Absolutely no doubt. With the super quality and consistency shown many instuitions are waiting to add Gruh and any corrections in the market will be met with buy. It will correct for sure but not by as much and this is why it will help retain gains made.
Are we immune from… what the report is talking about NBFCs & HFCs
While Gruh is not immune to the overall negative sentiment in the NBFC sector and therefore to its valuation, business wise, I feel it will fare much better than other HFC’s. When the dust settles (which hopefully will happen soon), strong players like Gruh (with the backing of a giant group like HDFC) may actually benefit.
As also mentioned by Ajay Piramal in one of his recent interviews, the liquidity stressed HFC’s will slow their lending activity. Also, the practice of snatching of customers of say a Gruh by aggressive HFC lenders by offering a marginal reduction in interest rate will reduce (Gruh may have done the hard work of credit assessment of the customer and the customer is soon snatched away).
As mentioned elsewhere, this period is probably to learn the lessons of investing and rejig your portfolio to high quality companies. Such a period may not last for too long and before you decide to finally buy, the valuations may have already moved up.
I continue to back my favorite4 stocks (Gruh, Page, HDFC Bank and Asian Paints). The assumption is that you are willing to hold for a 5+ year period or better still, forever.
Efforts are ON to stop the carnage
I have a lot of respect for Bharat Shah, ASK Investment Managers. He rode the Infosys growth in the 90’s when he was with Aditya Birla Mutual Fund (left in 2002 to join ASK).
He has a very interesting take on how to value lenders and has a special mention for Gruh and that such stocks should be valued as FMCG stocks since they have not diluted equity for decades, have a high dividend payout ratio, high growth and the large size of the opportunity.
Worth listening from 19 minutes onwards.
As per him: ‘Gruh Finance…always looks high priced…but if you look at all the parameters…is actually reasonably priced…’