Bullish on M&M and Bajaj Auto: Prasanth Prabhakaran, IIFL

In a chat with ET Now, Prasanth Prabhakaran, President Retail Broking, IIFL, shares his stock ideas.

What is your take on Bajaj Auto and M&M?

It still continues to be positive. M&M remains proxy for the rural economy play which is there. So, 40% of their earnings come in from the rural side. Their tractor business overall after the good monsoons that we had last year has been pretty good. The balance which is their non-agri side has launches and products which have started doing really well. They have passenger car segment, commercial vehicles and two wheelers that they have entered into.

Also, the Ssangyong tie-up will substantially be able to contribute towards their technology backup that they were short off. They will be able to penetrate the market that they have not been present internationally because of this tie-up. Because of a lot of positives in the sector and for that stock particularly we are bullish on it. Moreover, a lot of their subsidiaries that did really badly over the last few years have started turning around. Overall, when you take some valuations, the stock will end up having an upside of at least a 20-25% from these levels.