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+ {"source_url": "https://economictimes.indiatimes.com", "url": "https://economictimes.indiatimes.com/markets/expert-view/market-trend-moving-from-small-is-beautiful-to-big-is-great-basant-maheshwari/articleshow/73056229.cms", "title": "Market trend moving from small is beautiful to big is great: Basant Maheshwari", "top_image": "https://img.etimg.com/thumb/msid-73056469,width-1070,height-580,imgsize-146609,overlay-etmarkets/photo.jpg", "meta_img": "https://img.etimg.com/thumb/msid-73056469,width-1070,height-580,imgsize-146609,overlay-etmarkets/photo.jpg", "images": ["https://img.etimg.com/photo/77847333.cms", "https://img.etimg.com/photo/78368631.cms", "https://img.etimg.com/photo/msid-76920540,quality-100/et-markets-logo.jpg", "https://img.etimg.com/photo/msid-76920425,quality-100/et-logo.jpg", "https://img.etimg.com/photo/msid-42031747,quality-100/et-logo.jpg", "https://img.etimg.com/photo/78487146.cms", "https://img.etimg.com/photo/msid-71736973,quality-100/logo-stock-screener.jpg", "https://img.etimg.com/photo/79132681.cms", "https://img.etimg.com/thumb/msid-73056469,width-210,imgsize-146609,,resizemode-4,quality-100/basant-maheshwari-1200.jpg", "https://img.etimg.com/photo/47865640.cms", "https://img.etimg.com/thumb/msid-73056469,width-1070,height-580,imgsize-146609,overlay-etmarkets/photo.jpg", "https://img.etimg.com/photo/77237981.cms", "https://img.etimg.com/photo/17981456.cms", "https://img.etimg.com/photo/79132683.cms", "https://img.etimg.com/photo/64781824.cms", "https://img.etimg.com/photo/msid-74462387,quality-100/et-logo.jpg", "https://img.etimg.com/photo/42031747.cms"], "movies": [], "text": "Basant Maheshwari, PMS manager and Founder, Basant Maheshwari Wealth Advisors, says only big boys will get the pizza from here on while the small ones will only get toppings. In an interview with ETNOW, he said larger players will continue to dominate the stock market going forward. Edited excerpts:You are an expert in identifying mega trends and where the money is going to be made in this decade. Financials account for nearly 40 per cent of the weightage in benchmarks. Last time when one sector had this kind of representation on the Nifty, bad news followed us. The fear is that financials today are looking good. They are like this grand mega trend for the next 10 years but pricing and weightage and over ownership are something which makes me wonder -- will the party continue?Your analysis has already played out. Financials have a 40 per cent weightage in Nifty and there has to be breakage in the sector. So, from the IL&FS days most of the financials are around 40-50-60 per cent down. The analysis has played out. What has not played out the way people would have liked it was -- the leaders taking away all the market share and they are still growing. If all financials collapse, the economy is going to collapse.This is not a recommendation, but if I tell someone that in case you have some extra money, go and buy HDFC Bank or Kotak Bank. But he insists on putting all my money. What would happen if there is a problem in HDFC Bank tomorrow? I would say if there is a problem tomorrow, then on your way to HDFC Bank from your house, look left, look right and see which bank is open because they are the last ones to come in a problem.So, this is what happened. What you are saying is perfectly right and this theory was going around that financials are 40 per cent of the index and there has been a breakage in the system. YES Bank has lost one digit in its price. It has sort of moved from Rs 400 to Rs 40. Look at Indiabulls, it has also lost one digit. From Rs 1,300, the digit one has gone away. The destruction in the market normally happens through digits. It does not happen in percentages.My immediate follow-up question is that let us look at a classic case like Reliance. Between 2005 and 2008, Reliance was a multibagger. Between 2009 and 2014, Reliance did not give great returns. Growth was there; they created new verticals; they added Reliance retail but yet for shareholders it went into time-wise correction. Disruption has happened and market leaders will survive -- that is the theory. But for shareholders, do you think good quality financials now run the risk of getting into time-wise correction?Let me address the Reliance thing first. Between 2003 to 2008, there was