Buy Tata Global Beverages for long term: Lalit Thakkar, Angel Broking

In a chat with ET Now, Lalit Thakkar, MD Institution, Angel Broking, shares his views on midcap consumption theme.

ET Now: What about the midcap consumption theme, the likes of a Tata Global Beverages for instance?

Lalit Thakkar: We are liking Tata Global. We feel that this company’s EBITDA margins can improve, it is around 8% or 9%. This company can also deliver 10-13 EBITDA margins. And if that happens, the stocks which are trading at 15-16 PE will starting trading at 11-12 PE. If the earning yields are around 6%-7%, definitely these are the stocks one can be into. At Tata Global, management are very upbeat about the prospect. They are going to start coffee venture with Starbucks and definitely it will contribute also. But, the tea industry is growing by about 2%-3% per annum, so on the top line front it will take some time. So these are the stocks that one can buy, hold for two-three years and then see a very good upside to it. In six months, one cannot very expect very good returns. These are our value stocks and one needs to have patience in these kind of stocks.