GOOD TIME TO TAKE SOME MONEY OFF THE TABLE: NISCHAL MAHESHWARI

"This current quarter is showing some signs of improvement there. So, overall, good set of numbers. We have a buy on Reliance. We continue to maintain the buy," says Nischal Maheshwari, Centrum Broking.

What is your view on Reliance Industries, pretty much in line with what the Street was expecting? How have you read into the numbers? Was there an anticipation that there would be some further announcement?I agree with you. I think more or less in line with the results. What I am excited about between the three of the businesses, I think is retail. Retail has done very well and I think one of the interesting things which they have put out is now they have three in-house brands which have crossed Rs 2000 crores of revenue.

Retail is the highlight of this current quarter. Profitability-wise more or less in line. The second thing which was highlighted is that the capex seems to be now going on the downside.

So, their net debt has gone down, so they are spending less. So, these were two worries. This was one of the worries which people had about Reliance saying that capex is going to continue to go up.

This current quarter is showing some signs of improvement there. So, overall, good set of numbers. We have a buy on Reliance. We continue to maintain the buy.

What are you telling your clients at the current juncture -- take some chips off the table or ride at least till the election verdict?I totally agree with you. It is a good time actually to take away some money from the table. So, if you really look at what can go right for India then everything is right now there and it is sort of priced in, even for the election side market is discounting 375 to 400 number for NDA, so that is the best they will be able to achieve and if it happens also, I do not think the market is going to go up.

I am saying the problem at the moment what I see here is that there is no room for any mistakes. So, any results happening or today what we have seen happening in Mahindra & Mahindra and you will see market reacting very negatively.

You saw basically for IIFL also, any negative news market just dumps the stock. So, you are priced to perfection at the moment. So, any mistake anywhere is going to have a very-very strong reaction. I think this is a good time to take away some money off the table, maybe 5-10% of your portfolio and keep it in cash. Wait for things to maybe come off or some time off and then you can re-enter the market.

I used to think the same that, okay, this market is priced to perfection, so I was not surprised with the selloff what happened in the month of March. But what amazes me is that FIIs are selling and yet markets have recovered and the smallcap index is only 1% from its all-time high. So, while we may talk about valuations, the market is telling you a different picture.Flows are very important at the moment and we are seeing very strong flows as yet. But once for three-six month market just goes sideways and people do not see the same amount of returns what they got last year, then flows will slow down and if the FIIs selling continues, you will see some selloff in the market.

If you really look at it, there are two or three things which we have put out in our last strategy saying that what can go wrong in the market.

Already two have played out. One was we were very circumspect about the inflation in the US because everything in the core was still rising and that has continued to do so, so at the beginning of the year we were talking about six rate cuts, now we come down to one.

Nothing will happen in this current year. So, higher for longer. We have to see basically how it all pans out, whether the demand in the US itself is going to go down and if that happens, there will be impact across the world.

Our second view was that something in the Middle East is going to flare up. So, geopolitical situation, that has also happened. Market has discounted it at the moment but I think we are sitting on a keg of gunpowder in the Middle East.

Anything blows up, things can go really down. Everything what can go right for the world, for the market, for India is already there and it sort of seems to be priced in.

So, at this moment, yes, nothing will happen, I agree with you in the next six months, but market may not go anywhere from here also, so it is good. Take away some 10-15% because everybody has got a lot of profit on its book. So, take away some money, see if there is any correction, nothing happens, six months later come back into the market.

There have been quite a few IPOs that have been hitting the market. Has there been anything interesting by way of listings recently or anything that is upcoming that has caught your eye?Yesterday's closure of Voda was really a very good surprise actually. The institutional side got subscribed 20 times, that shows that a lot of confidence after what all we have gone through in the last five years for Voda.

So, this is one which was surprising and a good FPO. so that is the one which has really caught my eye, that really sets the ball rolling for Voda at least.

What will happen to your mind, let us assume that the cash comes into the balance sheet, logically how it works now?If positives are supposed to happen, let us look and try and see what is the blue sky scenario for Voda. There are two things. One is they stop losing subscribers, that should be the first aim of the management.

Every month, if I am right, they lose three to four million customers. If they can bring it down to zero or a million customers, that is one important thing.

Second thing, as they start investing into the network, people would upgrade basically from 2G to 4G and 5G. They have a good network of 4G at least in 17 circles.

Their 2G subscriber base is the highest, 50% of the subscribers are 2G, so that will improve their ARPUs.

There is one rate hike which the whole sector is expecting post the elections and I believe this subscriber losses going down and transition from 2G to 4G will increase their ARPUs.

Our estimates say that their ARPUs may see up to Rs 200 from 148 today into FY26, so that could be a big jump for this thing.

EBITDA levels, they do something like 20,000-21,000 kind of a number. We believe by 26, the EBITDA should be at least Rs 25,000 to Rs 26,000 crores.

If you really look at the debt side on the book, yes, it is Rs 2,31,000 crores. Except for the Rs 6,000 crores debt which they own to the banks, all remaining is to the government and government is the largest owner in the company.

So, that way, if government converts this into equity at some point of time, it will be a major winner for the government. This stock will get hugely re-rated and it is a win-win for everybody.

If government converts it at a price and then waits for a year or two, it will be a win-win for the government and the company. Government's long-term view is also that we should have three players in the market and good stock for the investors.

So, if that is true, then one should buy even today at Rs 13 because, okay, the issue must have come at 11, but if you think that the blue sky scenario will work out, then it could go to 20, 25, 30 also, then buy at Rs 13 also.Yes, but should one look at even 13? Yes, definitely. I do agree to you that a 13 going to a 20, 25 in the next two years, so I am saying it will double from here in the next two years. I do not think so that would be much of a very big ask if all things start happening as I have described it.

If we had to sort of nail it down to some top recommendations within the broader markets, which sectors or themes or stocks do you think would fit the bill?I think banking seems to be in a good space, especially the largecap banks. We look at HDFC Bank result, a good set of numbers. They are sticking to their core.

They are not compromising on the profitability. They are doing reasonably well as far as growth is concerned. So, within the largecap space an HDFC Bank. TCS results were good.

So, I am saying largecaps is what my preference is at the moment because you are comfortable as far as valuations are concerned and some of the stocks which have not done really well, those are the stocks to be looked at.