Look at Tata Elxsi, says Kunj Bansal

Kunj Bansal, ED & CIO at Centrum Wealth Management told CNBC-TV18, "The midcap stocks on the radar are stocks from the IT sector, although we are not positive broadly on the overall IT sector but this stock is more specifically company called Tata Elxsi. Let us not go by the Tata name which is much in the news these days. However, let us keep in mind that this is not a typical IT services company.""This company borders on the IT products and specialised services which is also reflected in its EBITDA margins unlike the standard 14-15 percent margins of the other IT services company, this company has an EBITDA margin of 25 percent plus. With return on equity close to 40 percent plus, again this stock falls into all the three criteria's which we are looking in the current market that the stock should have fallen inline with the current market fall to be able to give us advantage of valuation.""Secondly, the numbers till Q2 should have been good and the expected demand contraction of current quarter and next quarter should be as least as possible. So, this is where the stock now currently available at a 15 PE forward FY18 to us looks very attractive in terms of valuation which almost had gone to a PE of 30 at its peak," he added.