SBI & Tata Motors - Are valuations justified?

By Research Desk
about 3 months ago

SBI rose from Rs. 275 on 27th Jan to Rs. 400 on 5th Feb, a rise of 45% in 7 trading days. Similarly Tata Motors rose from Rs. 195 on 6th Jan to Rs. 330 on 3rd Feb, a rise of 70% in 19 trading days. What made these shares to show such a huge rise, that too when having presence in F&O, promoter stake of 58% in SBI, with present m cap of Rs. 3.50 lakh crore and for Tata Motors, promoter stake at 42% with present m cap of Rs. 1 lakh cr.

For Tata, news of its possible tie up with Tesla was circulated while in case of SBI, its Q3 numbers were cheered, while same were good but not exemplary. In both cases, Media ignorance or of their allegiance to Big Fish is seen to have played a major role. Media louded and praised on both stocks, while justifying such a rise and in guarded words, giving a buy call on both stocks at an elevated levels. We fear and apprehend, we will not be surprised to see both stocks correcting by 30% to 40% from its recent highs, in next 1 month or so, thus making moolah by big fish, by trapping gullible retail investors, to make them agonize like Fish out of Water.

Nowadays, Media and Hourly experts, by highlighting rising stocks, convinced or confused (not sure on both) retail investors to buy rising stocks only, without caring for its fundamentals or valuations, in collusion with large players, to see retail investors buying at peak. In the past as well, same Media gave sell call on Bharti Airtel at around 425 and buy call at 575. In Vedanta sell call was seen given at 100 and buy call at 175.

Though it is 'free for all' for Media and Hourly experts, but reminds us of 'Buyers' Beware' as well.

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