:00:31.199 --> 00:00:36.960 when a conflict is going to get over. 00:00:34.320 --> 00:00:40.000 The vision of retrospect is flawless. So 00:00:36.960 --> 00:00:43.360 therefore amidst this conflict while we 00:00:40.000 --> 00:00:45.680 don't know when it is going to end, how 00:00:43.360 --> 00:00:49.920 should you respond? 00:00:45.680 --> 00:00:52.559 >> I good morning Alex um and the team. Um 00:00:49.920 --> 00:00:54.640 see these kind of conflicts uh it has 00:00:52.559 --> 00:00:57.199 happened many many times even in the 00:00:54.640 --> 00:00:59.199 last uh two three four decades much 00:00:57.199 --> 00:01:02.000 bigger uh things you know the code 00:00:59.199 --> 00:01:05.680 things and many other geopolitical 00:01:02.000 --> 00:01:08.320 crisis the financial crisis but you know 00:01:05.680 --> 00:01:10.159 in all the cases nobody was sure when it 00:01:08.320 --> 00:01:13.200 will end. 00:01:10.159 --> 00:01:15.920 It's the same thing uh as on right now 00:01:13.200 --> 00:01:18.799 and this uh it's true uh that this 00:01:15.920 --> 00:01:21.280 conflict is uh very complex. the whole 00:01:18.799 --> 00:01:27.439 world underestimated the power and you 00:01:21.280 --> 00:01:28.960 know uh of Iran. uh but um so there is a 00:01:27.439 --> 00:01:32.320 chance this may get prolonged but 00:01:28.960 --> 00:01:34.000 ultimately more than a official truce I 00:01:32.320 --> 00:01:36.000 personally believe this will just uh 00:01:34.000 --> 00:01:39.439 continue and it will die down like now 00:01:36.000 --> 00:01:42.000 the the Russia Ukraine war nobody's now 00:01:39.439 --> 00:01:45.280 talking about it even uh you know it's 00:01:42.000 --> 00:01:47.840 they are doing it like time pass so we 00:01:45.280 --> 00:01:51.200 don't know how this kind of geopolitical 00:01:47.840 --> 00:01:54.720 uh crisis and the war end whether it is 00:01:51.200 --> 00:01:58.000 gradually taking time uh but But uh the 00:01:54.720 --> 00:01:59.759 world is ready for such things at a much 00:01:58.000 --> 00:02:02.159 uh what do you call lighter version of 00:01:59.759 --> 00:02:04.240 it. But right now what's happening is 00:02:02.159 --> 00:02:06.640 very scary. There's no doubt about it. 00:02:04.240 --> 00:02:11.120 You know when the especially for India, 00:02:06.640 --> 00:02:15.440 India is dependent on the uh both in oil 00:02:11.120 --> 00:02:18.239 and gas which is uh very uh very big. So 00:02:15.440 --> 00:02:20.080 such sudden shock in terms of 00:02:18.239 --> 00:02:22.239 availability and the price going up by 00:02:20.080 --> 00:02:24.319 50% and 100% those things will create 00:02:22.239 --> 00:02:26.720 problem. There's no doubt about it. But 00:02:24.319 --> 00:02:28.400 please understand, you know, India has 00:02:26.720 --> 00:02:31.200 been 00:02:28.400 --> 00:02:34.640 uh deleveraging on these things. See, in 00:02:31.200 --> 00:02:38.319 201 12, 2013, you know, we had uh we 00:02:34.640 --> 00:02:41.200 were spending around um 5% of our GDP 00:02:38.319 --> 00:02:43.680 for oil and oil oil and gas import. 00:02:41.200 --> 00:02:46.480 Now we have world it is now around three 00:02:43.680 --> 00:02:48.640 just below 3% of our GDP. It's a 00:02:46.480 --> 00:02:50.480 tremendous achievement. Our discipline, 00:02:48.640 --> 00:02:54.000 we have been preparing for such kind of 00:02:50.480 --> 00:02:55.920 things. uh using the green energy now we 00:02:54.000 --> 00:02:59.680 we are seriously thinking about nuclear 00:02:55.920 --> 00:03:02.640 energy so you know the life will go on 00:02:59.680 --> 00:03:06.640 Alex it's not that uh you know so this 00:03:02.640 --> 00:03:08.720 is another event in the stock market uh 00:03:06.640 --> 00:03:11.519 another opportunity for the value 00:03:08.720 --> 00:03:15.800 investors for long-term investors uh you 00:03:11.519 --> 00:03:15.800 know to buy shares cheap 00:03:17.200 --> 00:03:20.239 >> so PNJ that's an interesting take that 00:03:18.879 --> 00:03:22.080 you're giving over here but let's let's 00:03:20.239 --> 00:03:24.720 understand you after these kind of 00:03:22.080 --> 00:03:26.480 crisis the kind of returns that do come 00:03:24.720 --> 00:03:28.480 in in terms of markets that's the key 00:03:26.480 --> 00:03:30.159 question because that's when investors 00:03:28.480 --> 00:03:33.120 want to know is this the opportunity 00:03:30.159 --> 00:03:34.959 which is ripe to start nibbling in uh 00:03:33.120 --> 00:03:37.200 historically you have markets which have 00:03:34.959 --> 00:03:39.519 performed really well post a warlike 00:03:37.200 --> 00:03:41.200 situation I mean a six-month average 00:03:39.519 --> 00:03:43.519 gain from the analysis that we've picked 00:03:41.200 --> 00:03:45.599 up from what you tweeted is what around 00:03:43.519 --> 00:03:48.879 17% and your now month average goes 00:03:45.599 --> 00:03:50.400 above 26% as well uh so where are you 00:03:48.879 --> 00:03:54.480 seeing those buying opportunities from 00:03:50.400 --> 00:03:57.840 the medium to long-term from your run. 00:03:54.480 --> 00:04:01.120 >> Yeah, it's again uh this event is uh not 00:03:57.840 --> 00:04:03.760 that simple. Um not because of I mean 00:04:01.120 --> 00:04:06.640 for the investment opportunity you know 00:04:03.760 --> 00:04:08.159 we are not extremely cheap like a covid 00:04:06.640 --> 00:04:11.439 law 00:04:08.159 --> 00:04:13.840 uh I would say you know because we had a 00:04:11.439 --> 00:04:16.079 uh the broader market had gone up in 00:04:13.840 --> 00:04:18.479 such a way in the after from the uh 00:04:16.079 --> 00:04:20.320 covid lows it went up by you know five 00:04:18.479 --> 00:04:22.320 times 10 times and lot of stocks went up 00:04:20.320 --> 00:04:24.639 by 50 and 100 times you know very small 00:04:22.320 --> 00:04:27.040 caps you know the way moved up lot of 00:04:24.639 --> 00:04:28.960 stock management stock manipulation 00:04:27.040 --> 00:04:32.639 that's a part of it but it's in a small 00:04:28.960 --> 00:04:35.040 way but so after that stocks have fallen 00:04:32.639 --> 00:04:39.120 very in a big way. Now I was listening 00:04:35.040 --> 00:04:41.120 to our Vigas Kamani talking to Naj he 00:04:39.120 --> 00:04:42.800 was telling just because the prices came 00:04:41.120 --> 00:04:44.479 down or the stock price came down you 00:04:42.800 --> 00:04:47.199 cannot buy the stock. We are not in that 00:04:44.479 --> 00:04:51.120 kind of a situation. Uh there are other 00:04:47.199 --> 00:04:53.040 factors uh you know in fact this uh this 00:04:51.120 --> 00:04:54.880 uh this bearish trend in the broader 00:04:53.040 --> 00:04:57.600 market started one and a half years ago 00:04:54.880 --> 00:05:01.199 at least six seven quarters ago. 00:04:57.600 --> 00:05:03.280 uh of course it got uh you know um into 00:05:01.199 --> 00:05:05.280 a much bigger market crash along with 00:05:03.280 --> 00:05:05.840 this geopolitical event. 00:05:05.280 --> 00:05:09.600 >> Yeah. 00:05:05.840 --> 00:05:12.160 >> So I I believe um uh this is a lesser 00:05:09.600 --> 00:05:15.039 kind of an opportunity but those who 00:05:12.160 --> 00:05:16.960 bargain do bargain hunting uh or 00:05:15.039 --> 00:05:19.520 cherrypicking of stocks this is an 00:05:16.960 --> 00:05:21.600 excellent opportunity. I'm not extremely 00:05:19.520 --> 00:05:24.639 bullish or I don't see extreme value in 00:05:21.600 --> 00:05:27.520 the market uh in total. 