Apr 22, 2016, 04.56 PM | Source: CNBC-TV18

Gujarat Borosil good pick, says Prakash Diwan

Prakash Diwan of is of the view that Gujarat Borosil is a good pick.

Prakash Diwan of told CNBC-TV18, "One space that we found very interesting is a glass manufacturer. We have suddenly seen a lot of price volume action within most of these active players. We spoke to a couple of them in last few days - Indo-Asahi Glass and Gujarat Borosil (GBL), you also have some of these guys who are into industrial like Saint-Gobain . Last week Saint-Gobain was a buzz in terms of volume and activity and price action as well. So, what we figured out is that all of them have seen two things happened. There has been a lot of pent-up demand that has kind of started building up, they have started seeing inventory build-up for the dealers especially on the engineering side, the industrial products."

"Borosil particularly mentioned the photovoltaic division that they had set up and in fact that has been a turnaround story. Till last year they were into losses and they have now moved into black. There they are saying that the kind of capacities that they have ramped up are already booked. They would need to enhance capacities probably middle of this year again if they really have to meet the demand that is kind of coming up for photovoltaic cells the glass that gets used into these cells. So, that is where we find this is a unique story that is given and of course the auto glass - Indo-Asahi and all of them have anyways been extremely robust even in the downtrend. So, these are pockets that you have where we believe Gujarat Borosil could be a very good pick," he said.

"Another small company on the same lines of different segment is engineering, procurement, and construction (EPC) space. That is another like we had J Kumar Infraprojects , NCC and all of them rave up there is small company called Welspun Enterprise . It belongs to the well known Welspun Group. They have an amazing asset book. They have very good contracts that they are executing. They monetise most of these at the end of the contract and not in the half way mark or partial booking of revenue. The book value of the stock which I am referring to about is Rs 80 plus and it is available at Rs 53-54, extremely robust order book. The management has given indication that once they start monetising a peak of it is going to be FY17-FY18, this stock could also need to be re-rated very soon," he added.
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