Here are Aashish Tater's top trading ideas

In an interview to CNBC-TV18 Aashish Tater of fortunewizard.com shared his reading and outlook on the market.Below is the verbatim transcript of Aashish Tater's interview with Sonia Shenoy & Anuj Singhal on CNBC-TV18.Sonia: The stock that you like is Rossell India what is the story there and what kind of a target price have you ascribed?A: Rossell India is not only into tea but also in quick service restaurant to its Kebab Xpress and also into defence play. Of the three businesses, that attracts us most which is right now at a peanut level of Rs 28 crore of revenue is a defence business. If you see the entire gamete, the entire tea space will get re-rated because coffee prices are also going up. That is why you have seen that old calls of us whether it was Jay Shree Tea or even Mcleod Russel has given you 20-25 percent return.Rossell India, used to do some Rs 110-120 crore of sales from their tea estate business. They will do close to that because the prices are reaching their 2013 levels. They can do close to Rs 25-30 crore of profit after tax (PAT) from that business itself.If you look into the other businesses the most important is that Boeing has awarded Rossell India subsidiary Rossell Techsys as one of the key suppliers and has awarded them with a golden award recently for the 2015 supplier of the year award. That space is going to grow at a pace of over 100 percent that is what we estimate and they are into also defence space with DRDO. So, this is one niche that the company is working on and we feel this can be bigger than the current market cap over next three to four years.So, there is lot of potential in this business. Right now we are just working with a target of Rs 160 based on the entire value that we see over next six months period. This is one stock that has a potential to give you 20 percent plus compound annual growth rate (CAGR) returns for next three to four year. So a stock that can be looked upon and with tea stocks going up, I think there could a significant re-rating even after the Rs 160 odd mark. This is one stock that can be looked upon from short-term to medium-term to long-term.Anuj: The other one on your list is Cimmco, what is the story here?A: If you see whenever we pick stocks our one of the criteria is the pedigree of the promoters. Cimmco used to be Cimmco Birla company and still people think it is a Yash Birla Group company, when I talk in general.However, it is a 75 percent subsidiary of Titagarh Wagons and no impetus of with Yash Birla Group any more. So, you are getting a 200 acre Bharatpur land that will be used for defence as well as a part will be used for wagons. This can be one play that we feel could be very big going forward.Right now, they are sitting on a decent order book of Rs 100 crore and they will be getting more orders in the space because this is just a start for the business. That is why you are getting a company at such cheap market cap of Rs 140 crore odd. If someone has a view of two to three years, this can be a potential multi bagger and we are just working with a target of Rs 125. It is because right now things are not moving that fast.However, once things start getting and they start getting orders, we feel this can be a big opportunity going forward. Again a stock where we feel 20-30 percent CAGR on the stock can be expected over next four to five years if defence orders that we envisage for the company comes into.Entire thing that I would like to say that why we pick stocks in the category which has got potential going forward there are couple of reason because if you remember we picked La Opala at just Rs 60 when it used to be a Rs 10 stock. Our logic was very simple that there has been a change, there has been a push and that was on the spending lifestyle.This time the government is entrusting on defence space, so we think this is where a larger business and opportunity will come in the decade or so. This can be huge re-rating sector because right now the valuation of the entire defence play in India is at peanuts level compared to the potential it offers. So, once it gets re-rated, I don’t know which stocks will outperform. It is good to have all the stocks in our portfolio and wait for triggers going forward. So, a small portfolio can be made of large players and these smallcap players with good pedigrees.Anuj: You have a call on Tree House Education, is it a good buy at current levels?A: It is not about price this time it is about what Supreme Court ruled in case of Mark Construction. Now if you see the entire gamut, in December company comes out that they will merge with Zee Learn. Zee Learn announces that they will be a swap ratio in January and there is a huge momentum in to the stock.Now what happens after that is a very interesting thing. Supreme Court in case of Mark said even if the target company becomes unviable you cannot back out of the deal under any circumstances. Now when you see that voluntary thing that was for cash open offer but if you go to any US or euro markets you will say that there could be an exchange in cash and kind or a combination of both.For example, if you want to buy ABC limited and XYZ wants to buy it, it can give you entire cash or it can give you a part of it shares or give you entire swap holding of XYZ Ltd. This is technically the same terms and they should not back out from this thing. That is why the entire things has come up.Now, what will happen is it will be a long code battle definitely for shareholders. How it will shape out is again a case because they have just said that they will review what will be the share swap ratio and if there will be no change in share swap ratio, I don’t think there will be any legal battle against Zee Group, Zee Learn in specific or Tree House.What worried us was the substantial reduction in cash. A merger happens after a due diligence. If you see the exchange approvals, there the valuations report is put up by the individual third party that means valuations were done, they must have gone and see the cash in hand, it is not that it is lying into the office but it is lying into the banks. So, this sudden reduction of prices and everything gives you a probe and that is why there has been a report on weekend that Securities and Exchange Board of India (SEBI) is probing the issue.However, we feel that if someone goes with this angle, technical angle that you cannot withdraw an offer because it has become economically unviable after you have announced that you will be the major shareholders in this may be not by cash but via exchange of shares, I think they should not be allowed to back out from this particular deal or announcement.