I appreciate your views on both ITC & NHPC and still i think pvt. bank can provide better opp. here are my reasons
1) ITC's val. are already factoring that kind of growth .
2) tobacco business which is cash cow can be hurt badly (till now they are having pricing power but small unorganized players will eat their market share . if tax keep going like this)
3) ITC if you are looking as FMCG play there are better bets (its FMCg is not making any money )
4) if we are looking at bull market that will be there for next 2-3 years (due growth coming back, & int. rate going down by next year) FMCG kind of stock will not outperform market in that scenario.)
now abut NHPC
1) govt. sector company that has to deal with state govt., center gov. and people & environment ministry. very less chance of re rating
2) what about business growth can they grow at 15% sales at CAGR.
3) as it has happened with coal india , minister & employees will have the fruits and we will be holding lemon.
according to me itc is 50-50 case but NHPC is clear no-no.
Now coming to Banks they are also paying div. and div. is growing yoy.
i think HDFC , AXIS & YES have good retail business that will be able to garner good business as young indians will be looking for home & auto loans.
and there NPAs are very low and they have shown good growth since last how many quarters and int. rate decline & economy pick will benefit them more.
But last word,we both have very rational arguments and have right to be wrong. anything can happen lets see what happens.
By Kunal Shah