Bullish on VST Tillers: S Ranganathan

ET Now spoke to S Ranganathan, Head of Research, LKP, on his stock recommendations.

ET Now: What are your stock picks today?

S. Ranganathan: VST Tillers is one of our preferred midcap bets. Basically it rides on the rural India's farm mechanisation theme. Why we particularly like this is the fact that they have a commanding 40% share in power tillers. Power tillers market is growing at a clip of more than 20%.

ET Now: What exactly is a tiller?

S. Ranganathan: Its basically a substitute for the tractor and it comes at a price which is close to 1 lakh. So in terms of price positioning it is basically a cheaper version and its substitute for a tractor.

ET Now: Where do you see the target price and if you can share some valuations for us as you look at it?

S Ranganathan: Valuations is extremely compelling because they have reported a Rs 50 earnings, the stock trades at about 485. So even on a historical basis its trading at very compelling valuations and we expect a 25% earnings growth over the next couple of years. So very high ROI and extremely robust clean balance sheet and that's our preferred bet on the agri space.