Your stocks: Investment picks by market expert

In an interview to CNBC-TV18, Mayuresh Joshi of Angel Broking and Nooresh Merani of Analyse India shared their readings and outlook on specific stocks and sector.

Below is the verbatim transcript of Mayuresh Joshi and Nooresh Merani interview with CNBC-TV18:Nooresh Merani of Analyse IndiaVRL LogisticsIf we look at VRL Logistics, there is not much of technical data given that it is a new listing. However, overall it has been in a good trend post the IPO. As of now one can keep a stoploss at Rs 350 and hold on and maybe we can look towards a target price of Rs 450-460 levels over the next few months.Ceat Technically I would look at Ceat as an exit towards Rs 1,160 to Rs 1,200 levels. So, any bounce from hereon would be an exit.Mayuresh Joshi of Angel BrokingCeat The tyre industry is oligopolistic in nature, so fewer players coming through and the benefits of falling raw material prices, both rubber and crude oil derivatives are clearly playing on to the margins of these stocks. The EBITDA margin expansion is more or less to do with these factors. However, in terms of valuations, Ceat is a tad bit expensive. If one compares the kind of debt that it has got on its books, one needs to give a long time if one wants to make meaningful returns from tyre stocks. My take would be to sell the stock on rallies. You can probably look at the other stock on declines something like a Maruti Suzuki or an UltraTech Cement.Cement stocks When I was looking at the operational numbers of Prism Cement, a tad bit below what the street expectations are. However, clearly if you look at the kind of product mix that Prism has got, a majority portion of its sales comes from Central India and the rest goes to probably East India. Again, the kind of mix in terms of tile, bath and kitchen (TBK) and RSM, we are probably looking at ready-mixed concrete (RMC) business contributing in terms of how the EBITDA and the profitability is probably moving through. However, I think the cement industry has seen structural changes happening with fall in petrol prices and that is what has helped EBITDA margins for a lot of these companies. The capex plans that the company has got, the free cash flows will also take time for the company to start reporting in a much positive and a prudent manner. However, having said that, the debt equity at 1.9 times as on date is again a big overhang on to the stock. So, better opportunities if one really wants to look at the cement space, then UltraTech Cement and even ACC is something that we probably like. Clearly the volume growth at 5.61mt in the quarter gone by has been above our estimates. The EBITDA margin at 11.4 percent for ACC, again higher than what we had estimated. Our own take is with the expansion that is happening, clearly the kind of growth that one expects in the topline should be to the tune of 9-9.5 percent. The bottomline growth over the next couple of years, anywhere around 22 percent. From a valuation perspective, ACC trades at 8.6 times EV/EBITDA. So, clearly ACC is something that I will still prefer on declines. Keep a long-term view and the target that we have set on ACC is Rs 1,630 over the next 12 months.Maruti SuzukiGMR Infrastructure has structural issues even now on the balance sheet. If you look at the debt, the debt is still high; as on March 2015, it was Rs 47,500 crore. The interest component was quite substantial and out of the four business segments, the airport segment contributes nearly 50-52 percent of the revenue. The power segment has probably seen some amount of respite because of the subsidy received and the utilisation rates have improved. The road segment did witness some positive EBIT but again CARE Ratings has downgraded it. If you combine all these businesses together, the airport business has shown some decent operational performance with good operational and traffic growth both at Delhi and Hyderabad. However, I think in terms of cash flows, the company is still struggling. So, on a consolidated basis, we will still find that the company makes losses on the bottomline. So, clearly one needs to give time for this company to probably just have a look at its structural issues and again I think the kind of debt burden that the company has on its balance sheet, deleveraging will take some amount of time even if they are looking at asset sale. The investor is better off in my opinion. Probably either wait for significant declines on to the stock or look at qualitative stocks. So, what we like probably at this juncture is something like a Maruti Suzuki which has given decent earnings growth, stable management and healthy balance sheet. We have got a target set of Rs 4,960 on that stock. Even UltraTech Cement on declines. Our belief is that with volume activity expected to pickup, realisation expected to remain stable and with raw material cost remaining benign, the EBITDA per tonne for a lot of these cement companies should show some amount of uptick. With utilisation levels going up, return ratio should improve as well. We have got a target of Rs 3,282 on UltraTech. So, these two stocks can be preferred at this point of time but wait for corrections because structurally the company is still going through painful times as far as cash flows are concerned for GMR.