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  • Ravi Shenoy - VP-Midcaps Research, Motilal Oswal Research

    Ravi Shenoy

    VP-Midcaps Research, Motilal Oswal Research

    DATE: April 11, 2016, 12:00 PM

    SUBJECT: Top stocks to invest in the mid-cap segment

    MARKETS

CHAT CLOSED. READ TRANSCRIPT BELOW

  • MODERATOR:

    Hello and welcome to the webchat with Ravi Shenoy, VP-Midcaps Research, Motilal Oswal Research on “Top stocks to invest in the mid-cap segment”


    RAVI SHENOY:

    Hello


  • C

    CENTURY TEXTYLE SHARE I BUY 580 ON 9APRIL2016 SO WHAT'S A UP MOVEMENT IN EQUITY UP/DOWN ?

    I have purchased Century textile at Rs 580 per share on April 9, 2016. What is your near term outlook on the stock?

    RAVI SHENOY

    We do not have a formal coverage on the stock and hence I will not be able to comment on valuations. Cement as a business is what we are positive on from a short-term as well as LT basis and Century is a reasonable sized player in cement. This could provide some near-term tailwind for the stock.


  • R

    RASHI

    Midcap stocks have witnessed a spectacular 2015 with few of the names gaining up to 70%. Do you see the trend to continue in the calendar year 2016?

    RAVI SHENOY

    We expect Midcaps to have a stock specific move in 2016 after a generic MIDCAP rally in 2015. We advise investors to be selective and stick to companies with growth and strong return ratios.


  • M

    MALVIKA

    What are your top 5 recommendations from the midcap pharma space with an investment horizon of 1 year?

    RAVI SHENOY

    We are not very positive on the Pharma space and hence do not have indepth coverage on a lot of companies in this space. We currently have Granules India and Alkem Labs as BUYs in our coverage list. Given the USFDA action in the pharma space as well as expanding list of drugs that need to be sold in India at a controlled price, we remain cautious on midcap names in the Pharma space.


  • S

    SHEENA

    Ashok Leyland continues to benefit from demand for M&H CVs. Steady macro-economic growth, higher EBITDA margins, significant growth in market share and its network expansion in north India have helped the stock. What is your take on the stock? Should I buy the stock at current valuations?

    RAVI SHENOY

    We continue to remain positive on the stock and have a TP of INR121 with a 50%+ earnings CAGR likely over the next 2 years. This stock is recommended only for Medium\HIGH risk investors given volatility that we see in earnings as well as the stock.


  • J

    JOLLY

    What is the view on cement stocks keeping in view a surge in demand for cement in Andhra Pradesh and Telangana? What are your top picks in the midcap cement segment?

    RAVI SHENOY

    We have recently released a note on Cement suggestion positive traction in demand due to government’s Infra Push. We are yet to see the demand from the two states mentioned getting reflected into volumes for cement companies. However, we had recommended Sagar Cement recently as a play on expected demand from Andhra Pradesh and Telangana. The stock has crossed our target price in just two days since our report and we await 4Q earnings to review our numbers and the target. In Cement, we have BUYs on Birla Corp, Dalmia Bharat, JK Cements, JK Lakshmi Cement, Orient Cement and Prism Cement.


  • A

    AKSHAY

    Do you think mid-and-small caps could outperform their larger peers over the next 6-12 months? What are your preferred picks in these segments?

    RAVI SHENOY

    We believe strongly in bottom-up stock picking and believe that mid-and-small caps could continue to out-perform large-caps. We expect Midcaps to have a stock specific move in 2016 after a generic MIDCAP rally in 2015. We advise investors to be selective and stick to companies with growth and strong return ratios. Repco Home, TVS Motors, Eveready, Finolex Cables and PI Industries are five companies we have recommend to our “Investor” set of clients as focus Ideas.


  • A

    AADITRI

    What is your take on mid-cap banks? Which stocks look attractive from this segment?

    RAVI SHENOY

    We like only City Union Bank and South Indian Bank in this space and recommend to invest \ trade cautiously in this space.


  • D

    DEEPAK

    Post Budget, BSE Midcap index has outpeformed the market by gaining 11% as compared to 7% rise in S&P BSE Sensex. What is your view on this space going forward?

    RAVI SHENOY

    We believe strongly in bottom-up stock picking and believe that mid-and-small caps could continue to out-perform large-caps. We expect Midcaps to have a stock specific move in 2016 after a generic MIDCAP rally in 2015. We advise investors to be selective and stick to companies with growth and strong return ratios.


  • S

    SHILPI YADAV

    Do you see value in the small-cap space? Any specific stock that you would like to highlight?

    RAVI SHENOY

    We do not have coverage on the small-cap space currently and hence I will not be able to mention any names here.


  • U

    UJJWALA

    Havells India and Bajaj Finance from midcap are trading at their lifetime highs. What is your view on these stocks? Should one use the upmove to exit from the stocks or hold them from long term perspective?

    RAVI SHENOY

    We believe that both these companies are potential large-caps with a possible Index participant. Earnings growth in both is expected to be robust and we still recommend to BUY into these names. If you have holdings in these companies, I would recommend to HOLD from a LT basis. However, if holdings have grown to more than 15% individually, some pruning to protect portfolio risk would be advisable.


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