Vinit Bolinjkar on two hidden gems that he is betting on

"We find the Electronic Mart India (EMI) IPO that is coming up very attractively priced. We expect profits to go up to almost Rs 200 crore from the current levels. We also like another stock, Aditya Vision, a company in the retail consumer space based in Bihar and catering to the Hindi heartland. We believe that the stock can easily do 30% upside given that we expect 30% CAGR growth over the next couple of years," says Vinit Bolinjkar, Head of Research, Ventura Securities

Are you waiting for the market to fall a little more or buying this decline already?
The momentum has already been broken and we expect some more downside to follow through. But in this market there are certain stocks in the retail and consumer space that we like. We find the EMI IPO that is coming up very attractively priced. We expect profits to go up to almost Rs 200 crore from the current levels. We also like another stock, Aditya Vision, a company in the retail consumer space based in Bihar and catering to the Hindi heartland. We believe that the stock can easily do 30% upside given that we expect 30% CAGR growth over the next couple of years.

Would you like to just share more details of Aditya Vision?
It is a consumer durable retailer based in the Hindi heartland. They have got close to about 87 of their own stores and are expanding into the Hindi heartland of UP, Chhattisgarh, Jharkhand and also Bengal. Over the next three years, they will be setting up another 75 stores, taking the count to almost 150 plus and in my opinion they currently have about Rs 900 crore of revenue in FY22 and we expect these revenues to climb to Rs 2,200 crores by FY25 and profits which were in the range of Rs 35 crore can touch about Rs 85-86 crore in the same period. So we are expecting a decent upside from these levels over 24 months for a 55 to 60% upside.

Any other such hidden gems that you would want to highlight for our viewers?
I would like to stress on the same industry. The Electronic Mart of India IPO which is coming is very decently priced and they have a similar story. They are based in Andhra and Telangana and the markets of the NCR region and they will also be adding 58 stores to their current 100-110 store network and we expect this stock to be a very steady compounder growing at 20-25% with ROE of upwards of 20%. These stocks should get rerated once they get listed and investors can definitely look to invest in the IPO and also post market on listing.

How much attention should our viewers pay to Credit Suisse news that they are in a spot of bother. Is that going to be incrementally damaging if something comes out or is that something markets are not bothered about?
Markets have taken it mostly into their stride and globally also we have seen the kind of support that the system will offer to keep the status quo going and not disrupt the markets beyond or causing any further damage. I think it is mostly built into price and investors should just not focus too much on it and get on with our markets which are offering some spectacular valuations as they come down because the growth story over the next two to three years is absolutely intact.

This morning, Morgan Stanley initiated a negative watch when it comes to TCS saying that over the next 60 days it is likely to underperform the index and that growth will be a lot better for Infosys versus TCS. How are you approaching the entire IT pack?
We are quite cautious on the IT pack and more so from the performance side, we are cautious because according to our internal models, their valuations are far away from their mean valuations and we expect the trend to continue and barring for HCL Tech, most of the largecap names have still to play catch up in terms of giving away some of the over valuation that has happened.

From this entire retail consumption basket – the likes of Vedant Fashions, Go Fashion, Shoppers Stop, Metro Brands – which are the top bets and which are the areas we should look at in terms of long-term investment strategy?
Vedant Fashion is one stock that we like. It has got far superior margins compared to its peers in the business. It is the festive season and their wedding wear, ethnic wear is doing really well. This is one stock that one should be looking to invest in.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)