Prefer Apar Industries: Rahul Arora

Rahul Arora, CEO at Nirmal Bang Institutional Equities told CNBC-TV18, "Apar Industries is basically into conductors and lubricant oils. The oil part of the business has suffered because of the way crude has done but if you look at the core business which was the erstwhile high tension (HT) and low tension (LT) cables, they are winding that down and they are getting pretty bigger to the optical fibres space. It has not had a very strong financial track record off late but we are expecting a very substantial job in the return ratios of this company over the next two years. It is probably going to be generating close to about Rs 500 crore of free cash flow over the next two years. It doesn’t have too much debt on the book.""Apar Industries is an industry leader in the conductor space in India and the amount of work that is being outlined in terms of power distribution in the transmission and distribution (T&D) space, Apar is one player that is bound to benefit. If you take a call, crude oil has sort of bottomed out that part of the business should also stabilise and start doing well. This is a very steady state business from hereon if you are expecting that capex to come through. Good return ratios, steady management and a very significant cash flow coming to you at fairly reasonable valuations," he said."I think it is a low double digit valuations if you value it on 17 or even 18. I think it is a reasonably medium-tem to long-term story to be played in the capital goods sector with visibility on cash flows."