Bhavin Shah's views: Sun TV, Nesco, Amara Raja

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Bhavin Shah's views: Sun TV, Nesco, Amara Raja

Bhavin Shah, CEO, Equirus Securities in an interview with CNBC-TV18 gave his readings and recommendations for some midcap companies across sectors, which are expected to do well.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Sun TV Network BSE | NSE 31/05/12 Are Mutual Funds betting on Sun TV Network? Other Stocks in this news NESCO | Tata Consultancy Services | Amara Raja Batteries | Greaves Cotton | Supreme Industries | Exide Industries |

Bhavin Shah, CEO, Equirus Securities in an interview with CNBC-TV18 gave his readings and recommendations for some midcap companies across sectors, which are expected to do well.

Below is the verbatim transcript of Shah's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video.

Q: Just want to start off by talking about Sun TV , the stock that has really been in the news flow over the last couple of sessions and how you would approach it and what you have made of the news?

A: It is still difficult to predict how far chain of events will affect Sun TV management especially owners. We believe and that what makes Sun TV risky investment in near-term is subject to sort of volatility. However, we believe that by and large business model is not going to be affected.

Even if there is a severe impact on the business in Tamil Nadu, Sun TV's business is no longer dependent on Tamil Nadu alone. That is the reason why we feel that investors who are willing to digest near-term volatility it is a stock that could be considered as an investment with a willingness to average down.

Q: You have picked an interesting stock which we don't usually talk about, Nesco . Take us through the story there.

A: For people in Mumbai you probably might have heard of Bombay Exhibition Centre. Nesco owns Bombay Exhibition Centre and a land of 60 plus acres around it on the Western Express Way.

They have two main business, one is the exhibition centre, and second is IT parks where they ran space. The story is not typical real-estate, this is more of a story of rental income from exhibitions as well as the office facilities that they rent out. Their clients include the company like TCS .

They have tremendous upside potential in terms of developing more assets, both on the exhibition side as well as on the IT park side. And that will lead to a huge growth in the rental income over coming years.

We believe that the stock is worth more than Rs 900 compared to where it is trading around Rs 530 odd. That is really why we like it. Bombay Exhibition Centre is a premier exhibition facility in India and the second largest exhibition facility. It is clearly a prime location for exhibition in Mumbai. So that is the story behind Nesco.

Find out: How to play volatile stocks Sun TV, Punj Lloyd?

Q: What about Amara Raja ? That is the story far more liquid and more researched. Do you think there is a lot of upside there?

A: Last couple of years have been very strong for automobile sales. We are already seeing slowdown in automobile sales this year. However, Amara Raja depends on replacement demand as well.  With more and more focus on battery start vehicles even for two-wheelers, there is huge demand for replacement.

Amara Raja has put in place capacity to take advantage of that. This is the key driver for the company. It continues to trade half the valuation of Exide . We are looking at the target price about Rs 265 odd on Amara Raja.