Shriram Transport is a top pick for 2012, says Jigar Shah, Sr. VP & HOR, Kimeng Sec.
Shah told CNBC-TV18, "Shriram Transport has to face some headwinds in terms of the policy of RBI in the current financial year and due to which we saw some kind of increase in the non-performing loans. Second due to the mining closure in the state of Karnataka also they had taken some kind of losses and that has spoiled H1 numbers."
He further added, "H2 numbers should be slightly better and FY13 also should be reasonable given that the demand therefore the used trucks is not as bad as the slowdown which comes into the demand for the new trucks and I feel that this company over a longer period of time has been able to grow over 25-30% and I don't see a reason why they cannot do it given that even today lot of the financing of the used trucks is happening through the unorganised moneylenders. So at 1.5 times price to book for next year and at a PE ratio of little over 7 times with RoE of 20% plus the stock looks very attractive at the current levels and the transaction related to TPG Capital if it goes into another stronger hand should not concern the investors. So there could clearly be a strong pick for us for 2012."
