Prefer HSIL: Daljeet Singh Kohli

Daljeet Singh Kohli - Head of Research at IndiaNivesh Securities told CNBC-TV18, "Hindustan Sanitaryware & Industries (HSIL) has two businesses building projects and glass divisions and container which is what they call as packaging products now because there are PET bottles also besides glass. This building product business last quarter did not perform well because there was too much of channel inventory. What we believe is that this time inventory has been created, so you will get numbers there and therefore it will comeback to 20-25 percent growth on the revenue part in building products. So year on year (Y-o-Y) growth will be still lesser but quarter on quarter (Q-o-Q) will be much higher on building products."

"Margins in building products are very good. The problem area was container division which is the glass business. In last two quarter we have seen that there has a curtailment of capacity. HSIL and Hindusthan National Glass and Industries' capacities has been kept ideal which has given them the pricing power and as result though the topline has not grown so much but the bottom line which was negative has turned into positive which is what is going to add to the consolidated number," he said.

"Over a period of time they will ultimately either demerge the two businesses and get them listed whatever corporate action they will take but as of now they have not announced. The other positive is that they have just raised Rs 250 crore through QIP which will go back into debt repayment. So that will bring down the interest cost."

"Overall we feel that in terms of its building products business it is a still at a discount to Cera Sanitaryware where the valuation catch up can happen. If glass container division starts performing well again there is value there. We feel that there is lot of value still left in the stock. Depending upon corporate action this value can be unlocked much faster. So we still like the stock."