Atlas Cycle may give good returns, says Rajen Shah, CIO, Angel Broking.
Shah told CNBC-TV18, "Most of consumer stocks have run up a lot and they have been very big out performers but I think at this point of time many of the stocks are quoting at very rich valuations. I think most of them are quoting at rich valuations; Titan at about 30-35 PE multiple, Bata at more than 25 PE multiple. So I would certainly avoid this. One of the stocks I would like to highlight for the viewers here in this consumer theme is Atlas Cycle."
He further added, " Bata , VIP they were highly under owned, un-fancied, not spoken about in media and they were quoting at very compelling valuations. One of these company which comes to my mind at this point of time and looking very interesting is Atlas Cycle. The market cap of this company is Rs 80 crore and the turnover is about Rs 800 crore, so it is quoting at one-tenth the sales. If the consumer themes are picking up I think Atlas Cycle because higher commodity prices means higher income for the framers and when farmers make more money I think they would buy this product because that is the most important mode of commuting in rural part of the country. So Atlas Cycle is one stock which could give you fabulous returns over the next two years."
