Rakesh Jhunjhunwala iffy on internet companies; bets on TaMo, PSBs, small private lenders

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Rakesh Jhunjhunwala iffy on internet companies; bets on TaMo, PSBs, small private lenders


NEW DELHI: Ace investor Rakesh Jhunjhunwala calls Elon Musk of Tesla a true entrepreneur, but believes the high market value of Tesla may not sustain. The Big Bull calls Prime Minister Narendra Modi a “distilled socialist,” one who has batted for reforms aggressively. The Big Bull suggested high-teens returns from domestic equities over the next decade.

In an exclusive interview with ET NOW, Jhunjhunwala said history will remember Elon Musk of Tesla as true entrepreneur. “But it is the shareholders who would decide Telsa’s market capitalisation, and not Elon Musk,” he said.

“That m-cap may not last, that I can tell you. But that does not take away the entrepreneurial capabilities and performance of Mr Musk,” he said.

On the Internet companies, Jhunjhunwala said he is not a fan of them, as he does not like to pay much money for companies that have perceived large markets and a good positioning in those markets, but little or no cash flows.

“You are discounting a large part of the future into the present. Uber, after its public issue, never went off. Internet companies are not my favourites. But people have made money, good luck to them,” he said.

Jhunjhunwala said PE expansion has happened in Indian largecaps, and a large part of the market has scope for both PE and earnings expansion. He said Nifty can give double-digit returns over the next 8-10 years.

“I would be disappointed if Indian equities do not give high teens returns over the next decade,” he said.

Jhunjhunwala said he does not have any major investment in PSUs, except SBI and Canara Bank. He said the improvement in profitability of PSU banks will be much higher.

He said as an investor, he would choose PSBs and small private banks, as the delta is higher there.

“Any bank that can garner deposits will become powerful and will have ability to lend,” Jhunjhunwala said.

Jhunjhunwala said investors still underappreciated the ability of Tata Group. He said he has been extremely bullish on the group since N Chandra took over. “The emphasis on consumer focus and cash flows will last forever. In my opinion, the biggest growth will come in Tata Motors,” he said.

Batting for reforms, the Big Bull said he has solid faith in the government’s reform drive. India is tackling Covid impressively, he said.

“PM Modi realises the importance of economic reforms, understands that without them you cannot increase the pie size to distribute. He is a distilled socialist,” Jhunjhunwala said.

Jhunjhunwala said early indicators of economic uptick are very positive. Skills and democracy make societies, he said.

“Indians are more skilled people in the world. Further promise of reforms & firmness of the government will lead to this decade belonging to India,” he said.

The Big Bull said the more India opens up the economy, the more prosperous it would get. “India will overtake China in the next 25 years,” he said.

Jhunjhunwala said crude prices will stay at $60-70 a barrel level and that the recent surge in oil prices is a temporary phenomena because of the deep freeze in the US.





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