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.