Munjal Auto seems a safe bet: KR Choksey

In a chat with ET Now, KR Choksey, Chairman, KR Choksey Securities, shares his views on various stocks.

Let’s start with your No. 1 stock idea for next 6 months for our viewers.

My first recommendation is Munjal Auto. Munjal Auto is a Hero Group company which is managed by Sudhir Munjal. It is an automobile ancillary company catering mainly to the 2 wheeler industry.

This company’s main products are muffler, second is motorcycle rims and third one is scooter wheels. This company has 3 factories. One at Baroda, second at Haryana and third one is at Haridwar, Uttarakhand. Equity capital of this company is 10 crores.

In the year 2010-2011, this company made a turnover of Rs 521 crores and they made a gross profit of Rs 40 crores and net profit of Rs 25 crores. So on an equity capital of Rs 10 crores, the earning per share was Rs 25.

The company's management believes in rewarding the investors and hence they have declared Rs 7.5 as dividend. In the current year, in the first 9 months, the company has achieved a turnover of Rs 500 crores and gross of Rs 41 crores and net profit of Rs 30 crores. So one can see that the company has achieved more profit than what is achieved in the last full year.