Be selective in public sector banks, but we have cashed out from the housing financing space, Rajesh Kothari, AlfAccurate Advisors said in an interview with CNBC-TV18. Investors can look at cement sector which is still looking attractive.
We have collated a list of top five stocks which Rajesh Kothari of AlfAccurate Advisors is positive from his interview with CNBC-TV18:
In the PSU space, we continue to own BoB, SBI, and Canara Bank largely on account of non-performing asset (NPA) resolution and also an improvement in commodity prices. Most of the PSU banks have large exposure in the metal sector and therefore as the profitability improves, it will bring down credit costs over a period of time.
Also, new accounting norms will be implemented from April 1 and that will result in a probably weak set of numbers largely on account of stricter norms.
Companies like Asian Granito come into consumer space (home improvement) which will benefit directly from GST as the sector largely consist of unorganised players (40-50%).
The market share of Asian Granito will improve post the implementation of GST in the next 3-5 years, said Kothari. The company is in a very sweet spot because the volume growth will outpace that of the industry growth supported by new product innovations.
The company also follows the asset-like model which Kajaria’s of the world has followed over the years. After a lot of consolidation within the space done by the company, we believe that overall demand growth will improve and change in product mix from institutional to retail makes the company a value buy.
Prestige is the only company which has grown its revenue, cash profit, operating profit, and net profit by 10x in the last ten years which translates into over 20 percent compounded growth in the last 6-10 years.
If we look at the market cap compounded growth, it is less than 5-6 percent. Prestige is the second largest company after DLF in terms of revenues and more in terms of net profit close to Rs 400 crore. It has debt-t0-equity ratio which stands less than 1.5.
If we look at the cash flow this company is going to generate in the next 5 years and compare that with the market cap which is still low, deserves part to be our portfolio, said Kothari.
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