What are your views on metal packs? How do you see the sail numbers and the overall outlook for the metal counter? Please post the numbers. Even Tata Steel was shot between 6% and 7%. Please tell us your sense of how you view metal stocks.
Amnish Aggarwal: Metal inventory has already seen the gathering. Looking at the numbers, the volume of all metal stocks is not so encouraging for most companies. The margins were there, mainly because the raw materials were benign. So, it’s not the pricing of the products, but it’s the increase in raw materials that gave them a progressive profit, and it’s very well reflected in the stock price as the stock price has risen by 20% to 30% over the past two to three months.
Now, progressively, volume growth needs to be picked up. The obligation to protect is responsible for giving hope that prices are maintained and profitability is healthy. If profitability remains healthy, there will not be any significant cuts occurring at the stock prices of all metals companies. But from now on, the returns should be moderate than what we saw, especially in the last month or two.
After ITC, Bharti Airtel, Whirlpool and Hyundai there are many counters focused on the back. Even the MNC are looking for an outlet for Indian weapons. Some companies also give investors the confidence to grow from here. On this list, are there really strong stocks with growth prospects even after this sale has been absorbed in the market?
Amnish Aggarwal: Many of these companies and MNCs have to look at this between cases, not because they have come very willing, but because government regulations at that time allow them to hold them, but because they have stock. Today, many of these large MNCs look disproportionately high in terms of valuation, whether they see some of the durable companies like LG Electronics and Hindustan Unilever, whether they are in India or not. This encourages some of these MNC parents to dilute those who hold it, redistribute resources elsewhere, or buy back or do things like that, where they are seeing more growth.
Now, as far as growth goes, it depends on how much commitment you have. For example, if you have an MNC parent who reduces shares by 15%, 20%, they gradually lose interest in that particular company and will depend on the company’s business to see how much the business is technically or rely on the MNC’s parent. In many sectors where companies need to acquire a continuous stream of technology from their parents, I think the stock decline below is saying a 51% level in certain cases, but I think I think it’s negative.
Currently, some of these MNCs in the capital goods sector, such as your ABB, Siemens and many of these names, are between 51% and 75%, for example. But technically speaking, a company that reduces its shares to less than 51% is a bit difficult to read because you are not the majority owner of that company and the strategy is a bit harder to say, and it’s not a very welcome signal that relies on how I read it and how it is, what type of company happens, what type of technology transfer happens, and what type of operation in the country for parents can read it all and take a break.
