Print media space looking attractive: Damania

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS Mahindra Auto Steel relists on BSE at Rs 223.80 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 Nifty BSE | NSE 29/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news Bharat Petroleum Corporation | Hindustan Motors | Hindustan Petroleum Corporation | Mahindra and Mahindra | Spanco | Tata Motors | Mahindra Lifespace Developers | Ashok Leyland | Bharat Forge | Indian Oil Corporation | Maruti Suzuki India | Mahindra Forgings |

Anish Damania of Emkay Shares and Stock Brokers sees a good amount of visibility in the midcap construction space. 

 

In the midcap space itself, he believes print media offers a good investment opportunity, along with telecom vendors for companies, which, according to him, will benefit quite a lot going forward.

 

Damania gives his views on Mahindra Automotive Steel and his picks from various sectors.

 

Excerpts from CNBC-TV18's interview with Anish Damania:

 

Q: What are your first thoughts on Mahindra Automotive Steel and what do you think is a fair value for that?

 

A: If one looks at it, before this listing and before M&M had taken 47% stake into this company at a price of Rs 97, they had an equity of about 8.2 crore. The equity now stands at about Rs 280 million or 28 million shares.

 

So if I were to look at it, then I would say that let me first watch the performance of this company. In Q1, they did a net profit of about Rs 33 million before adjustment of the goodwill. If I extrapolate it, it should yield me an EPS of somewhere between Rs 7 and Rs 8 per share. 

 

The company has already announced that all their forging activities are going to come through this vertical, that is MASL.

 

Probably that is one of the reasons why the market is trying to pay a premium over the expected value of this company. So at this point of time, I would want to wait before I jump into the stock at this price.

 

Q: How would you compare it against its peer Bharat Forge?

 

A: Right now Bharat Forge is in a completely different league. It has very large capacities and a global presence. So I would say that it would be a while before one could start comparing this business with Bharat Forge.

 

Q: Any thoughts on the way they are going about growing their business because the management made the point that inorganic move will spearhead any growth for MASL?

 

A: That's right, because it takes about five-six years to get a customer, especially a foreign customer. So one of the best ways to do it is to go for inorganic growth. Opportunities are available in the European markets and probably even in the US market. So one could take into account those opportunities, if they come by at a reasonable valuation.

 

Contd on page 2....