'Greaves Cotton can see 25% appreciation in prices'

ET Now caught up with Ajay Parmar, Head - Institutional Research, Emkay Global Financial Services, to get his views on the outlook of Greaves Cotton and Coromandel Fertilisers.

You have a target of Rs 433 on Greaves Cotton and Rs 440 on Coromandel Fertilisers. Greaves Cotton supplies engines to three of the manufacturers, the likes of a Mahindra, Tata Motors and Piaggio. The automobile industry has been showing tremendous growth, in this light, do you expect this stock to perform better and also Coromandel Fertilisers with the Meteorological Department saying that the monsoons are going to arrive very shortly?

About Greaves Cotton, I would say the engine business has been doing well for the last 3-4 quarters and look at the three wheelers, orders from Tata Motors or Mahindra or Piaggio are also recording a double-digit growth. Apart from the engine division, which is more into auto, they are also supplying agriculture engines to the industries and apart from that, there is another division of infrastructure. The infrastructure division is likely to go into black, it is going to be profitable from this quarter. So, there is a tremendous opportunity in companies like Greaves, which has its legs in engines and also into constructions. At Rs 37 of EPS FY12, this is available at 10 times and I believe we can at least have another 25% appreciation in the prices.