We saw good underperformance in . During the recent cooling, we fell to around Rs 2,300 in ? What’s the next big trigger that will bring the stock back to those golden days of 2020?
Much of the negative noise around this exceptional tax and the fact that there is a kind of volatility in gross refining margins is behind us. After experiencing a major correction and underperformance relative to the market, the risk reward has turned favorable and the gas price revisions we saw yesterday are definitely a slight positive for them.
If we look at the telecom part, we are seeing a rollout of 5G and we expect good traction in terms of ARPU over the next three to four quarters. Retail is showing reasonably good pulls and we will have a bit of a problem with the oil and gas sector and windfall tax issues, but the rest of the verticals are doing well. Additionally, the stock has corrected quite sharply. We like that name at the current price.
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What is your assessment of the Q2 updates we are getting from some FMCG players? So far that’s fair and , but given the trajectory we’ve seen Avenue develop, the kind of pace they’ve managed to maintain, where is your preference?
Of the consumer names we would definitely go with HUL, Dabur and Britannia and even Godrej Consumer because apart from volume growth we have to count which are the companies where you see the benefits of the oil price correction palm oil and soft commodity prices. .
“ Back to recommendation stories
What kind of urban-rural mix do these companies command? We think these companies are relatively better positioned and even Q2 would be a reasonably good quarter in terms of volume and margin growth. At the same time, if you look at their SSG for D-Mart, that number hasn’t really increased over the last three to four quarters. It’s a big name and a big brand. We have to take into account that to justify the type of multiple PEs, the company does not exhibit a similar type of comparable store sales growth.