 |
|
Neeraj Dewan, a market expert, offers a positive outlook on Zomato's long-term growth potential, despite acknowledging the intensifying competition in the quick commerce sector. He believes that while short-term stock consolidation might occur due to the entry of competitors like Swiggy, Amazon, and Flipkart, Zomato's established position and profitability make it a promising investment for long-term investors. The substantial size of the quick commerce market ensures sufficient business for multiple players, supporting Dewan's optimistic forecast for Zomato's continued growth. He emphasizes the importance of the current quarter's results in influencing market sentiment and suggests a wait-and-see approach before making definitive judgments on the company's performance. Dewan's analysis highlights the need for patience and a longer-term perspective when assessing Zomato's investment value, suggesting that the current period of consolidation presents an opportunity for strategic accumulation by long-term investors.
The expert also shared his views on other sectors and companies. He expressed greater confidence in United Spirits, citing its consistent improvement over recent quarters and the potential for increased alcohol consumption in India. He anticipates continued growth for the liquor sector, recommending it as a component of a long-term investment portfolio. Dewan's positive outlook for the sector is based on the belief that India's alcohol consumption is poised to rise, catching up with global trends. He emphasizes that investors with a long-term perspective should consider including liquor companies in their portfolios.
Concerning HDFC Bank, Dewan notes the recent disappointment among some investors following the bank's performance update, which fell short of expectations. He suggests this presents an opportunity, given that the stock is trading at a discount to its historical averages. He believes that factors such as increased credit demand and potential interest rate decreases could lead to future improvements in the bank's performance. He highlights the potential of private sector banks like HDFC Bank and Kotak Mahindra Bank, positioning them as valuable opportunities for investors during periods of correction, particularly if those corrections are attributed to temporary factors and not fundamental weaknesses.
The broader market correction, Dewan explains, began with last quarter's disappointing results, exacerbated by FII selling and shifts in global investment towards China. He notes the significant volatility in the market over the past three months, with attempts at recovery repeatedly countered by further corrections. He suggests that for Indian markets to recover sustainably, domestic factors need to improve, particularly positive results that exceed current expectations. A reduction in FII selling is also a crucial element for market recovery. He acknowledges the current relatively low expectations for the upcoming results season, highlighting that better-than-expected results could potentially trigger the next market upswing.
Dewan’s analysis also extends to the paint and cement sectors. He observes increased competition in the paint industry, with the entry of major new players, but emphasizes the opportunities presented by established companies such as Asian Paints, which have experienced significant corrections. He advises long-term investors to utilize these correction periods to acquire shares of strong, established companies. Similarly, he notes the increased capacity in the cement sector but points to the solid performance of companies like UltraTech Cement, highlighting its strategic acquisitions and expansion as factors contributing to its continued success. He again advises long-term investors to capitalize on correction opportunities to invest in these established, strong players, emphasizing the enduring appeal of UltraTech Cement and its robust price performance.
Source: Zomato's long-term growth remains promising despite competition: Neeraj Dewan