So with Zomato aren’t you worried about slow growth this is one of the companies that has really penetrated the big metros they go to small towns but in small towns going out and eating out is a party this is not practical. So, will it be a challenge for now?
When you look at a platform you look at the fact that it provides convenience and as you rightly said small towns may not be the story of convenience and that’s why you saw that they left 200 odd towns for 25-30. The top 30 still represent the bulk of their revenue as such and we believe there is enough potential to provide more convenience to consumers.
I think we’ll stick with that and frankly I mean it’s a trend maybe not now but later at some point when industrialization hits those small towns as well you’ll see that convenience will play to that extent and frankly that’s the appeal to India altogether.
What about your view of how things have gone within the Adani Action Group?
Frankly I don’t think Adani ever had a solvency issue I mean it was more of a valuation call than anything and they were very careful using their high priced stocks or whatever you want to call them currency to buy companies, real companies, as such they are obviously cash companies and I don’t think there is a problem here.
Basically, we were just looking at the bond payments that are due and the first bullets are somewhere in fiscal year 2025. So they’re pretty much in place there. Frankly, I mean again, the appeal here is that you should look at valuations and we’ve been very selective in that area. We have a few Adani companies and they are both in terms of cash flow or PE or valuations very much in line with what our guidelines give.
and Ambuja/ACC.
You get it.
Is it a good time, say, to buy more into Adani Group shares, the two names that qualify under your internal process, because there is currently a technical factor in play? Basically, nothing changes there, nothing changes for a cement plant as long as the demand is real, nothing changes for a port company as long as India imports coal and India exports machinery and grain. So is it a good time to maybe add more in, say, Ambuja, ACC/Adani Ports?
I won’t tell you if it’s time to buy or sell or whatever, but let me put it this way, ports businessI mean they represent about about a fifth of the port traffic in the country, they represent almost 40% of the container traffic in the country.
So it’s a massive player, ultimately the investor has to make their own call. Our position has been that whenever we have seen a correction in those names we have taken the names back and I will leave them there and frankly I mean our comfort level has increased much more in the correction to those two names .
I just wanted to understand also what is the outlook on the automobile because as far as I know there is no real exposure in space or it is very negligible?
Nothing. In fact, no exposure in space. We continue to believe that there is a big disruption in this space and we have seen that in the two-wheeler space, the growth has been taken away by electric vehicles. I think it’s only a matter of time before that happens in the photovoltaic space as well and in fact we’ve seen a new Chinese player come in and that’s probably the biggest maker of electric vehicles in the world today. I think there is a lot of heat in this space and we prefer to avoid entering it.