00:05:24.639 --> 00:05:29.840 >> Interesting. So Pinu 00:05:27.520 --> 00:05:32.160 is it because you believe that earnings 00:05:29.840 --> 00:05:34.479 growth for FI27 will also come off. Good 00:05:32.160 --> 00:05:37.280 morning of course Penju because I mean I 00:05:34.479 --> 00:05:40.720 I understand at 26,000 there wasn't 00:05:37.280 --> 00:05:43.840 great value but at 22 half and some uh 00:05:40.720 --> 00:05:45.600 the valuations have uh have become a bit 00:05:43.840 --> 00:05:47.680 more reasonable right 00:05:45.600 --> 00:05:49.759 >> yeah valuations you have to read with 00:05:47.680 --> 00:05:50.560 the future earning visibility uh good 00:05:49.759 --> 00:05:51.520 morning 00:05:50.560 --> 00:05:54.639 >> which is difficult huh 00:05:51.520 --> 00:05:56.479 >> so it's it's it's so there is gray areas 00:05:54.639 --> 00:05:59.440 uncertaintities 00:05:56.479 --> 00:06:01.440 uh the world is evolving you know uh in 00:05:59.440 --> 00:06:03.600 a much bigger way in the last few years 00:06:01.440 --> 00:06:05.199 And we expect it to continue for next 2 00:06:03.600 --> 00:06:06.960 3 years 00:06:05.199 --> 00:06:10.319 >> and it's impacted. Yes. 00:06:06.960 --> 00:06:12.800 >> But sorry did I did I I somebody told me 00:06:10.319 --> 00:06:15.280 and excuse me for not checking it myself 00:06:12.800 --> 00:06:17.520 but did you put out a post saying that 00:06:15.280 --> 00:06:18.800 this March 23rd 24th will be the last 00:06:17.520 --> 00:06:21.680 time that people will get a good 00:06:18.800 --> 00:06:25.120 opportunity to buy and if that is a yes 00:06:21.680 --> 00:06:26.960 what prompted that post? 00:06:25.120 --> 00:06:28.560 >> Oh not really. I didn't say it's the 00:06:26.960 --> 00:06:31.039 last opportunity. Opportunities will 00:06:28.560 --> 00:06:32.560 come again. That's now I am there 35 00:06:31.039 --> 00:06:34.240 years in the market. I have seen these 00:06:32.560 --> 00:06:34.880 kind of situations many times 00:06:34.240 --> 00:06:37.600 >> of course 00:06:34.880 --> 00:06:40.639 >> and uh so there will be more 00:06:37.600 --> 00:06:42.560 opportunities coming uh but you know now 00:06:40.639 --> 00:06:44.720 this is a particular event in which 00:06:42.560 --> 00:06:46.560 there is a special opportunity for the 00:06:44.720 --> 00:06:48.240 time being 00:06:46.560 --> 00:06:51.600 so that's what I'm trying to tell India 00:06:48.240 --> 00:06:53.840 is we the the regime is managing the 00:06:51.600 --> 00:06:56.400 country in in fantastically with a lot 00:06:53.840 --> 00:06:58.240 of responsibilities with the discipline 00:06:56.400 --> 00:07:00.160 this is something we can all take some 00:06:58.240 --> 00:07:02.319 kind of comfort in such a such a big 00:07:00.160 --> 00:07:05.759 event a geopolitical issue where India 00:07:02.319 --> 00:07:07.680 is very much directly is impacted 00:07:05.759 --> 00:07:10.479 especially with regard to the oil and 00:07:07.680 --> 00:07:13.199 gas import and the kind of NRS working 00:07:10.479 --> 00:07:15.440 in GCC countries and you know the 00:07:13.199 --> 00:07:18.000 remittance a lot of things which can 00:07:15.440 --> 00:07:22.240 have impact on the on the markets on the 00:07:18.000 --> 00:07:24.800 economy so we we are well placed or the 00:07:22.240 --> 00:07:27.199 best possible way we are placed to meet 00:07:24.800 --> 00:07:29.120 these kind of eventualities that is 00:07:27.199 --> 00:07:31.599 that's a very good thing we have been 00:07:29.120 --> 00:07:33.440 keeping that financial discipline 00:07:31.599 --> 00:07:35.759 in the last many years or almost a 00:07:33.440 --> 00:07:39.680 decade. So these things are going to 00:07:35.759 --> 00:07:41.919 help us uh you know um come out clean 00:07:39.680 --> 00:07:44.560 and better in this kind of an 00:07:41.919 --> 00:07:46.319 eventuality and the way uh you know many 00:07:44.560 --> 00:07:49.039 of those positives are not really 00:07:46.319 --> 00:07:52.240 getting the media attention. Uh you know 00:07:49.039 --> 00:07:54.800 a lot of lot of media they don't like 00:07:52.240 --> 00:07:57.440 you know uh you know the kind of India 00:07:54.800 --> 00:07:58.879 benefiting at the time of Modi ruling. 