Buy Karnataka Bank and Texmaco: Ganesh Shanbhag

Ganesh Shanbhag, SMS Financial Services, in a chat with ET Now talks about Karnataka Bank and Texmaco.

What is the rationale fundamentally for Karnataka Bank and Texmaco?

Karnataka Bank there is no core promoter and we have seen that banking stocks with the banking reforms coming in will see a lot of undercurrent but as of now they have announced a rights issue at a price of around Rs 100, the ratio is yet to come but with no core promoter behind it, it is an acquisition target going forward plus it seems to be not participating in the rally in the last 1-1.5 months. So it looks quite good with a target price of around Rs 200 over a 3-month period. Texmaco is a very novel case. It is a Birla Group company and it has a very good land bank in Delhi. The wagon order book from Indian Railways has been very good. Backed by this, there is a demerger plan that is lined up. Now typically we see that demerger you will get value unlocking happening over a period of time and that is why we like Texmaco with a target of around 200 over a period of 3 months.