We will arrive for the time being limited figures. I hope you heard everything I said about those numbers. Are there initial thoughts about the stock and the sector in general?
Ashi Anand: If you look at the figures from Bharat Electronics, the income is slightly below expectations. But this is not something that concerns us too much, because the order momentum remains quite strong. The long-term macro-steel winds in particular the urge to indigenous of India’s important defense positions are clearly structural growth engines. So, a one -off miss for a company in a sector with such strong wind wind is not a great care.
That said, another positive is that the margins have arrived better than expected. Although we have not yet had a chance to go through the small print, both margins and profit are better than surpassed. So in general the figures are fairly fine.
This is a space that we enjoy a lot. There are limited possibilities where you have such a clear visibility of growth for the next 5 to 10 years. In defense, given India’s historically high level of Defense India, the world’s greatest importer was until Ukraine recently caught up with us a strong push from the government to native native, which offers a robust growth landing job for all defense-related shares.
Of course, the order flows in this sector can be lumpy and delays possible, which can lead to variations on quarterly-on-quarter. But the long -term prospects for the sector remain promising.
I would also like your opinion about the column sector in general, and especially on Coal India. Recently there has not been much discussion about PSUs such as Coal India. There was a time when the high dividend yield made the stock attractive, but lately the momentum has lost. There has been no significant news flow. Even today, the Ministry has announced that Coal India strives to reach a billion tonne of annual output by 2026-27, but there has been no excitement. Why doesn’t the stock perform?
Ashi Anand: When it comes to Coal India, the issue is more about the company and the sector, instead of a lack of interest in PSUs in general. In segments such as railways, defense and PSU banks – where there is a clear business momentum and profit recovery – we see investors interest in the PSU room. So why does Coal India miss it? When investors try to appreciate a company even if it is based on dividend yields-is the most important question the long-term sustainability of its income and return. In the case of Coal India, from a long-term perspective, there is a clear shift-of thermal coal to solar energy and other renewable energy sources. This is done at the macro level, at the government level and even within individual companies. Although you may be seen as a fund manager for the next 3, 5 or even 7 years, it will be difficult to project the profit for 10-15 years, especially when the very long life of the company is under discussion.
Yes, Coal India offers a high dividend yield. But if there is limited growth and you primarily relate to yields for returns, the concern becomes: how sustainable are that income? With the inflation on an annual basis that pushes the costs up, you must also increase income and prices. In a sector that is confronted with existential risks in the long term, that sustainability is uncertain. That is the main reason why investor focus and momentum are missing in the shares.
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