00:07:57.440 --> 00:08:01.360 So I don't know what kind of psychology 00:07:58.879 --> 00:08:03.280 it is. Many many good things are 00:08:01.360 --> 00:08:05.840 happening long-term vision with the 00:08:03.280 --> 00:08:08.240 long-term vision financial discipline 00:08:05.840 --> 00:08:10.080 and restraint. See we the way the 00:08:08.240 --> 00:08:13.120 diplomacy what India did in this kind of 00:08:10.080 --> 00:08:15.919 a geopolitical event we are not against 00:08:13.120 --> 00:08:18.319 anybody. We are not favoring anybody. We 00:08:15.919 --> 00:08:21.199 are taking a fantastic turn for 00:08:18.319 --> 00:08:25.360 especially keeping in mind India's 00:08:21.199 --> 00:08:26.800 energy uh you know security at of with 00:08:25.360 --> 00:08:29.759 most importance. You you make a fair 00:08:26.800 --> 00:08:31.759 point Puranju but let me ask you this at 00:08:29.759 --> 00:08:34.560 this point we don't know how long the 00:08:31.759 --> 00:08:36.880 conflict will go but based on the damage 00:08:34.560 --> 00:08:39.680 to uh oil infrastructure that has 00:08:36.880 --> 00:08:42.399 already taken place there are uh 00:08:39.680 --> 00:08:44.000 theories currently and the IEA has also 00:08:42.399 --> 00:08:48.560 come out with its theory on how much 00:08:44.000 --> 00:08:51.360 damage is taking place so $80 to $90 per 00:08:48.560 --> 00:08:53.600 barrel is now the base case scenario for 00:08:51.360 --> 00:08:57.600 a longer period of time we're not going 00:08:53.600 --> 00:09:01.040 back to 60 to 70 uh and we've not seen 00:08:57.600 --> 00:09:03.200 the impact on the pump level yet. Will 00:09:01.040 --> 00:09:05.680 you therefore from an earnings 00:09:03.200 --> 00:09:08.000 standpoint veer towards companies that 00:09:05.680 --> 00:09:12.320 are more likely to be able to control 00:09:08.000 --> 00:09:14.800 costs and pass it on have pricing power 00:09:12.320 --> 00:09:17.959 therefore so market leaders as opposed 00:09:14.800 --> 00:09:17.959 to others. 00:09:20.031 --> 00:09:24.240 [clears throat] 00:09:21.920 --> 00:09:27.600 >> Yeah, to be frank I didn't get the 00:09:24.240 --> 00:09:30.320 question. uh in fully uh anyway Alex the 00:09:27.600 --> 00:09:32.240 uncertaintities are there and you know 00:09:30.320 --> 00:09:35.519 every such events are different 00:09:32.240 --> 00:09:37.680 geopolitical or natural calamities or 00:09:35.519 --> 00:09:39.760 you know a covid kind of a pandemic 00:09:37.680 --> 00:09:42.640 every such events are different it has 00:09:39.760 --> 00:09:45.360 its own individuality and the impact see 00:09:42.640 --> 00:09:49.040 but but what I'm telling you India has 00:09:45.360 --> 00:09:51.279 its own advantages today most of India's 00:09:49.040 --> 00:09:53.600 macros are looking good looking 00:09:51.279 --> 00:09:56.800 fantastic some of them just because we 00:09:53.600 --> 00:09:59.519 are managing it well. So we have we have 00:09:56.800 --> 00:10:01.680 some kind of a you know comfort uh to 00:09:59.519 --> 00:10:03.360 meet this uh event. Now the 00:10:01.680 --> 00:10:05.600 uncertaintity is not only about the 00:10:03.360 --> 00:10:07.839 geopolitical thing. The biggest nation 00:10:05.600 --> 00:10:11.680 the the strongest nation of the world is 00:10:07.839 --> 00:10:14.959 now ruled by Mr. Trump. He take 00:10:11.680 --> 00:10:16.640 decisions. Uh so we have a big un 00:10:14.959 --> 