Buy TRF, says Rajen Shah

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Buy TRF, says Rajen Shah

Buy TRF, says Rajen Shah, CIO of Angel Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rajen Shah See what other Experts & Brokerages are saying about TRF See messages about TRF

Buy TRF , says Rajen Shah, CIO of Angel Broking.

Shah told CNBC-TV18, "TRF is a new name for Tata Robin Fraser and Tata Steel owns about 32% stake in this company. So, it is a quality company and when the market cap of a quality company tumbles 75-80% from the peak it certainly warrants a look. Over the past 18 months the stock price of TRF has come down from Rs 1,175 to current levels of about Rs 265, so it's a 75-80% kind of correction."

He further added, "There were certain reasons for correction, one was misstatement by some senior officers of the company, however that stands corrected and is a matter of past. The other reason was that infra has slowed and is currently subdued and that's precisely one of the reasons why TRF stock has also taken a significant beating."

"In infra it caters to power generation, port sector, mineral and mining and it's connected indirectly the auto sector. All these sectors have seen a little slowdown and TRF has reacted a bit more than what it should have. Hence we are seeing the market cap down 75%."

"But the point to note here is that despite the infra spend slowing and the growth remaining subdued, we have seen 25% kind of jump in the first half revenue of TRF. Revenue has gone up 25% and the company has posted decent numbers."

"Going forward I am hopeful that maybe after six months the infra spend is going to pickup and all these companies which are related with infra will do exceptionally well. The management of TRF on its website has mentioned that by 2015 they would be doing turnover of Rs 2,500 crore which is double of what it reported last year, so it's a significant growth."

"I am expecting TRF to report at least Rs 40-45 kind of earnings for 2015. So it's a multibagger in the making. If one has a time period of three-four year, then one can treble his money in the stock."

Disclosure: We own about 3.5 lakh shares approximately of United Phosphorous and we also own about 40,000 shares of TRF in our PMS.