MONSOON PICK: VST TILLERS TRACTORS LTD

INTERESTING STOCK TO WATCH:

VST TILLERS TRACTORS LTD
MCAP: 1600 Odd Crores.
CMP: Around 1920/-
CURRENT P/E: Around 23.
NEGATIVE: Slow Growth.
POSITIVE: Sectoral bullishness

VST is India's largest manufacturer of Power Tillers (Walking Tractors).
VST is also into tractors and has brands such as SHAKTI.
VST is is also into Rice Transplanter, Power Reaper, Engines, Agriculture Implements.

AGRICULTURE stocks should be in focus as this year the monsoon is expected to be normal. The start of the monsoon has also been satisfactory, With MODI govt agenda of doubling the Farmers income by 2022. We can expect good time for Agriculture theme stocks going forward.

If we compare VST against ESCORTS, VST has better margins, slower growth and better valuation at CMP. ESCORTS with lower margins, turnaround play is at a P/E of 50+ which is more than double of what VST is presently hovering at.

If we look at VST monthly chart, you would notice every year since 2009 except once or twice the Stock has rallied in the month of June or July. Sometimes there are modest rallies of 8-10% sometimes mega rallies of 30-40%. I believe this year with everyone gung ho on Monsoon and market in the bulls grip. VST may be a good opportunity to buy and hold for a month or two.

Take a look at their website: http://www.vsttillers.com/

Technically there is a cup and handle breakout on the monthly charts for the stock above 2060 levels.

Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i might have VST TILLERS TRACTORS LTD in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.

UPDATES: B&A LTD, THE MANDHANA RETAIL VENTURES LTD.

First of all, apologies for delayed update.
I met with a mishap at the gym last week and fractured my knee cap and now on bed rest and pain killers.
Results for both B&A LTD and TMRVL (The Mandhana Retail Ventures Ltd) came out in the meantime.

B&A LTD: like all other tea companies has given negative results this year, which is contrary to my expectations.
The stock had moved from 200 to 355 and is again available around 200 now. Even though results are bad I don't think it is any different from other tea companies, I still believe that the TEA sector can give big movements this year. The tea price trend has to translate into earnings even though it is not happening just yet. But that is how TEA as a sector is, It is known to test your patience a lot.

People who have patience should hold and freshers can also consider entering at these levels. At 60 crore market cap it does look undervalued.

THE MANDHANA RETAIL VENTURES LTD: For the march quarter suddenly TMRVL posted losses, and the stock has corrected enough to price in bad numbers. As of now it is not known what could have caused the company to suddenly report losses. Whether any operational changes or transition caused one off or whether the company failed to realize profits in normal business remains a question. Given the full year numbers, TMRVL remains very cheap compared to all other peers in the branded clothing sector. The news of 18% GST on branded clothing got a lot of hype and that has pushed the stock lower too. It seems the stock has now found some support near 150 levels and should start journey for a recovery.