Rajen Shah, chief investment officer, Angel Broking selects Mahindra Ugine and Shanthi Gears as midcap multibagger stock ideas for the day. According to Rajen these stocks have the potential to earn better returns ahead.
"In 2012-13 the turnover of Mahindra Ugine will be about Rs 2,000 crore. Profit could be as high as Rs 30 crore resulting in an earnings per share of about Rs 10. I am exceptionally bullish on this company from a little longer term perspective." "Shanti Gears is low profile gear making company based in Coimbatore. This company was doing very well in 2008 and 2009. Both these years it reported approximately Rs 250 crore of turnover and about Rs 45 crore of net profit. This year the company will report about Rs 4 kind of earnings. But next year I do expect a repeat of 2008-2009," he added. Below is the edited transcript of Shah's interview with CNBC-TV18. Also watch the accompanying video. On Mahindra Ugine This company trades at about Rs 47. Between 2004 and 2008 the total net profit made Mahindra by Ugine in these four years was Rs 187 crore which is more than the current market cap of the company. The aggregate profit works out to around Rs 46 crore per year. At that time the aggregate turnover in this period was Rs 700 crore. On Rs 700 crore the company used to report Rs 46 crore of aggregate profit. Today the turnover has more than doubled but the profit is not even Rs 5-10 crore. In this long time the turnover has doubled. ItDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
