Shah`s view on Ashok Leyland

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Shah`s view on Ashok Leyland

Rajen Shah, Angel Broking view on Ashok Leyland.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rajen Shah See what other Experts & Brokerages are saying about Ashok Leyland See messages about Ashok Leyland Ashok Leyland BSE | NSE 01/06/12 Are Mutual Funds betting on Ashok Leyland? Other Stocks in this news Bajaj Auto | TRF |

Rajen Shah, Angel Broking view on Ashok Leyland .

Shah told CNBC TV18, "Ashok Leyland, last quarter was really surprising actually. It really did well and I think the outlook is also reasonable fine. The company should end up posting about Rs 5 or 5.5 earnings for the current year. So trading at about 10 times certainly looks decent enough to give you about 15-18% kind of upside easily and even if you see the numbers of Bajaj Auto I think they have been reasonably okay. They are expecting almost 20% growth in the motorbike sales."

He further added, "We are expecting Bajaj to report about Rs 100 kind of earnings. So that stock again at 12.5-13 times. It looks decent actually and it may give you about 13-15% upside. But the point is that are we in the market to make 13-15% return when there is a downside of 10%? The answer is obviously no because we are taking a risk of 10% and looking out for 13-15%. There are some stocks which can really give you much superior returns viz-a-viz market. Like I was not able to talk about when we talked about infrastructure."

"But in the infrastructure space there is one company which comes to my mind and which I like to highlight over here is TRF . Exactly a year back, this stock was about Rs 1200, about Rs 1175 and today the stock is at Rs 400-415. It's into material handling business and I think it's a Tata Group Company. Due to some reasons, the stock has been hammered out of shape but that's an exceptional reason actually and that has been taken care of. The stock is down 55% from the top. Tata Group Company, Mr. JJ Irani chairs this company and I think the next 1-2 years we will see a significant improvement in the top line. In fact, in the next 3 years, the turnover of this company is likely to be double from the current Rs 1200 crore to Rs 2500 crore and I think in the next 3 years it has all the potential to report at least 60-70% kind of earnings and maybe the stock should be at Rs 1000 on the next 3 years. So there are this kinds of opportunities in the market and that is where the small investors need to look at because we are not in the market to make 13-15% when the risk is 10%."