VK Sharma, HDFC Securities is of the view that investor can buy UB Engineering on dips.
Sharma told CNBC-TV18, "We like UB Engineering. It is a desk research; we have not met the management. But the kind of public airing that they have done in terms of their visibility that they have shown, the CEO is on board to tell that they see an increase of around ten times sales in the next four years that gives you a CAGR (Compound Annual Growth Rate) of 77%. Then you have Mr Mallya himself talking about this company as a USD 1 billion company three-four years down the line that is further improvement."
He further added, "Currently, it is not very expensive. It is available at Rs 175 which is what 9.5 times the historic earnings of the March '10 years. So from that perspective, looking at the good visibility that the management has and also looking at that it wants to emerge as a EPC company for the oil and gas business and other business also, both of which have a very high amount of visibility, I think this is the stock which the investors can easily buy at dips. The small stocks will not outperform the markets in a big way. In a falling market, you will feel much better and more comfortable with these stocks which have a very high amount of visibility going forward. The price target, 50% is already met. But going by these further good results that this quarter has shown, I think one can easily look forward to year-end target of around Rs 250 in this particular stock."
