Mount NIFTY 16k conquered!
Good Q1FY22 numbers, Indian Telecom sector at crossroads, BSE circular creates storm, Consumer inflation cools off and much more that shaped last fortnight
The sideways movement in Indian benchmark index - NIFTY which lasted for over 2 months finally gave way on to the upside - inline with our expectation of market being in a ‘consolidation’ rather than ‘distribution’ phase.
As Q1FY22 results kept pouring in, revival of Indian economy following the COVID 2nd wave damage was evident. This was not a big surprise for us as many companies in our investment advisory universe in their conference calls or updates left us with cues here and there. We continued to make them work them for the benefit of our members and closed out some open calls in the short term investment horizon. SUNPHARMA & TATA CHEMICAL were two such case in point.
India telecom industry is at a key juncture after KM Birla stepped down as VodaIdea (VI) chairman while also offering his stake in 3rd largest Telecom operator in India to government, public sector or any domestic financial entity. Vodafone Plc. also ruled out further capital infusion into the entity - no throwing good money behind the bad! A beneficiary of this situation was BHARTI AIRTEL which was well captured by Vantage members. We have also added the stock to Vantage Large Cap Model Portfolio as we believe that the profitability of the company has more tailwinds than ever with AIRTEL taking clear steps to boost it ARPU.
We had our share of stop-losses too, some of them caught in the sell-off storm in small & mid cap space due to a circular of BSE which it latter clarified (but the damage was done)! We have elaborated the BSE circular and its ramification in this tweet thread.
After FOMC last fortnight, RBI Monetary Policy Committee too maintained the status quo with repo rate kept unchanged at 4% and its stance accommodative. It believes the inflation is transitionary and rightly so as a week after MPC meet retail inflation hits 3-month low and is back in RBI’s targeted range of 4% [plus/minus 2%].
Real Estate a theme is something that we have been long on for a while and very recently closed a short term play on GODREJ PROPERTIES after the profit target was hit. We like to believe the sector has more momentum left in it as we scout for new opportunities.
Few other sectors we have our plays on are IT, CAPITAL GOODS & FINANCIALS both in short, medium & long term. And we feel large cap and index heavyweights will have field days for next few weeks while cousin small & mid caps can take a breather. We remain watchful of any global risk which could change our bullish stance on Indian equities market.