A P Paper luck may not be repeated for other paper companies: Alok Nanavaty

In a chat with ET Now, Alok Nanavaty, Director, Centrum Broking Pvt. Ltd., shares his investment ideas.

Do you think the AP Paper deal would cause re-rating of the paper sector?

To generalise across the board across sectors would be a little difficult. In my view what happens similarly in the pharma pack or now in the case of AP Paper at least happen would not necessarily be true for all sectors and all companies given that there would be certain amount of uniqueness to acquisition targets. So, International Paper is right in paying an entry premium for AP Paper with a size and scale in type of business that they are acquiring, but I do not necessarily believe that it would continuously happen that every transaction would result in a complete re-rating across the board. There may be some amount of upside and premium which one can build into pricing but not necessarily a tremendous premium for all stocks in this sector.