Here are Mayuresh Joshi's top trading ideas

In an interview to CNBC-TV18, Mayuresh Joshi of Angel Broking shared his reading and outlook on the market as well as on specific stocks and sectors.Below is the verbatim transcript of Mayuresh Joshi's interview with Reema Tendulkar and Ekta Batra on CNBC-TV18.Ekta: Let us talk about all of these stocks, which are seeing a lot of impetus because of the liberalisation of FDI that was announced yesterday. One sector which stands out is the entire defence space, stocks like Walchandnagar, Bartronics, all of them rising. What is your sense in terms of whether we could see any sort of fundamental change because of this? Would you be a buyer as well?A: What has happened probably with the FDI liberalisation that the government has probably announced is going to have a positive impact on a lot of sectors defence in particular will see some amount of traction going ahead. What kind of flows probably come through or which companies will probably get affected? It will be a matter of time moving ahead but yes, it does open the floodgates in terms of greater technology probably coming through and probably acquisitions coming through in terms of listed entities.Having said that, probably a few stocks are looking probably good in terms of how the revenue prospects are expected to pan out. Bharat Electronics specifically in my opinion should do well going forward. With the kind of acquisitions in terms of the order wins that the company has generated over the past so many quarters, our own take is that the order book should probably reach its highs of around Rs 40,000 crore, which should be around four times FY18 revenues, which are expected to be around Rs 9,200-9,300 crore.Bharat Electronics is also a leader in the defence electronics space with 35 percent market share with expectations of orders coming through from the navy and the army. The entire aspect of margin improvement or margins coming ahead of expectations in excess of 17-17.3 percent by FY18 is not ruled out.My own take is that the sale should show a growth of 12.4-12.5 percent over the next two-three years. You are probably looking at a company loaded with cash, Rs 6,100 crore, you are probably looking at the operating cash flows in excess of Rs 1,200 crore. So it has got sufficient balance to probably generate RoEs in excess of 46-47 percent and again all these triggers in terms of FDI can have a positive impact.So my own sense is that Bharat Electronics in terms of revenue growth should do exceedingly well over the next 15-20 months.Reema: You also look at the consumer durable space very closely and in that it appears that Bajaj Electrical has underperformed its other peers. Anecdotal evidence tells you that the tide could be turning in favour of Bajaj Electrical and therefore you would recommend a buy?A: If you look at the business components of Bajaj Electricals, the E&P segments had been a huge drive on the consolidated performance but what it probably witnessed in FY16 was sort of a turnaround specifically on the E&P side.So again on the profitability front, it had seen significant traction, it has seen an improvement in the EBIT margins as well. If you are looking at a sizeable order book of around Rs 2,480 crore, the cost overruns that had been plaguing this segment is largely behind Bajaj Electricals. So my own sense is that the E&P segment should start performing exceedingly well over the next few years.The other segment that Bajaj Electricals operates out are the consumer durable segment, the lighting segment. With the kind of government push that we have probably seen within the lighting space itself, we should witness a huge amount of traction both in terms of topline as well as on the EBIT front specifically in terms of consumer durables going forward as well as the lighting segment.So my own sense is that the company has probably underperformed the markets but over the next 15-18 months, we can probably see 15 percent topline growth.My own sense is that the topline should come anywhere between Rs 6,100 crore and Rs 6,200 crore by FY18. The bototmline should be close to 29-30 percent over the next two years. So my own sense is Bajaj Electricals with its distribution network 4,000 odd distributors, it has got 4 lakh odd retail touch points with a burgeoning economy and expectations of GDP improving, corporate earnings showing an uptick should see huge amount of spike in terms of how their earnings are expected to pan out over the next 15-18 months.Ekta: Have you managed to look at IGL? It is a competitor of Mahanagar Gas and maybe even your thoughts on Mahanagar Gas, the IPO?A: If you look at the landscape, Mahanagar Gas is very attractively priced. On valuation parameter, it is much attractively placed compared to its peers. Secondly, if you look at the Mumbai market, it has got a monopolistic share going forward and with the kind of under-penetration that we are probably seeing both in terms of CNG and PNG, the expectations are that the volume growth should sustain at 17 percent.It has probably underperformed in terms of how the numbers have panned out over the last four-six quarters or even greater than that but clearly going forward, RoEs have been quite consistent in excess of 22 percent over the last four-five years, we are probably looking at a cash rich balance sheets again, you are probably looking at a different yield of more than 4 percent and all these factors in my opinion should play out very well. Again in terms of supplies, 86 percent of its gas supplies are coming at 3.06 mmbtu. So that is becoming a huge advantage in terms of how their cost dynamics pan out.Indraprastha Gas -- valuation parameter compared to Mahanagar is a bit more expensive but my own sense is that it is so attractively priced at this juncture that the stock will get subscribed quite reasonably and again the prospects in terms of their topline and bottomline look quite reasonable because of the kind of under-penetration levels that we have seen both in terms of industrial users as well as the local consumers here in Mumbai.