GST will have a positive effect on the auto ancillary space: Prakash Diwan

In a chat with ET Now, Prakash Diwan, Director, Altamount Capital Management, shares his views on the auto ancillary space. Edited Excerpts:

ET Now: What about the auto ancillary space? Has your positioning there changed? Are you still recommending the same set of stocks?

Prakash Diwan: There is likely churn that you would see. The top headline makers like Motherson Sumi, Amtek and the Bharat Forges of the world continue to be part of the core portfolio. We have not recommended any profit taking as yet in any of those. We could probably see some addition to long position is smaller companies.
There is a small company called Menon Bearings which we have kind of spotted. Trying to assess whether the growth that they have clocked is something that could continue as a trend. It has done well in the last couple of quarters. So you have these newer companies that are adding up. We are looking at a whole set of new players within the auto ancillary pack which would benefit from the downstream, trickledown effect that this entire up move in the auto space is having. The GST would also be a big game changer for some of them. Of course, it is still a couple of years away but getting geared up for that is the key for some of these players to scale up.