00:10:19.200 uncertaintity in that regard. Not only 00:10:16.640 --> 00:10:20.560 we the whole world has uncertainty. You 00:10:19.200 --> 00:10:24.800 Alex, you might have heard about you 00:10:20.560 --> 00:10:27.760 know the taco Trump TSO many people have 00:10:24.800 --> 00:10:29.519 been discussing it on in Wall Street and 00:10:27.760 --> 00:10:32.240 on an economic fund you know 00:10:29.519 --> 00:10:32.720 >> so Trump always Trump always thickens 00:10:32.240 --> 00:10:34.399 out 00:10:32.720 --> 00:10:36.959 >> I know Trump always 00:10:34.399 --> 00:10:38.320 >> pur I'll interrupt here but you know I I 00:10:36.959 --> 00:10:40.560 understand what you're saying from what 00:10:38.320 --> 00:10:42.480 you know Trump says but you mentioned a 00:10:40.560 --> 00:10:44.959 point about the valuations are not cheap 00:10:42.480 --> 00:10:47.760 a quick 30 second at what levels will 00:10:44.959 --> 00:10:49.440 you find valuations of the small cap 00:10:47.760 --> 00:10:51.040 universe cheaper because the small cap 00:10:49.440 --> 00:10:54.160 index currently if you see the 12 month 00:10:51.040 --> 00:10:56.399 forward is at around 21 times versus a 00:10:54.160 --> 00:10:57.839 peak of 24.5 where are you seeing 00:10:56.399 --> 00:10:59.839 comfort? 00:10:57.839 --> 00:11:02.399 >> Uh I I see the biggest comfort and 00:10:59.839 --> 00:11:04.399 opportunity in select small and midcap 00:11:02.399 --> 00:11:06.640 stocks in this market. It's very 00:11:04.399 --> 00:11:08.800 difficult to predict that then sensex 00:11:06.640 --> 00:11:10.399 and nifty will not go down further. We 00:11:08.800 --> 00:11:12.640 all know the war will end but nobody 00:11:10.399 --> 00:11:14.160 knows when. So there is no much point in 00:11:12.640 --> 00:11:16.480 discussing and or watching these 00:11:14.160 --> 00:11:19.120 developments on an hourly basis and 00:11:16.480 --> 00:11:21.920 nobody knows that kind of uncertainty is 00:11:19.120 --> 00:11:23.760 there but it is less important if you 00:11:21.920 --> 00:11:25.360 are a value picker and I'm telling you 00:11:23.760 --> 00:11:29.120 value investors are already in the 00:11:25.360 --> 00:11:30.800 market doing the fishing so uh the 00:11:29.120 --> 00:11:32.160 cherry picking is already being 00:11:30.800 --> 00:11:33.839 happening and one more very important 00:11:32.160 --> 00:11:36.880 thing investors should understand this 00:11:33.839 --> 00:11:38.480 March everybody do tax planning lot of 00:11:36.880 --> 00:11:40.640 people made money in the initial part of 00:11:38.480 --> 00:11:42.320 the year they booked profit and now they 00:11:40.640 --> 00:11:44.480 are in Most of them are in loss. So they 00:11:42.320 --> 00:11:45.920 want to book loss where you can book 00:11:44.480 --> 00:11:48.320 loss where the stocks have gone down 00:11:45.920 --> 00:11:50.560 maximum. So the stocks are already very 00:11:48.320 --> 00:11:52.720 weak in the last one and a half years or 00:11:50.560 --> 00:11:55.040 six seven quarters. There is a more 00:11:52.720 --> 00:11:58.000 selling pressure in the coming few days 00:11:55.040 --> 00:11:59.680 because of taxation planning. So this is 00:11:58.000 --> 00:12:01.279 another opportunity if somebody want to 00:11:59.680 --> 00:12:05.519 look into. 00:12:01.279 --> 00:12:08.399 >> Okay. Penju may may this be one of the 00:12:05.519 --> 00:12:10.000 better opportunities to buy. Uh it be 00:12:08.399 --> 00:12:11.600 good for everybody. Thank you so much 00:12:10.000 --> 00:12:12.639 though for taking the time out and being 00:12:11.600 --> 00:12:14.720 with us today and giving us your 00:12:12.639 --> 00:12:19.720 thoughts. Really appreciate your time. 00:12:14.720 --> 00:12:19.720 >> Thank you Nage and the team. Wonderful.