In the recent past you have seen aluminum and nickel prices heat up a little bit. How does one play this commodity theme? How do you play the metal pack as a whole?
You need to be cautious. You need to be really nimble when you are playing the metals now. Having said that, we continue to remain positive – especially on the ferrous side. The latest one is basically with China going out and increasing the allocation to the infrastructure side and easing interest rates. That has actually set the fire once again in the metals pack. Back home, I think this quarter is going to be a tough one for all of them because they will not be able to pass to on the costs – especially on the increase on the coal front. So you are going to see EBITDA per tonne for most of these ferrous bets basically coming lower than expected. I think the market is already expecting that. It is going to ease as far as the results are concerned. So you need to be cautious here. But a 10-15 per cent upside from here on the ferrous pack is seen. Our top pick out there remains to be JSPL and in that order. In the case of aluminum, it is a slightly different story. Fundamentally, there is very strong demand – especially coming from the CAN industry as well as from the automobile industry and there we are positive on Hindalco.
In the longer term, if you extrapolate copper, what is expected to happen on the renewable side? Is there a play to be made on the copper side as well and can Indian players really take advantage of that?
You have to understand that there is no copper ore in the country. What most of the guys do basically in case of Sterlite is that they are actually going and buying the commodity and then converting it. So we are basically a converter and we are deferred that way. We are basically price takers as far as copper is concerned in the country. Mostly it is imported. Whereas in case of iron ore and aluminum we have the ground and that is where we are able to manufacture quite a lot. So copper, yes, I think it may be a long term play out there but not much play as far as India is concerned.
What is your take on big IT numbers this week?
One outshining result among the three companies is Infosys. A good set of numbers. For several years, I do not remember Infosys delivering this kind or any of the large cap IT companies delivering this kind of numbers. TCS, yes I think a bit of a disappointment so I think the buyback is doing the trick there.
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