a commodity bull run and Reliance was doing well. The investing public has not quite understood the way Reliance Industries would deal with retail consumers. All this time they were doing gross dealing with the government and dealing with bulk production of commodities. If you have a 15-17 per cent growth, then the risk of time correction is always there. But if there is a 30-35 per cent growth, the growth is exclusive, it is a rarity. In such a situation, the risk of time correction does not come through unless the 30 per cent growth falls to 20 per cent growth. Like for example -- HDFC Bank used to grow at 30 per cent, then from 30 per cent it came to 28 per cent, then to 25 per cent, then to 22 per cent and 18 per cent.Over the last 25 years, the growth has stopped in HDFC Bank by 2-3 percentage points every four-five years but still, the stock continues to do well. So it is the way the growth stops, from 40 per cent suddenly you start growing at 15 per cent and the stock has to fall 40 per cent. But that kind of event is not going to come quickly, because if it does, then we will have bigger problems at hand not just dealing with one NBFC or one bank.What do you make of IT as we are into the New Year? Market seems to be jagged for ignoring any news that comes out of Infosys. Do you really see IT playing out as a theme led by the likes of a TCS or do you actually see some of the midcap names actually providing further potential going forward?In the midcap IT space, you can always find that one isolated bet and make money. But the real game for IT was when growth came back to 8-9 per cent even when the IT companies did not innovate enough. The price was going up because of the buybacks undertaken by these companies. However, it has been punctured after the government imposed the buyback tax. If you see post-July last year, i.e. post the Budget, the IT names are not doing the way they were supposed to do. IT is good for a pensioner; you want an 8-10 per cent return, you want a dollar-denominated return in your portfolio, then you are fine with an IT stock.Let\u2019s talk about pharma. A different story is playing there with various factors at play. Would pharma stocks be on your radar?It\u2019s the same thing as IT. An isolated pharma company could do well but broadly there are too many headwinds.You were talking about the compounders and classic cases. As we move to the next decade, will they continue to generate those kind of returns? We saw some new entrants in the last decade. Taking D-Mart for instance, people talked about the valuation that it listed at, it traded at but look at it, you are still sitting on sizable returns if you even bought it on the day of the listing. What happens to cases like these, what could challenge their growth?In 2001, HDFC Bank traded at a price to book of 7 times when it bought over Times Bank. From there, the stock has gone up 50 times. It is not that if a stock trades at 7 times book value, you cannot make money out of it but the time over the next four, five, seven, 10 years is of a few companies doing well. The narrative has changed from small is beautiful to big is great and that is applicable globally. Take for example FANG stocks, the BAT, Baidu, Alibabas -- they control 8 per cent of the global market GDP. In this era of globalisation, the big boys will have all the pizza for themselves and the small ones will only get a few toppings here and there.This whole scare in the market that quality is in a bubble, you completely dismiss that view?No, who am I to decide whether it is a bubble or not? If somebody says there is no value, I say who are you to decide if there is value or not? The value reflects itself on the screen. If the stock is getting manipulated it can last for a day, for a week, for a month. You cannot have a manipulation running for two, three, four, five years. As long as growth is there the party will continue on Dalal Street. It is like the music at the late night party, as long as the music runs you cannot stop people from standing up and dancing.Where do you think that the outperformance will continue and where do you think there is a serious scope for mean reversion?Predicting trends is a loser\u2019s game. If you see a trend, change your train and get into it, do not try and anticipate it because these mega trends may defer themselves for three, four