Buy Tube Investments at current levels, says Harmendra Gandhi, Research Analyst at Nomura.
Gandhi told CNBC-TV18, "Tube Investments of India is a play on India consumption; the high-end bicycles. They have 40% market share in the country also if you look at their two engineering and the metal form business they have dominant market share, again a play on the growth in autos and cars in India and both these engineering and metal formed have very high RoCE, top quality businesses, all the three cycle business is generating RoCE of more than 100% in the last six months."
He further added, "The valuation looks little higher because they have these financial subsidiaries Cholamandalam Finance and Cholamandalam Insurance. So if you adjust for investment in those - even at the book value market value is much higher, even if you adjust for a book value the investment in those subsidiaries the stock is trading at 11 times one year forward, so we think it
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