Market headed towards 11,900 levels: KR Choksey Securities

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Market headed towards 11,900 levels: KR Choksey Securities

According to Deven Choksey of KR Choksey Securities, global cues are quite positive.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Mkt promising to go up to 11,400 levels: Deven Choksey Mkt will be trading sideways: KR Choksey Securities 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 Tantia Const BSE | NSE 25/05/12 Are Mutual Funds betting on Tantia Const?

According to Deven Choksey of KR Choksey Securities, global cues are quite positive.

Choksey believes that market is heading in the direction of 11,900 as of now with the fundamentals right in place.

With portfolios consolidating in, most of the funds are likely to pick up stocks with known names, he further adds.

Excerpts from CNBC - TV18's exclusive interview with Deven Choksey:

Q: A word on the markets the way we have shaped up right now, how does it look to you, sustainable at 11,480?

A: I think more or less market has cleared many hurdles. At the same time global cues are quite positive. We believe that market is heading in the direction of 11,900 as of now with the fundamentals right in place. 

Q: The action is once again focusing on the frontline space, do you expect the kind of secular move that we have seen over the last ten sessions to continue?

A: I think so as there would be select stock picking and portfolio building in coming days as well. With portfolios consolidating in, most of the funds are  likely to pick up stocks with known names. We believe that there is going to be a secular move continuing.

Q: Give us your argument for staying with Tantia Constructions , given that it is in a space where there is a lot of diversification from various players?

A: This particular company is looking quite interesting to us for their lucrative infrastructure lead construction boom, in which they have sizable presence.

At the same time there is visibility of earnings with bigger order book of more than Rs 900 crore, which is almost six times their last year annual revenue. We believe that valuation wise also the company is comfortably placed with current year's expected profit in excess of Rs 11.5 crore giving an EPS of about Rs 7.5 per share and forward PE of about 18. I think the company is quite comfortably placed with about 40% plus growth for the next three years.

Q: Keeping Rs 137 as the price as a stance as of now, what kind of target are you looking at for Tantia Constructions closing this year?

A: With this kind of EPS and about 18 multiple that we are seeing right now, it is quite easily possible for this company to scale above Rs 150-175 levels.

Q: At 18 multiple, where would you stack it up in comparison with its peers, and which are the other stocks in the same space that you would compare it to?

A: Patel Engineering is one with which we can compare with as it is an infrastructure lead construction activity. This company is favourably placed along with Patel Engineering but valuations wise on a forward PE basis it is slightly more favourable at this point of time.

Q: Do you hold the stock?

A: Yes, I think my investors maybe holding the position in this company.