Should one buy dips in the realty stocks?
Absolutely. The way the market has moved and if you compare this with the rallies which were seen even 10-12 years back where there always used to be a bit of a correction after relentless rallies and that correction used to be a little deeper.
Right now, whatever correction we are seeing is on an overall basis not more than 1-15% and then immediately buying is coming. Look at the numbers coming from multiple data points, including retail inflows into the market. It is very encouraging. Also, the RBI governor’s statements today where they are maintaining the accommodative stance as far as the policy is concerned and has predicted inflation coming down. So there is probably no need for quickly looking at the interest rate moving up. That is very reassuring. Global liquidity supply is also continuing and if the US payroll data is on the expected lines, I think the liquidity flow into the global markets including Indian markets will remain unabated.
Under these circumstances, these dips will be opportunities for accumulating. But investors should be extremely careful about the stocks they are buying into.
What do you make of the SIP numbers, Rs 10,000 crore a month? Is it sustainable?
Retail inflow has been very strong and the way the markets have behaved, the way the new retail investors are getting added, this will stick. I remember 10 years ago, we used to lament that we do not have the kind of retail support in the market. The FII flows used to determine the course of Indian markets. Now, we have come to a stage where even if there is a moderate FII selling, the retail inflows are good enough to act as a buffer. So, there is no massive fall and we are seeing that getting played out again and again. Whenever there is a correction, whenever there is a bit of a selling by the FPIs, at lower levels retail buying is coming, either directly or through institutional funds.
How would you analyse the prospects of ?
If you are looking at a short-term investment, Reliance has moved up quite a bit. So there may not be major excitement in the short term unless there is some value unlocking step which Reliance suddenly announces.
But if you are a long-term investor and have a one-year plus time horizon, there is absolutely no problem. There are many things which are kind of brewing inside Reliance and one by one they are trying to unlock or unleash those on the market. 7-Eleven was expected — not exactly in collaboration with 7-Eleven but this kind of neighbourhood shops was expected and that has got done.
I believe they have a plan of massive rollout within a very quick time span. That is a big news but beyond that, the entire retail piece is probably reaching a stage where it is right for segregation, maybe listing, maybe even international listing or induction of international partners. Some of these things can do a value unlocking.
Also remember the O2C part of the business with Aramco coming in and investing has not happened yet but I think it will happen sometime. The telecom side I think everybody has talked about and there is significant potential. The question is when that Google phone gets launched and when Reliance starts seeing significant incremental numbers in terms of customer addition through that new launch. All these things are ripe and will happen at some time. If you are a patient investor, absolutely no problem in investing in Reliance even at current levels.