Investments That Will Light Up Your New Year


Sudip Bandyopadhyay: Absolutely. I think, that’s one of the reasons why I suggested this. I will lay out a couple of facts for all of us here. I think, the first thing as far as L&T is concerned is pretty much the same thing which I talked about UltraTech, there is a tailwind, and the tailwind comes from the construction boom, infrastructure boom, where we all know L&T is undisputed leader as far as Indian construction infrastructure space is concerned.

That’s the go to company for projects, big projects. The second thing is, we all know what is happening to oil prices, you know, we all have our views, but the fact is, oil is on a boil, and that kind of gives L&T a big opportunity in West Asia. They have been already in hydrocarbon sector in a big way but in between oil prices came down, so their hydrocarbon business suffered, and now they are gaining traction once again.

The third thing, which never happened in L&T before and that’s the reason for this, you know, subpar or sub-average return, was the asset monetisation, that was not happening, there was a conglomerate discount. But that has started happening and we know how things have been moving as far as the technology companies in the L&T fold are concerned. It has given fantastic results, though it has still not captured in L&T valuation fully, but more and more asset monetisation is happening and this is in a way an excellent step, because the company needs to focus on things which they do, rather than, you know, these businesses which have no direct linkages or bearing with the core business. So, asset monetisation is happening and that is resulting in improvement in working capital, liquidity and pretty much everything.

Last but not least, a massive amount of digitisation is happening as far as their core business, which is the construction, infrastructure, and that’s going to give multiplier returns as far as efficiency is concerned, which again, will translate into profitability and growth.

Overall, we believe the time for L&T is coming now. Whether it’s going to happen within a couple of months, six months, I am not sure, but definitely at current level when the market is a little bit of wobbly, corrections are being seen, it will be an interesting strategy to pick up L&T.

Again, I will repeat the fact that you know, the world is volatile, so, rather than moving to tier-II, tier-III stocks, which may promise interesting prospects, but the risk also becomes proportionately high, I would recommend investors to stick to large-cap, known names, solid management, established business. There is very little chance for you to go wrong when you pick up an UltraTech or L&T. 


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