Book profit in L&T Finance: Ashu Madan

Ashu Madan, Religare Securities is of the view that one should book part profit in L&T Finance though the trend still is positive.

Madan told CNBC-TV18, “There are couple of stocks which have shown lot of strength, particularly L&T Finance Holding which we are talking about. It is not just because of the banking license, it is because of the fundamentals. I think suddenly there has been a rerating that going ahead the markets are looking slightly positive and there are certain stocks which will outperform the overall market. The theme has slightly changed. For the first time in last many months or more than a year we feel that the stock specific action would take over the broader indices. So I think within those across the sectors L&T Finance as you just mentioned about, it is not a run-of-the-mill finance company which is catering to retail, they are into construction equipment, corporate products, commercial vehicles and tractors. So I think for that segment there has suddenly been a fresh fancy. In spite of this sharp run up of approximately 35-40 percent which it has run up in the past I would say it will take a breather and probably it will continue to outperform to the next level also. He further added, “I think Rs 70-75 it will be prudent to book profits, because all said and done this sharp run up obviously will take a breather and it is not that continuously it is a one side journey and normally we have seen at times when this kind of exuberance comes in a stock they tend to get into an overbought situation at times, because suddenly there is too much of a buzz around the stock. So in any case I would definitely advise if not full 50 percent he must book between Rs 72-75 though the trend still is positive.