Do you think the leadership will change or do you continue to see Reliance pulling the markets higher from here?
It is an interesting question that you have asked. We will see the leadership change. Reliance has indeed pulled up the markets so far and that was not surprising because the fundamentals of Reliance have been transformed ever since they have been managing to strike those multiple deals for Jio platforms.
So the leadership will now change. We have already seen pharma companies take leadership overall. We are seeing auto companies also recovering gradually from their lows. In fact virtually the entire universe is recovering from the lows. But the leadership has conclusively come from Reliance and we will see that leadership soon move to the likes of the BFSI sector, automobile sector and to some extent pharma sector as well. So leadership will change in the rally ahead.
What is your take on LIC Housing Finance?
One thing that is very clear from the results of various financial companies like SBI or LIC Housing finance. What we have been able to see is that roughly about 20-25% customers have opted for moratorium and that is a very healthy number because the market expectation was that we will see the moratorium being lapped up by a larger number of customer bases; probably 40% or nearly 50% but that has not happened. This tells you that despite the lockdown situation, people have not really-really gotten worried about the cash situation. They are not really out of cash and therefore this is a degree of confidence that one can have in the financial sector.
Having said that, collection is what is going to determine things as we go forward. Collections is what is going to determine the success of these financial companies and banks because once the lockdown is lifted, the company that is able to collect their money faster will be the ones who will be able to deliver better in terms of their overall balance sheet health. Therefore, we will look at the collection efficiency among various companies. Even collection efficiencies of microfinance companies will be keenly watched. So my take is that this degree of confidence that we are seeing in terms of the financial space tells us that probably we will have a very quick recovery as the lockdown gets lifted.
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