Investment Faqs with Parimal Ade (Investment Satsang- 18)

4 min read

Here are some questions asked by the viewers in the Investment Satsang dated 27th 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 Planning to start SIP in Motilal Oswal Nasdaq 100 ETF. What happens if the fund house shuts down? Since the US market is overpriced, what would be the right time to start the SIP?
Parimal Ade:

• It is always recommended to start the SIP now.
• If the fund house is shut down, it is trust-based with a mutual fund house. The money invested will not be affected. It’s not like a bank. So there is no need to worry. The money will be in safe hands.
• Possibly If the AMC is shut down then other AMC will acquire and will continue.

Q Is it a good time to invest in Bandhan Bank?
Parimal Ade:

• Microfinance allocation is more than 60% and that’s the trouble.
• In a recent time when the 2nd covid wave was there. At that time collection efficiency was decreased and the impact is seen in this bank as well.
• So the actual picture of the NPA will come to know in the 2nd Quarter results. Till that time it will be a risky thought process.
• It is better to stick to those banks which have NPAs in control and with good capital adequacy ratios and retail liabilities franchise.
• It is always better to avoid uncertainty allocations.

Q What is your perspective on NMDC share?
Parimal Ade:

• Not very positive on PSUs.
• A lot of dependencies are there on the news flow rather than business performance.
• The institutional parameter is cautious on the ESG parameter.
• If there is no support of the institutional investor then the laggardness will be on the higher side.

Q For achieving goals whether we can plan through MF SIP or Equity SIP?
Parimal Ade:

• It can be done using both the SIPs depends on the person.
• If the person has time to analyze and can follow the quarterly results. Then going for equity SIPs should not be a problem.
• If it is felt that there is a lack of time and have plans to hire the fund manager on his/her behalf. Then Mutual Fund SIP should be good.
• It is always recommended to the retail investor to start the investment in Mutual Fund SIPs. Slowly the person would be informed investor.
• Need to start reading news about the market also need to understand about the businesses. From there you can make initial portfolios.

Q On the EV segment which one has a slightly higher edge for long-term Tata Motors or Tata Power?
Parimal Ade:

• Both are part of the same ecosystem.
• For the Pure electric vehicle thought process, Tata Motors has an edge over Tata Power.
• Tata power is not alone with electric vehicles. It is all about other ecosystems. Tata Power is into distribution, power production, and renewable energy.
• Tata Motors is keeping the focus on EVs and by 2025-2030 the company is planning to have a complete EV portfolio.

Q SIP mode of 40% in Mutual Fund and 60% Large-Cap stocks. View on Eicher Motor and the recent Fiasco in their meeting?
Parimal Ade:

• This has created a bad example.
• When the profits are not growing and stocks price is not growing but still the salary growth of MD is more than the profit growth. That is not a good thing.
• Institutional investors have been shown that despite being a group of minority investors, but they have control over the thing that they have turned around which has created good precedence to be set.
• There are challenges but compared to Hero Moto Corp, Bajaj Auto they are still in a better position because Royal Enfield is still an aspirational brand so there will be always a demand.
• Due to upcoming EVs, there is no threat to Royal Enfield.
• If they get any breakthrough in the market that is going to be positive.

Q Holding KPIT and expecting a volatile ride. After your analysis, I have been emboldened. What is your view on it for the long term?
Parimal Ade:

• Long term it is still positive the kind of focus they have shown on the auto sector is good.
• The hydrogen production that has been done from the renewable source using farming material, If that technology becomes successful then the future is going to be good, this will be an extra advantage

Q View on Berger Paint?
Parimal Ade:

• The Paint industry always trades at premium valuations.
• It is always suggested to the people if the allocation is on the paint industry then the best way is to do the quantitative analysis.
• As the sector is small. There are only 5 stocks.

Q Can We expect a 15-20% Nifty correction soon due to Covid 3rd wave?
Parimal Ade:

• It is always told that the market won’t correct for the same reason twice.
• So there is less chance of the market getting corrected for 15% to 20%.
• The market is already thinking about the third wave.
• The 3rd wave that has come in the US and UK needs to see that how much is the casualty, hospitalization. If there is any wrong thing happens then there is a problem.
• But if it doesn’t happen there is a chance of good immunity of the 3rd wave and the market might not correct very much.

Q View on Balakrishna industries for the long term. Can I take it on SIP mode?
Parimal Ade:

• Very positive on their growth prospects. The niche that has been created by the company.
• It has become a global player.
• Long-term earning visibility is looking good the best way is to take the SIP mode.
• Currently, the company is also trading at premium valuations.

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