After the first quarter, Sandip Sabharwal of asksandipsabharwal.com predicts there may be no further earnings reductions. When you wish to purchase these stocks, it becomes crucial. Regardless of the news flow, if Infosys drops from its 1,400-odd level by 15-20%, you should purchase because the worst possible news is already built in. That is how we must approach these substantial IT stocks.

This is the first occasion that the management of IT corporations has publicly acknowledged a problem. We had a conversation with you about this a year ago. These equities had been penalized by the markets for the previous six to eight months. Are we approaching the point where you have to accept the management’s bad news or are we in for a lengthy winter?
The winter will not endure too long, but it will continue for a while. Because IT spending, especially the discretionary side, has a lot to do with sentiments, people need to understand that this phenomenon will last at least one or two quarters. We all assume that businesses and their management make logical judgments, but many of these choices are also influenced by how they see the future. This perception is now more unfavorable than what might actually occur. The management of these IT organizations are now aware of it to some level. I’ve been stating for a while that if people accept the truth, the stock price will rise to levels that could be considered buy levels. That’s where we are, in my opinion.

regardless of the news flow, you buy when the 1,400-odd level drops 15-20% since the worst bad news is built in. Because these companies have no debt, generate enormous amounts of cash, engage in regular buybacks, and distribute significant dividends, that is how we must trade these large IT stocks because we cannot be persistently bearish on these corporations.

However, the scenario is now unfavorable, and based on what these managements are saying, things could get a little worse.

Let’s think of it in terms of levels. Brokerages have taken to cutting the price objectives down with knives. When it comes to IT, everyone has experienced a downgrade since last year. Is it currently too late to sell?

You might decide not to invest since the stock might decline by 5% or 10%, but when the turn does happen, it will be equally sharp.

Yes, I will advise that long-term investors shouldn’t sell Infosys even if it opens 10% lower than what the ADR predicted. Perhaps another 10% could be lost from that, but I do not see it sliding any lower than that. Therefore, those looking to buy should wait. There are numerous other industries that currently provide better career chances. For those who held onto their investments and held off on selling from 1,800, 1,900, or whatever top it reached, until 1,200. They have no reason to sell at 1200.

DLF recently achieved record sales in the luxury sector. The growth coming from Kolte-Patil is unprecedented. In my conversations with Prestige, they also refer to record booking and record coaching. What is the source of the growth? Although there is talk of a slowdown, job losses, and the effects of increased interest rates, real estate companies are only doing things correctly.

The economy is shaped like a K, with luxury vehicles, four-wheelers, and consumer durables all experiencing declines, but sales of luxury brands are reaching all-time highs in India. This luxury sales craze is a world-wide phenomenon. That is a characteristic of the K-shaped economic model. Since many pre-sales need to be transformed into cash flows and actual deliveries, real estate is currently a challenging investment. We have frequently observed in the past that events frequently do not proceed exactly as they are supposed to.

Since you explicitly questioned about DLF, they are in a good position. That business has controlled its balance sheet, among other things, and has been quite cautious in recent years. Like you indicated and the corporate management mentioned, many of the new projects are selling out very quickly. Therefore, I believe that there is opportunity in a few stocks, and DLF may be added on top of it.

Given that the shares of HDFC Bank has already reached a 52-week high, what should you do at this time? It increased by roughly 7-9% in the past month alone. What happens next, given that the Street expectations were a touch too high and that HDFC Bank has successfully met the projections so far?

The outcomes didn’t have any drawbacks. People are searching for drawbacks. There weren’t any drawbacks. Data on credit growth has previously been released. All factors are favorable, and they could deliver significantly on the net interest. The major concern at the moment is what will happen after the merger with HDFC, when they would need to generate a sizable amount of CASA deposits. That is not how you can grow. Since they are a phenomenon with stable growth that results from long-term client acquisition, the majority of it will likely come from fixed deposits with higher interest rates, which will have an immediate negative impact on their net interest margins.

Furthermore, if they receive any leniency on specific points, the entire HDFC book will still need to adhere to the SLR, CRR, etc. criteria. Since there has been no word of any RBI easing, we must wait and watch.

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