Bullish on Motherson Sumi, Munjal Showa, Apollo Tyres, JK Tyres: Neeraj Deewan

In a chat with ET Now, Neeraj Deewan, Director, Quantum Securities shares his views on tyre and auto ancillaries space.

ET Now: Have you looked at the tyre companies? Do you like them?

Neeraj Deewan: I had recommended Apollo Tyres couple of months back. I also recommended JK Tyres about two-three weeks back. We are positive on this because the raw material prices are going down. Plus, whatever expansion JK Tyres had done is contributing to their sales. One can seen profitability because of expansion and because the raw material prices are going down.

As far as auto ancillaries are concerned, we have been bullish on Motherson Sumi which has done very well because the European business is doing very well. It started contributing a lot of EBITDA also and the margins are going up.

In the smaller space, we have a small stock like Munjal Showa which is also trading quite cheap at about 4.5 times next year earnings. It is a small company, but they will be re-rating even the small companies where once the market is picking momentum. They will also go more towards 7-8 times.