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Do you own these midcap plays?
Lot of midcaps and smallcaps got slaughtered over the last few days. Investment Analyst Ashish Chugh discusses two interesting midcap picks - Shetron and Indag Rubber - which one could take a look at now.
Lot of midcaps and smallcaps got slaughtered over the last few days. Investment Analyst Ashish Chugh discusses two interesting midcap picks - Shetron and Indag Rubber - which one could take a look at now.
Bangalore based Shetron caters primarily to two business segments - food and dry battery jackets. This company has two manufacturing plants. In the food segment, this company manufactures metal cans and supplies these cans to food, dairy products, soups and beverages companies.
In the dry battery cell-jackets this company claims to be the largest manufacturer of cell-jackets in the entire South East Asian region. This company supplies to almost all battery manufacturers including Eveready, Novino, Nippo, Toshiba and Fuji.
As far as the potential of the business is concerned, Chugh believes that with the retail boom, and with the food processing industry taking off, this company has a lot to offer.
"To take advantage of the growth opportunities which the market offers, this company is setting up a joint venture project with a Danish company for making a specialty packaging caps," he adds.
Moving on, Indag Rubber is into retreading. This company manufactures procured treads and supplies it to the franchisees. It operates on a franchise model where the company provides procured treads and the technical training to the franchisee and the actual retreading business is carried out by the franchisees.
"Every year millions of tyres are discarded, which find their way into land fills and tyre piles, leading to endangering of the environment, so because of that this business is gaining more acceptance on a world wide basis," says Chugh.
He says that this company has the potential to double its revenues in the next few years. "The management is also contemplating increasing the capacity at one of the plants which will lead to increased scale of operations. So at Rs 26-Rs 27, it is a stock which offers good value," he adds.
"To take advantage of the growth opportunities which the market offers, this company is setting up a joint venture project with a Danish company for making a specialty packaging caps," he adds.
