See 25-30% return in IFB Industries: Tater

See 25-30% return in IFB Industries, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Before discussing on IFB, let me take a call onto the index itself. We have been maintaining a neutral negative view for index to 4600 and on upside 5950. We were working on a case-to-case basis and we always had a theory that mayhem effect is going to come into markets, because the probability that after every three years or two years there is a mayhem effect on the markets and this has actually triggered with a probability of almost 70%. Take a call. Crude is going to correct to USD 87-86, that’s what charts are pointing out. Secondly, RBI has already started intervening at USD 54 equation. The third favorable situation that will build good case for bulls will be the earnings exponentials, because if you see this particular quarter has actually surprised us on upside when it comes to average returns."
He further added, "There will be problem into infra space which is known and with interest rate easing out I think that will also start participating. The numbers are already muted say for Sintex and others, but that the worst case has already been start building in and it’s already reflected into the prices. So the chance of downside to upside we feel now it’s the chance for the bulls to actually start and entering the markets. After a long time we had actually come up that yes, now the downside risk is protected and by the time when we will be factoring FY14 numbers we feel there will be very good chance for bulls on upside that will surprise us."'
"Taking a call on IFB Industries, it’s a quant call from our side. We have actually gone and studied last five year patterns and the stock normally tends to outperform during the July-August quarter and we feel this particular stock is normally range bound between Rs 58-84. We have taken the regression equation. So the stock has already made a low of Rs 58.05 for this year also in December as well as in Feb. So we feel if Rs 58.05 is not breached, the chance of testing its regression high of Rs 84-84.50 is quite high."
"Take a call from the balance sheet perspective and profit and loss account perspective, the company is roughly available at a market cap to sales ratio of less than 0.3 times. No other company in the white goods space with decent profitability, because we expect an EPS of close to Rs 10 for this year is available at these levels. So the problem for the company is that the entire market scenario is bad and that’s why these kind of stocks get punished. But since we are actually coming up that now the worst is getting factored in and people have already started shorting aggressively we think they will be surprised on upside."
"This is one stock that can be looked on from 25-30% return perspective from next three to four months. But it’s a very short-term call with a tight stop loss of Rs 58.05 on closing basis. We feel the risk reward would definitely benefit the brief." Disclosure: It is safe to assume stock has been recommended to clients.