years also. Since 1995, there was this chatter of the US economy crashing. It crashed in 2008 and the crash was held back because of the internet innovation that created so much productivity that the US did not crash for 13 years. Do not go and predict a new trend but when you see a new trend you jump into it and it takes you three days to change trains.Are you seeing any new trends emerge?No. But all the trends we do not get to participate in are all in the private equity domain.How are you investing in this environment where you know that there is a lot of liquidity and very few stocks will continue to surprise you? Disruption has happened everywhere and largecap companies because of disruption are gaining market share. The question is how much of this thesis is being played out? People on the Street are saying that ultimately investing is about buying gold at the price of silver, not buying gold at the price of diamond?You buying gold at the price of silver is great but if the gold that you bought thinking is actually gold and turns out to be silver, then you do not have a great deal. And that is what happened. You need a catalyst for the valuations to change and there are several catalysts: A dividend, a stake sale, sale of land but the biggest catalyst is growth and growth is a recurring catalyst; it is not a one-time catalyst; it comes around year after year. As long as the growth continues, I do not think any trend would change but when the growth stops then you have to sell out and move out.", "keywords": [], "meta_keywords": ["Expert view", "financials", "midcap IT", "benchmark rates", "Basant Maheshwari"], "tags": ["midcap IT", "Rupee vs Dollar", "Expert view", "Basant Maheshwari", "SEBI", "Financials", "financials", "benchmark rates"], "authors": [], "publish_date": null, "summary": "", "article_html": "", "meta_description": "In midcap IT, you can always find that one isolated bet and make money, says Basant Maheshwari.", "meta_lang": "", "meta_favicon": "/icons/etfavicon.ico", "meta_data": {"description": "In midcap IT, you can always find that one isolated bet and make money, says Basant Maheshwari.", "news_keywords": "Expert view,financials,midcap IT,benchmark rates,Basant Maheshwari", "keywords": "Expert view,financials,midcap IT,benchmark rates,Basant Maheshwari", "article": {"tag": "Basant Maheshwari"}, "fb": {"pages": 400601983320296, "app_id": 117787264903013, "admins": 556964827}, "og": {"title": "Market trend moving from small is beautiful to big is great: Basant Maheshwari", "description": "In midcap IT, you can always find that one isolated bet and make money, says Basant Maheshwari.", "site_name": "The Economic Times", "type": "website", "url": "https://economictimes.indiatimes.com/markets/expert-view/market-trend-moving-from-small-is-beautiful-to-big-is-great-basant-maheshwari/articleshow/73056229.cms", "image": "https://img.etimg.com/thumb/msid-73056469,width-1070,height-580,imgsize-146609,overlay-etmarkets/photo.jpg"}, "website": "https://economictimes.indiatimes.com/", "object_type": "website", "twitter": {"card": "summary_large_image", "site": "@EconomicTimes", "url": "https://economictimes.indiatimes.com/markets/expert-view/market-trend-moving-from-small-is-beautiful-to-big-is-great-basant-maheshwari/articleshow/73056229.cms", "title": "Market trend moving from small is beautiful to big is great: Basant Maheshwari", "description": "In midcap IT, you can always find that one isolated bet and make money, says Basant Maheshwari.", "image": "https://img.etimg.com/thumb/msid-73056469,width-1070,height-580,imgsize-146609,overlay-etmarkets/photo.jpg", "app": {"country": "IN", "name": {"iphone": "The Economic Times App", "googleplay": "The Economic Times App"}, "id": {"iphone": 474766725, "googleplay": "com.et.reader.activities"}, "url": {"iphone": "etapp://articleshow/73056229", "googleplay": "etandroidapp://articleshow/73056229"}}}, "robots": "max-image-preview:large", "al": {"ios": {"url": "etapp://articleshow/73056229", "app_store_id": 474766725, "app_name": "The Economic Times App"}, "android": {"url": "etandroidapp://articleshow/73056229", "com": "com.et.reader.activities", "app_name": "The Economic Times"}}}, "canonical_link": "https://economictimes.indiatimes.com/markets/expert-view/market-trend-moving-from-small-is-beautiful-to-big-is-great-basant-maheshwari/articleshow/73056229.cms"}