You have been tracking metal. I remember SAIL was your pick. But the China issue seems to be kind of throwing a spanner in the works for the metal trade. Would you avoid metals right now or do you have something on radar?
Metals have been a proxy to the dollar trade and we have seen the dollar come back from 99 to 104. People are on the side line because of China. But I think it is a win-win trade. The last three years were a blessing in disguise. Never in my life have I seen steel companies return capital to banks and there has been the deleveraging of balance sheets.
Steel stocks have become growth stocks rather than value picks. I am very bullish on select stocks because their whole functioning has changed. It is more of shareholder value, appreciation of value and that is very positive. So use all these declines to accumulate this basket or buy a mutual fund which has exposure to metals because I am very sure the dollar run is short-lived.
You cannot have gold and the dollar both rise. It is just a matter of time. The Fed has lost credibility and we are making too much out of the Jackson Hole event. Another two days and the market will be back to normal and metals will lead the charge. So Hindalco, Tata Steel, Jindal Steel, JSW, these are very good picks at this price.
I also want to talk about Jubilant Foodworks or something else in the QSR space. Is that something you would look at?
My top pick is Devyani International. It is the best combination of everything from Kentucky Fried, which by the way does not only sell chicken, it also sells vegetarian. There is Costa Coffee which is doing better than or as good as Starbucks and there is Pizza Hut. These three-four brands are doing exceedingly well.
Plus, there is talk of Popeyes coming by the end of the year. Devyani International can beat Jubilant Foods. So, Devyani with a two-year view is a doubler from here. Plus, we know how the new millennial spending and eating habits are growing. This is a beauty of a stock to own for Rs 190.
