Multibagger ideas: Aashish Tater picks 2 undervalued stocks

In an interview to CNBC-TV18, Aashish Tater, Head of Research at Fortunewizard.com has recommended Apollo Tyres and Container Corporation of India (CONCOR) as his multibaggers for the day.

According to him, both the stocks are relatively undervalued. Houseviews: 4 stocks that brokerages have thier eye on Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy. Q: What kind of targets do you see on Apollo Tyres? A: We recommended JK Tyres, Ceat earlier at Rs 80-90 levels. They have already given 50 percent return. At that point of time, we were also bullish on Apollo Tyres. The model is stating renewed interest, where we feel a target of Rs 109 is quite achievable in the short span of time. There are a couple of reasons for us to believe that this could be a good bet at current levels. The market will be rangebound with hits and misses and guesses whether the Nifty is going up or down. So, rangebound trades would be very interesting to play with rather than venturing out for some new stories. That is why we picked a sector like tyres. The original equipment slowdown will not impact the tyre industry because the replacement business will do well. So, from that angle, this is a plus point. The Competition Commission of India's (CCI) ruling was interesting. It will not be negative for tyre companies for quite sometime. With the ruling coming in, there was not substantial movement even on the price front. The weak hands are willing to exit at current levels. Take a call from the result expectations front, the market is chalking out Rs 140-150 crore range of profit on consolidated front for this particular company. There is a slight miss because we are working with a number of close to Rs 178 to Rs 182 odd crore and top-line of almost over Rs 3,300 crore. The marketcap to sales, even adjusted with debt for the full year, is relatively undervalued to MRF. Given that this is one of the F&O players, where a lot of hedging can be done through writing calls and writing puts, we think it makes a lot of sense for rangebound traders to venture into this stock for 20-25 percent return from the next six months perspective. Q: What kind of a target price you have on Container Corporation of India (CONCOR) A: Container Corporation of India is an interesting story, given that it is almost sitting on 25-30 percent of its marketcap as cash equivalent. This stock is relatively undervalued, given it has pan India presence. It is roughly trading at adjusted PE of less than 11 times going forward. We feel that eventually companies like Container Corporation of India and other players would benefit a lot from this kind of development, where14-15 percent bottom-line growth would be visible. Yesterday’s results were stellar. It had a miss on top-line basis, but still the numbers were very good on the bottom-line front. Going forward, similar kind of propositions can be seen in this particular stock.

From next 12 months perspective, we are working with Rs 1,300 price target on the stock. But if you were looking for two-three years safe investment bets, this is one stock you can look at. One can also accumulate at current levels slowly because this is a very illiquid counter. A thousand shares are traded roughly. But eventually with the story coming up, it could atleast touch Rs 1,300 within one year. Disclosure: No personal positions but safe to assume that the stocks discussed may have been recommended to clients.