IRCTC, Avenue Supermarts, Mindtree, Asian Paints, Bitcoin: the discussion topics of the week: Mauka, Mauka!

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In ‘The Week’s Talking Points’, Niraj Shah examines how top business leaders and market makers navigate the financial landscape changed by the pandemic.

As you read this, the Indian team will be preparing to take on the Pakistan team in the T20 World Cup cricket fixture on October 24th.

Original Mauka, Mauka in action this weekend

Even in the days of Covid, from housing companies to bars, seats for giant screens are reserved. At the right time, the government of Maharashtra extended the closing time for restaurants in Mumbai until midnight. Mauke pe chauka? Oh yes, this weekend you will be inundated by clips ‘Mauka Mauka’ advertisements. If you haven’t seen any, you should … they are eternal and spiritual. Chances are, you want to move away from professional content and switch to cricket, but wait … I’m using my mauka to keep you here so you do the best with yours.

Take the risk or seize the Mauka?

A million dollar question, isn’t it? So far in the recent past all drops have been bought. Will this period of heightened volatility and sudden moves also be incorporated, or is this decline different? The arguments are strong on both sides. It seems pretty obvious from the reactions to stock prices where there has been even a slight lack of gains, the market is not in the mood to tolerate shortages. Note that when growth stocks are priced at such extreme perfection and beyond, the reactions are strained and swift, as was evident in the two-day stock price rout of Indian Railway Catering & Tourism Corp. It is at times like this that we also see analysts valuing companies on the basis of five-year earnings. In the case of Avenue Supermarts Ltd., some business cycle expectations go to FY29, FY31, and in one case even FY51!

Arguably the classic markers of increased retail participation, perfectly priced growth stocks, and absurd arguments justifying stock prices are all there. But it can also be said that this argument has been around since the Nifty 50 hit 16,000 levels in early August. Since then, there have been many arguments for a fall, all of which were dismissed by Mr Market. Will this time be the same? Or will it be different? If you can answer, my friend, you are a rare breed. Go take advantage of the market scares.

As a sidebar, speaking of fears and risks, if you are on a plane, we hope that what has been told in this story does not happen to you:

“Back in the cockpit after a recovery period from Covid-19, an airline pilot forgot to start the second engine of his plane for take-off, a mistake that could have ended in disaster if he hadn’t not interrupt the flight. Another pilot, fresh off a seven-month layoff due to the pandemic and descending to land early in the morning, realized almost too late that he hadn’t lowered the wheels and got off. removed from approach just 800 feet (240 meters) from the tarmac. “

Are you flying soon?

Mauka for non-shrewd computing to eclipse the big boys?

Mid-cap IT companies outperform large caps. Let’s take stock of the numbers so far:

In an interaction with BloombergQuint, Mindtree Ltd. as well as L&T Infotech Ltd. suggested that growth rates will continue to be strong and that there was no reason to believe that S2FY22 would be significantly different. Compare that with the low projections from Tata Consultancy Services Ltd., or HCL Technologies Ltd. sticking to double-digit revenue growth estimates, but not giving a specific number. A few months ago, White Oak analysts told us during a BQ Edge webinar that midsize IT companies now have a place at the table with large-scale offerings. Well, they’ve certainly claimed a seat at the investor table claiming computer stocks as well. They seized the opportunity with both hands, with a mauke pe chauka.

No Mauka to mitigate rising input prices

The only notable point of discussion this week was the impact of input cost pressures. India’s largest paint company said inflation was at its highest for at least 40 years. Leading grocery multinational says price outlook for key categories remains firm as costs for packaging materials continue to rise due to supply constraints, rising fuel costs and transport. The leader in electrical products alludes to the cost pressure in the field of cables. The fact that its air conditioners division recorded the appalling margins it made shows that inventory sell-off hasn’t quite happened at prices that help them recoup some of the input costs. While input cost pressures are not new, Asian Paints Ltd. Managing Director Amit Syngle points to the pace which has been rapid, continuous and accompanied by raw material availability issues that can hurt businesses. from all sectors.

It’s not much different for IT companies. Imagine the CEO of a company with a market capitalization of nearly $ 15 billion talking about how they are trying to deal with workforce availability issues.

“We are recruiting non-tech talent, people who haven’t gone to engineering schools but are interested in IT and put them through our training program.”

Someone had tweeted, half-joking I think, that an IT company’s sign would now say “Intruders will be recruited.” Maybe it wasn’t that far from the truth after all.

Crypto Bulls happy to hang on to Mauka

Crypto advocates have been pushing for years for regulators to approve a Bitcoin-linked exchange-traded fund, and now that it’s finally here, many expect the ETF to attract a new class of investors. in digital currencies. Anticipation of the ETF listing appeared to increase the price of Bitcoin over the past week. And after the ETF, pricing hasn’t been bad either. While many theories are circulating, the only argument that seems to have any basis is that reflation trading is fueling bitcoin prices. Take a look at this table:

Sandeep Tandon of Quant MF is an Indian stock market expert with a firm opinion on the current state of the cryptocurrency market. He believes there could be a corrective move over the next 7-10 sessions, but adds that in the long term, Bitcoin prices are expected to at least triple from current levels.

On a final note, a separate data point is worth noting: since 2015, active non-ESG stocks have recorded outflows of $ 2.6 trillion, while ESG stocks have recorded inflows of around $ 456 billion. dollars, according to Saurabh Singh of Bernstein Research.

If there had ever been a mauke pe chauka, That was it. Design an ESG fund if you could, and put your time machine back in 2015.

Niraj Shah is Senior Markets Editor at BloombergQuint.


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