M&M good investment idea, see 15% topline growth: Kunj Bansal

Kunj Bansal of Centrum Wealth Management told CNBC-TV18, "The opinion is obviously in a rising market, the momentum market, high beta stocks are the ones which keep participating and it applies both ways. It does not apply only when the journey is upward. It applies equally when the journey is downward as well. In those high beta sectors and stocks obviously, come the sectors like banking, real estate and auto. As a result, we have seen large participation from a lot of auto original equipment manufacturers (OEM) as well as auto ancillaries." "In terms of stock specific ideas, we have Mahindra and Mahindra. Now, it has been noticed that in their last five months tractor sales, we have continuously been seeing a growth in the range of 15 and 20 percent which for almost 15-16 months before that was negative. Although in terms of topline, the tractor sales contribute only about 30 odd percent, in terms of earnings before interest, taxes, depreciation and amortisation (EBITDA) it is 40 percent plus. But in a scenario wherein a large part of banking has been on the good monsoon expectation and actually panning out of that which has happened till date, obviously, the contribution of sales and EBITDA from this segment is likely to go up," he said."For the last two years, if you look at the financial numbers, the topline of the company has been quite flattish. Compared to that, the expectation basis, the growth that has been happening is that in FY17 and FY18, we should see the company returning to about 15 percent kind of topline growth. That is where the call is that this is one stock which backed by the monsoon, also backed by the good demand that is building up in the utility vehicles segment. In fact we have a waiting, not only for some of the Mahindra and Mahindra models, some other competitor models as well.""These are the factors which will give a good accretion to its earnings expectation and its earnings are very soon. Its results are on Wednesday, August 10. Not necessarily that this quarter is something to be backed upon, but if one takes a medium-term view, this stock looks like a good investment."