At the end of the September quarter, Biocon’s consolidated debt stood at over ₹5,000 crore, a figure that has drawn investor attention. However, Maheshwari believes the balance sheet stress is manageable, particularly in light of improving cash flows.
“Definitely. So, one thing is that that debt of ₹5,000 crores over the next two or three years, given the cash flows, I think that is going to take care of this. This QIP is largely because the stake they bought out from one of the holders of BBL, that needs to be paid, and this money will go towards that. So, this is for that and as far as the debt is concerned, in the next two or three years the cash flows are pretty strong for the company,” he said in an interview to ET Now.
Within the pharmaceutical space, Maheshwari remains constructive on Biocon, even flagging a personal investment in the stock. He believes the company is entering a phase where earlier investments could begin to pay off.
“So, I want to make a disclosure, I am owning Biocon in my portfolio, so that might be a bit of a bias if I am giving you a view, but definitely Biocon, with this consolidation and the launches which are likely to happen in the next one to two years, is in a very good sweet spot. And if you really look at it, in the last two or three years, they have made a lot of investments, and I think that is going to fructify in the next two years, so that is why I continue to remain positive on Biocon,” he said.
Beyond Biocon, Maheshwari highlighted contract development and manufacturing (CDMO) as one of the most promising sub-segments within pharma. “Within pharma, the bigger space which I like is the CDMO, and that is a space which is growing very, very rapidly,” he added, naming Laurus Labs as his preferred play in the segment. “So, I own Laurus and that is my top pick as far as the CDMO space is concerned in pharma.” Turning to the financialisation of savings theme, Maheshwari said asset management remains a long-term structural story, even though he does not track every listed name closely.
“So, I do not track Anand Rathi, so very difficult to say in terms of numbers, but broadly the space is really very interesting and very good, and a very long runway is out there. So, one should be invested in that space as far as portfolio is concerned. Now you may take your picks because the space is really a long-term play out in the country,” he said.
On banking, Maheshwari acknowledged the recent underperformance of large private lenders like HDFC Bank but said valuations were becoming attractive after a prolonged period of consolidation following the merger.
“So, I do agree that it is very attractively priced at this valuation and given that now the merger blues are behind it. So, it is an attractively priced stock at the moment. But then others are so as well. So, an ICICI Bank, comparatively, in the next one or two quarters, that has also not done much in the last two or three quarters, so I think that way you have to calibrate it, but it is a good trading bet at these prices,” he said.
When asked to choose between PSU banks and private lenders, Maheshwari drew a clear distinction based on investment horizon.
“So, if you are looking in the short term, it will be PSU banks, there is no doubt about that. And if you are looking for a medium-term kind of a thing, then I would go for private banks,” he noted.
On sectoral positioning, Maheshwari said metals still have room to run, supported by global asset allocation trends.
“So, I would be positive on metals as yet because I think that trade has not played out fully. So, there is some scope as far as metals are concerned. There is a broad trend across the world of owning assets, and that is why you are seeing that metals are doing well,” he said.
He also flagged opportunities emerging in the power space following recent corrections, particularly among companies less exposed to regulatory or geopolitical uncertainties.
“I would also look at some of the other sectors, especially power. The stocks have corrected quite a bit, and I do not think it is clear whether the Chinese companies are going to be actually allowed or not for the whole gamut of operations, but the stocks have corrected quite a bit, so that is another sector one can look at,” Maheshwari said.
Within power, his preference is tilted towards execution-focused players.
“So, the EPC players are the top guys, I would say. They are not going to be directly impacted by any of this. Rather, if Chinese companies are allowed, some of the products which they are importing from France and Italy are going to become cheaper. So, I would play the EPC guys because they are placed much better than anybody else. And then secondly, it would be the equipment suppliers and third, maybe financers. But financers are like banks; I would actually play banks more than the financers,” he added.
