Sell Bajaj Hindusthan: Phani Sekhar

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Sell Bajaj Hindusthan: Phani Sekhar

Sell Bajaj Hindusthan, says Phani Sekhar of 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?

Sell Bajaj Hindusthan , says Phani Sekhar of Angel Broking.

Sekhar told CNBC-TV18, "From a longer term perspective, the best of the Sugar rally is over because the current valuations already factored the peak cycles topline because the margins are again a function of where the mills are and the return ratios are again a function of what the capital structure of different companies is. If you extensively focus on Bajaj Hindusthan, I think this qualifies to be a sell clearly because of the kind of capital structure that they have with a very high leverage and even FY11 which is going to be the peak year for sugar. The return on capital is not likely to be more than 8% and already trading at around six times EV- EBITDA, this becomes very expensive. So I would advice the investor even if he/she is looking from a longer term perspective to book profits."