Check out: Here's Bhavin Shah's 4 top picks

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Check out: Here's Bhavin Shah's 4 top picks

In an interview to CNBC-TV18, Bhavin Shah of Equirus Securities picks Supreme Industries, Amara Raja, Nesco and FAG Bearings as the four stocks he continues to like.

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In an interview to CNBC-TV18, Bhavin Shah of Equirus Securities picks Supreme Industries , Amara Raja , Nesco and  FAG Bearings  as the four stocks he continues to like.

"Supreme Industries can deliver about 15% plus growth over a sustainable future," said Shah, adding that he at current levels, the stock has become very attractive. "Our target price is about Rs 240," he tipped. Further, on Amara Raja, he sees a big up move in the stock.

He also sees values in Nesco due to the two very stable revenue streams and suggests a target price is Rs 900 plus. On FAG Bearings, he said, "The company is growing at 15% and is likely to continue. We have a Rs 1,600 target price with significant upside from current levels and that's why we like the stock."

Below is an edited transcript of Bhavin Shah's interview to CNBC-TV18. Also watch the accompanying video.

Q: What is your view on Supreme Industries?

A: We continue to like Supreme Industries. It's a business model that is not severely affected by the economic swings that we see. They have a diversified plastic processor, which is India's largest and they depend on in-house effort to deliver a wide range of products whereas a lot of other players are more specific to one product line and often depend on foreign collaborations.

Supreme Industries is also going to benefit from some local manufacturing of raw materials being set up by some of the Japanese suppliers. And the company has a very clean dividend paying history and obviously, in line with the correction in the market has also come off.

We continue to think that this company can deliver something in the range of 15% plus growth over a sustainable future and at current levels has become very attractive. Our target price is about Rs 240.

Q: You are buying something like Amara Raja, what is the kind of price target?

A: Amara Raja had delivered much more stable results than it's larger competitor Exide. We have a price target of Rs 260, it continues to trade at a very attractive single digit kind of multiples. In our auto industry where because of large volume growth, especially in the 2-wheeler segment in the last couple of years, we are going to see lot of replacement in demand. With Johnson Controls being a strategic owner in the company, there is also a lot of comfort with respect to some large multinational overseeing the corporate governance issues. So, we continue to like Amara Raja, we see a big up move in the stock.

Q: What is the story that you like Nesco for?

A: Nesco owns the Bombay Exhibition Centre along with development of high quality office space in the same premises. These two properties are the sources of revenues and both are very stable and steady. Bombay Exhibition Centre has very high visibility, most of the high quality exhibitions in India happen there. So these are two very stable revenue streams that the company enjoys and we believe that market will factor it overtime. Our target price is Rs 900 plus.

Q: FAG Bearings has been an outperformer this year, with about a 15-16% growth. Do you expect that to continue next year?

A: FAG Bearings is affected by whatever happens to the Indian industry environment. But we think that 15% growth is quite achievable for this company, they have delivered a constant 30% kind of returns on capital and we think that those things are possible to sustain. So, using only 8X calendar 2012 earnings, we come up with Rs 1,600 target price which is significant upside from current levels and that's why we like the stock.