Exit Thomas Cook, says Devang Mehta

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Exit Thomas Cook, says Devang Mehta

Exit Thomas Cook, says Devang Mehta, Vice President & Head - Equity Sales, Anand Rathi Financial Services.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See previous views by Devang Mehta See what other Experts & Brokerages are saying about Thomas Cook See messages about Thomas Cook

Exit Thomas Cook , says Devang Mehta, Vice President & Head - Equity Sales, Anand Rathi Financial Services.

Mehta told CNBC-TV18, "Thomas Cook is finally trying to exit out of its India venture which is a very profitable under high growth venture for the parent company. Due to its own debt ridden problems the company is trying to do this and there will be some players in India like Cox & Kings who might be interested in buying its business, may be specifically the Forex business or the travel business."

He further added, "I feel a lot of rally into this stock is right now factoring this news and going forward there is a little bit of uncertainty about who will buy it and at what rates. So I would advice to book out of it and rather enter in a stock like Cox & Kings or Mahindra Holidays , which look better at this point given there robust fundamentals, given their good earnings quality and the spread and I guess somebody like Cox & Kings buying into Thomas Cook will expand Cox & Kings topline-bottomline and would be beneficial for it. So Cox & Kings would be a good replacement. May be not now but on a 5-10% correction on Cox & Kings would be a great buy."

"In terms of sale Thomas Cook may get a little premium valuation from what it is currently trading. It is trading somewhere around 11-12 times but it may get a little premium to that but that will solely depend upon the buyer and the terms and conditions laid down by both the parties. So there will be little bit of uncertainty surrounding the stock till that time and it will be fancied more by traders rather than investors."