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Aug 23, 2012, 10.43 AM IST
Motherson Sumi Systems has target of Rs 225, says Mehraboon Irani, Nirmal Bang Securities. If you look at the balance sheet quite closely I think there are reasons to believe that this stock should possibly end up doing well. The numbers were good. I think the ROCE should be 40% by 2015.
Motherson Sumi Systems has target of Rs 225, says Mehraboon Irani, Nirmal Bang Securities.
Irani told CNBC-TV18, "Yesterday the companies mainly supplying to Maruti Suzuki I think shot up. But there are some decent players around. I have visited a couple of them in the recent past, which I think have a lot of value in them. The first one which comes to mind is Motherson Sumi Systems. I think reasons to be very positive. It’s become an absolute global company."
He further added, "If you look at the balance sheet quite closely I think there are reasons to believe that this stock should possibly end up doing well. The numbers were good. I think the ROCE should be 40% by 2015 and if you look at the way the company has spread itself across the world and the segment to which it is addressing, one can say that despite the overall uncertainties in the global environment the long-term outlook for the segment to which this company services is quite encouraging. Motherson Sumi share which is quoting as 1:2 cum bonus, I think we have a target of around Rs 225 for this stock over the next six months."
"Other companies which come to mind are possibly one of the oldest companies in the auto ancillary sector called Pricol which is Coimbatore based which is doing what is supposed to be doing or working on cost cutting and improving efficiency and I think possibly the story could unfold itself over the next 2-3-4 quarters for this particular company."
"So there are interesting names around here and the best part is looking at the way there is a slowdown in this entire sector. These companies having to work on trying to ensure that the margins don’t come off. I think there is value somewhere along the line if you assume that going ahead over the next 3-4 quarters things could start improving for the Indian economy and for the sector as a whole. So I think valuation-wise quite a few stocks come out. I think Motherson Sumi is my prime pick."
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