Valuation of PSU stocks has become less attractive, says Akhil Kalluri of Franklin Templeton. The rally in small caps can be attributed to retail liquidity and the deployment of excess cash. Kalluri discusses the valuation risk in the broader market and the March quarter earnings. He also comments on the possibility of a re-rating if BJP comes back to power. Kalluri highlights power, defence, and capex as hot investment themes. He further mentions the future prospects of financial giants and suggests an ideal asset allocation strategy with a long holding period.
Leading private equity firm Carlyle has selected JPMorgan and Kotak Mahindra Bank to assist in arranging the upcoming IPO of Hexaware Technologies, a prominent IT services and consulting company. The IPO is expected to attract considerable attention from investors.
Kotak Institutional Equities has increased the per-share fair value of Zomato to Rs 125 from Rs 100, attributing the increase to the contribution margin for food delivery. The margin rose significantly to Rs 18.5 per order in FY23 from Rs 6.6 in FY22, driven by higher revenues and cost optimization, as per Kotak’s analysis of Zomato’s FY23 annual report.
Kotak Institutional Equities has ceased to recommend Indian mid-cap companies as it finds limited upside potential following the significant surge in the mid-cap index this year. The rally, driven by irrational exuberance among investors, has raised concerns about a potential market correction. Most of the stocks in Kotak’s model mid-cap portfolio are currently trading near their fair values. The brokerage has found limited opportunities for significant upside potential outside of the banking, financial services, and insurance sector. Kotak has also raised concerns about the quality of certain stocks due to weak execution and governance in the investment sector.
