Midcap best bets-Phillips Carbon Black, Glenmark: Satish Betadpur, Independent Intl Investment Research

Satish Betadpur, CFA, Global Research Director, Independent International Investment Research, takes his picks on the midcap space on an ET Now interaction.

What is your first pick? You seem to be bullish on the entire midcap space.

Satish Betadpur: First stock that we like in midcap universe is Phillips Carbon Black. Carbon black is used in the manufacture of tyres. As we all know that the auto sector is humming and so has been the tyre and the tyre retrofits sector where carbon black is used. Phillips Carbon Black is an RPG Enterprises company and they are at this point a huge value stock given that their multiple is less than four times forward earnings. So this stock can easily re-rate given the growth profile and the sector that they are in. It is a very under-followed stock and therefore, there is not much price action on this. But investors who hold onto this stock or who buy this stock will benefit substantially as the counter gets into the favour.

What is the second stock that you are looking at?

Satish Betadpur: The second stock that we like is in the pharma space i.e. Glenmark Pharma. Glenmark has been an underperformer in the pharma space for quite some time, but they have very nice pipeline of stocks in the US. They have about 50 ANDA filings which will all drive growth in the near to intermediate term. They also have a tie up for dermatology formulations and selling. The other thing is that there will be a US tie-up for their pharmaceuticals business outside their dermatology business. So all of these are catalysts for a stock that is trading at 15 times forward earnings which is an attractive level for a pharma space. So Glenmark is another pick for us.