Pick Motherson Sumi Systems, says Ajay Bodke

Ajay Bodke of Prabhudas Lilladher told CNBC-TV18, "In the auto ancillary sector we like Motherson Sumi Systems especially after the five year vision that they have laid out with strong 40 percent return on equity (RoE) that they are projecting five years from now, from 26 percent and a topline of around USD 18 billion vis-à-vis USD 5.5 billion. They have laid out a strategy of restricting their exposure geographically as well as product wise. This is one stock where we are advocating investors to take positions from medium to long-term perspective."

"The other stock which hasn’t announced the result, but we are extremely positive on auto ancillary side is Bharat Forge. We understand that medium commercial vehicle (MCV), heavy commercial vehicle (HCV) cycle has turned around and Ashok Leyland’s results are testimony and in the concall the company did mention that the first sign or the greenshoots in case of MCV, HCV are visible and an expectation is that six months after the revival in MCV, HCV cycle the light commercial vehicle (LCV) cycle also turns around, so sometime in the first half of the current financial year you should also see the LCV cycle turning around. So Ashok Leyland is one stock which we advocate around auto side investors to look at," he added.

"In case of capital goods Ashoka Buildcon, one of the large road contractors, they have given out very good outlook. In the concall the company mentioned that the total orders which should be bided out by National Highways Authority of India (NHAI), ministry of road transport as well as the state governments till the end of the current quarter, till June 30 amounts something around Rs 45,000 crore. Rs 15,000 crore of orders will be bid out by NHAI on the build, operate and transfer (BOT) basis, Rs 20,000 crore on the engineering, procurement and construction (EPC) basis and around Rs 9,000 crore will be bid out by various state governments."

"So the addressable pie for all the road contracts is around Rs 45000 crore by the end of June and for the current financial year around 1 lakh crore of orders from NHAI and ministry of road transport and a further 1 lakh crore of orders from state government will be addressable pie available and the government’s emphasis on reviving the investment cycle primarily through increase in investments in the road, it dovetails well in roads and railways sector. I think this is a sector that investors should look at from medium-term perspective."