Ambareesh Baliga, Independent Market Expert recommends exiting Kitex Garments at current level and advises buying NBCC.
Ambareesh Baliga, Independent Market Expert told CNBC-TV18, "In Kitex Garments, even at the current level one should be looking at exiting because this stock has become a 20 bagger for not much of a reason. I think the performance was good but we should remember that they were trying to get out of their core competence area and get into something else which is basically building a brand, getting into e-commerce which is not really their core competence and based on that story this stock actually moved up from the levels of Rs 300-350 to close to Rs 1000."
"At that point of time, I had given a call to sell Kitex closer to about Rs 1000 and said buy Himatsingka Seide which was at about Rs 85-90 because Himatsingka Seide had done exactly the same thing about 4-5 years back, nearly 7 years back. They had built-up their brand, they had built-up their chains overseas and which is what Kitex was trying to do because of which you have a company which has already done all this, gone through that pain and today they are bearing the fruits and that stock was quoting at about 8 or 9 PE and something like Kitex was quoting at 50 PE. So, that is the reason, I had given a switch and that has worked out extremely well," he said.
"Even now I would say that utilise any sort of correction in the market to buy NBCC because clearly infrastructure is going to boom. We don't have too many such infra companies where the balance sheets are in a decent shape. So, this is one of those few companies which will continuously get orders and visibility is there at least for the foreseeable 5-6 years or may be more. So, any sort of correction should be utilised to buy this."The Great Diwali Discount!
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First Published on Jan 27, 2016 04:00 pm