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    Balmer Lawrie can give decent return in the short term: G Chokkalingam

    Synopsis

    'If it is put out for sale I believe that this can easily become a multi-bagger'

    ET Now
    In an interaction with ET Now, G Chokkalingam, Equinomics Research shares his wealth creation ideas.

    ET Now: Tell us about the first idea that you have as a recommendation to our viewers?

    G Chokkalingam: This Balmer Lawrie in fact I have been recommending for many years since 2007, I like it and personally also I hold the stock that is a disclosure.

    Now why I am reiterating is that in the last two days the government has indicated that they might diverse the stakes in non-core businesses which are held by the PSUs and particularly in the case of Balmer Lawrie company its holding company Balmer Lawrie investment has given already commitment to the RBI several years ago that they would diverse the stake in Balmer Lawrie company and wind up the holding company.

    Now this company has also turned around its profit growth in the recent two-three quarters and it is available at around 8 PE on one-year forward earning. It is a cash rich company and very interestingly and this is more than nearly 100-year-old company but in the last one year only the company has announced lot of aggressive expansion in the logistic space and in the logistic space they have got a very rich real estate assets.

    So if it is put out for sale I believe that this can easily become a multi-bagger so therefore I believe that it can give decent return in the short term but within the present regime of the government this can become a multi-bagger.

    ET Now: What is the other recommendation that you have for us?

    G Chokkalingam: This is a joint venture of Maruti Suzuki which has got 29% stake in this company. It is a very low profile but a beautiful auto component company. Why I am saying is that if you look at the last five years, despite a lot of meltdown or slowdown in the automobile sector, this company has posted almost around 11% CAGR of profit growth and on one year forward earning it is available at around 7-8 PE and now Maruti Suzuki having proposed to set up greenfield projects in Gujarat I firmly believe that a lot of new business would come to Jay Bharat Maruti being a joint venture of Maruti Suzuki.

    And also I expect firmly that in this quarter the industrial economy would turnaround including the automobile sector therefore I believe Jay Bharat Maruti can easily achieve a target price of anywhere around 180 in the short to medium term itself.



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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