Investment Faqs With Parimal Ade (Investment Satsang- 17)

4 min read

Here are some questions asked by the viewers in the Investment Satsang dated 13th August 2021. These questions can provide you insights on some grounds. Please read these questions for knowledge purposes only and make any investment decisions only based on your research or the advice of your financial advisor.

Q Where to reinvest Dividends whether in Stock or Mutual Funds?
Parimal Ade:

• The strong suggestion if the investment is in Mutual Funds then investing in dividend-based MF should not be done. It is better to invest in growth options.
• Whenever you need the money you can withdraw the money.
• There is no option like Mutual Fund in the stock when the dividend is declared.
• But if you believe in the company’s earning potential, growth then it is a good option to reinvest the same money into that company this will help in dividend reinvestment, and in long term, the growth will be also good.

Q Do traders take advantage of long positions of investors and do investors take advantage of volatility caused by traders to accumulate?
Parimal Ade:

• If you believe in the company, in their business, longevity in their earnings. If you want to invest and if there is any correction then there is an advantage because of the short-term demand-supply equation in the market
• The long-term investor should avoid trade-related news. If there is any change in business dynamics then only there is a need to worry.

Q Where to invest in the Foreign Markets?
Parimal Ade:

• It is always better to take allocation in the NASDAQ or S&P 500
• In Nasdaq, technology plays a very important role not only in the US but they are doing business all over the world. That is why these funds will be good.
• Chinese markets should be avoided in a completely different country. There is no idea about their new regulations.
• It is better to invest in a capitalist kind of country where everything is open and information access is also good.

Q Why are some shares of the Pharma Sector too much corrected?
Parimal Ade:

• In the Pharma sector, too much discounting has already happened.
• After covid, it was felt that there will be too much boom in the pharma sector.
• The Pharma sector is having seasonal cycles where there was a pandemic-like factor.
• Due to covid, the dynamics were very bad. But the impact is, people have become more conscious.
• The expectation build by the market for the pharma sector has not been fulfilled that much. That is the reason there could be rerating.
• It is better to take allocation in diagnostic rather than pharmaceuticals.

Q View on LIC housing finance?
Parimal Ade:

• It’s good company. Very strong parentage of LIC.
• This sector is a growing sector. Organic growth is also more.
• The government initiative “Housing for all “ is having the target of 43,000 houses per day target need to be achieved.
• This shows that the real estate business is going to have a good time. Hence This is the company one should look at for a longer horizon.

Q Vodafone’s situation impact on IDFC First Bank do we wait more quarters to see how the NPA turns out?
Parimal Ade:

• The bank will manage NPAs.
• The overhang of this news will be there for 2-3 quarters. It has already made 15% provisions of that particular loan.
• The remaining 85% loan is close to Rs 2,800 Cr. If the bank records more NPA then there will be a need for more provisioning.

Q View on Motherson Sumi for a medium and long-term view?
Parimal Ade:

• The business structure is very complex.
• While investing the structure should be simple so that the shareholder should be able to understand.
• When things are not understood then it is better to leave that particular company.
• There are too many subsidies and too many restructuring.

Q View on Bajaj Consumer and whirlpool?
Parimal Ade:

• From a consumer point of view, it is always better to stick to the large-cap-oriented type of funds.
• The product range is not diverse. For FMCG the product should be on the higher side.
• Whirlpool is a good company.
• There are challenges in every quarter.
• It has a very good future. Consumption is going to increase in India.

Q View on CAMS and CDSL?
Parimal Ade:

CAMS is having good earning visibility.
• Penetration is so low in asset management companies which are going to increase in the coming time.
• The increase in penetration will decrease the expense ratio. Even though the AUM is going to increase but the earing will be stagnant.
• In CDSL the growth potential is very high.
• As it was seen the surge in last 1 year, In the last IPOs 30 lakh retail investors had invested.
• This number which was there in the last 2 years was around 3 lakh per IPO. Which means it has grown 10 times.

Q Views on PVR and Inox for the long term??
Parimal Ade:

• This sector looks positive. This industry will be there for the long term.
• Only the current problem is debt on the company in the current balance sheet.
• If this debt trend continues then there could be an impact. If they survive then that would be the best thing.
• If the debt portion keeps on increasing then there could be a restructuring or there could be a new player into it. This could be a contra kind of call as uncertainty is still high about when things will be normalized.

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