Bajaj Hindusthan will underperform: Phani Sekhar

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Bajaj Hindusthan will underperform: Phani Sekhar

Bajaj Hindusthan will underperform the midcap index, says Phani Sekhar, Fund Manager, Angel Broking.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Phani Sekhar See what other Experts & Brokerages are saying about Bajaj Hind See messages about Bajaj Hind Bajaj Hind BSE | NSE 10/02/12 Are Mutual Funds betting on Bajaj Hind?

Bajaj Hindusthan will underperform the midcap index, says Phani Sekhar , Fund Manager, Angel Broking.

Sekhar told CNBC-TV18, "With the recent fact that has happened on this issue apart from that this complete sugar sector was in a sweet spot because super cycle had just begun and atleast you were assured of windfall profits till FY11. But with whatever is happening currently I think the difference between the state regulated price and fair and remunerative price announced by the center it were to be borne by the mill owners as it is being suggested from some quarters, now I think it would be meaningfully capped the upsides."

He further added, "We were expecting Bajaj Hindusthan to report somewhere around Rs 350 crore of profits next year but if the current scenario pans out just as I explained then there could be a shortfall of around Rs 75 crore. Valuations clearly do not factor in this, so I think Bajaj Hindusthan still from an absolute basis will give you returns but from a relative basis I think it will under perform the midcap index."