Multibagger ideas: Aashish Tater picks Ramco Ind, ING Vysya

In an interview to CNBC-TV18, Aashish Tater, head of Research, Fortunewizard.com recommends buying Ramco Industries and ING Vysya Bank. For Ramco Industries, Tater gives a target of around Rs 68-78 expecting a profit of almost 28-30 percent from medium-term perspective within six months.

Also Read: Pledged shares value in Q4 steady; 10 pointers: Edelweiss
In case of ING Vysya, he suggests a target of Rs 1,000 plus with a two to three year perspective. Below is the verbatim transcript of Aashish Tater’s interview on CNBC-TV18 On Ramco Industries
In the entire sector in which Ramco Industries belongs to, asbestos sheet has shown a very critical formation in terms of bullish triangle and that is why our quant modules has picked the stock for a target of Rs 68 and Rs 78. The logic behind recommending the stock is that when we try to run our correlation modules, there were few positive for the sector likes of monsoon which is going to be above average as per the guidance, making us believe that this particular stock will go to Rs 68-78 zone thus giving you a profit of almost 28-30 percent from medium-term perspective within six months.
In the development for this particular sector, whenever there is a price decrease many of the capacities go out of run and there is a short-term creation of lower supply and higher demand. Demand Year-on-Year (Y-o-Y) is growing by 2-3 percent, but because few of the capacities have already been leased out to larger players, there is a possibility that there will be no fall in the product prices despite the demand being sluggish if the monsoon does not auger well. Either side, this will be one stock which will give return to you.
The second better aspect is 20 percent stake that it holds in Madras Cements which is going to safeguard the stock from any downfall from Rs 45-48 odd mark. We have been bullish on this entire industry when it had difficult situation, when Everest Industries traded around Rs 110, Sahyadri around Rs 40-45. Hyderabad Industries around Rs 240-250 levels. So, there has been a sharp correction in the entire stock prices because people have fear of the price correction on the product side. But since those capacities are going out of steam due to cost overruns, again there will be shift in terms of profitability in the bottom-line for stronger hands.
This is one group which is very strong in terms of cash and portfolio along with Everest Industries and Hyderabad Industries, thus on downside and upside reward of almost 1:5, this is one stock that can be looked from short to medium-term trading opportunity for a target of Rs 78-85. A part of the stock around Rs 70 is facing the resistance where 50 percent should be booked once the target is achieved.
On ING Vysya Bank
The idea behind recommending ING Vysya Bank is that we have been bullish on this stock right from Rs 310 odd levels. Every year we were factoring in 30-35 percent net growth for the stock price in terms of appreciation and the worst case return was expected at 25 percent. In last three and half years, the stock has doubled itself giving an average return of 30 percent.
Going forward, the stock looks promising as the way the bank has positioned itself. It has stayed away from all the troubled sectors. It is luring for Current Account Savings Account (CASA) so that it maintains its growth momentum. Even on 550 branches and sitting on Rs 9,000 crore market cap, we still feel there is a 20-25 percent return that can be made even for the next year. There are a few sectors where 20 percent growth looks promising.
If you see the current situation, the stock has run up almost Rs 60-70 in a very short span of time but still if someone holds it from next two years perspective, he is likely to be rewarded 25 percent Y-o-Y for at least next two to three years. So, it is a portfolio bet where whatever you hold should be a hold. If you want to add on something, you should be adding on dips or even at current levels, because from technical perspective, Rs 570-575 is where large players would be interested in the stock and we have Rs 1,000 plus target on the stock from next two to three years perspective.
If you are holding something like Axis Bank or ICICI Bank where there has been some exposé talked about and there are some concerns, you can easily switch to ING Vysya Bank where the price-to-book value is less than 2 times and you are getting the same comfort because the parentage is very strong. Also, the balance sheet looks very clean and given the growth strategy for the bank even going forward this is one bank where we feel safety as well as risk reward is favouring the investors. It moves very slowly. It is not that it will rocket, but it will gradually give you returns and as portfolio investors what else do you want if your stock money doubles every three-three and half years. Disclosure: Safe to assume stocks recommended to clients.