“At these valuations, HDFC Bank is the next HDFC Bank,” he said in a conversation with CNBC-TV18, projecting an annual growth of 14-15% in the bank’s loan book and profits.
Ashika Institutional Equities has over $200 million in assets under management according to the company’s website.
HDFC Bank is not the only beaten down stock that Arora favours. “I’d still prefer midcap IT. Something like a Coforge still looks relatively interesting,” he said just as the market turned wary of the boardroom chaos at the software exporter.
He’s also bullish on Solar Industries, which has shed over ₹23,000 crore in market capitalisation in the first couple of hours of trading post the management revealed its new acquisition plan.
Arora remains bullish on the stock based on his estimate that revenue, earnings before interest, taxes, depreciation, and amortisation (EBITDA) and profit may grow 25-35% over the next two years.
His other bets in manufacturing include Triveni Turbine, TD Power Systems, Pondy Oxides, and Gravita, citing strong earnings growth supported by recent capacity expansion.
“I would use every decline to buy into something like a PVR right now,” he said, adding that it remains one of his preferred consumer discretionary stocks while sectors such as hotels and aviation appear fully valued.
What about the large caps?
Elevated crude oil prices, rising bond yields and a string of primary market fundraising have pushed the benchmark index down in recent weeks. Arora believes the index may remain rangebound for at least a couple of months.
What may turn the tide? The combination of second-quarter earnings and the outcome of the US midterm elections to become a turning point for Indian equities later this year, according to Arora. “Post-November, it could be a seminal turn for the Indian equity markets,” he said.
For the full interview, watch the accompanying video
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