Basant Maheshwari - The man of all seasons in the stock market

Basant in Hindi means a 'season' and with Basant Maheshwari in the stock market means a seasoned investor with more than two   decades of experience in the market.

Basant Maheshwari is also the founder of the popular online investment portal www.theequitydesk.com. He has had a history of identifying several multibaggers over the past decade with prominent ones (beside Avenue Supermart which have given astronomical returns) are Pantaloon Retail, TV18, Trent, Page Industries, Titan industries, Hawkins Cooker, Gruh Finance and Repco Home Finance.

2021 was an exceptional and undoubtedly the best year for the bulls of Dalal Street since 2017. S&P BSE Sensex and Nifty50 rallied 22% and 25%, respectively. The Sensex logged an all-time high of 62245.43 on October 19 while 18604.45 for Nifty50. The bull rally did get a reality check in the later part with some corrections. The year in action 2022, in view of Maheshwari will see decent returns, though not astronomical returns.

Here are a few sectoral bets in 2022 based on Maheswari’s outlook.

Metal – One of his favourite picks for 2022, he finds a lot of conviction in metal stocks given their decent (low) P/E multiples, deleveraging and global performance in the metal space.

S&P BSE Metal has outperformed the benchmark Sensex in giving 66% returns but has been a laggard in the past few months, last 3 months returns of (4.64)%. But Maheshwari remains bullish on the sector and finds major stocks undervalued.

Information Technology – Maheshwari calls IT stocks as US Operation - Indian Companies. Emerging markets like India have witnessed the bull rally largely fueled by the US-led liquidity in the market. Betting on Indian IT is largely a US play that will reap high returns as the dollar strengthens.

S&P BSE Information Technology has outperformed the benchmark index Sensex in returning 48% in 2021 and are poised for continued outperformance in 2022.

Auto- With EV is fast becoming the new buzzword, global giants like Tata Motors which are market leaders in the EV space in India, with their aggressive capex and plans in the segment is Maheshwari’s pick in the auto sector. According to him, Maruti has been left behind in the EV race wherein the likes of Bajaj Auto face fierce competition from the likes of unlisted entities like OLA.

One of the underperformers of 2021, S&P BSE Auto gave 19.25% which is below the benchmark Sensex returns. Maheshwari is of the view that EV will be the game changer going ahead.

Banking and Financials – This sector does not entice Maheshwari who cautions to steer clear of them. According to him, the domestic economy has borne the brunt of the Pandemic induced lockdowns, the bull rally in the stock market was largely fed by the liquidity in the US.

Maheshwari feels that the sector will continue to be the cause of pain.

Food for thought...

As closing remarks, a recent tweet by the man himself

Growth is the anti-gravity to high P/E stocks but when the P/E is high and the growth <20% sooner or later you will fall at 9.8m/sec^2 before making a huge thud! Too many chemical and consumer names qualify for that category.