Look at Ratnamani Metals, says Kunj Bansal

Kunj Bansal of Centrum Wealth Management told CNBC-TV18, "Ratnamani Metals and Tubes is relatively small or a midcap company with current marketcap of about Rs 2,600, have corrected almost 30 percent in last few months from its peak. Metals and tubes don't necessarily mean it's a metal company. It is more of a pipes and tubes company, just to segregate in case anybody has a concern on commodity stocks.""It is excellent company, good business model, highly corporate governance oriented management, zero debt, net cash company, of course because of the ongoing stress the growth in the topline has been relatively slower factor in last one or two quarters and that is why we have seen the stock correcting, but at the same time that is exactly the reason that one has to pick these stocks when they are at their bottom and I feel that is the case here again with a company despite being in a competitive business of pipes and tubes, has double digit margins, close to 15-16 percent return on equity, closer to 20 percent which are pulled down because of company's net cash; if that cash is used either in investment or capacity expansion or even by way of dividend distribution, RoE will look higher," he added."Now valuations have corrected to around 10-11 times forward PE and that is the reason, as I said if one is looking at a slightly medium-term, not immediate short-term, the stocks which are in the distressed in terms of price and valuation and not in terms of business and with an expectation that the business will pick up, this is one of those stocks."