Prefer JK Tyre, Ahmednagar Forgings among auto ancillary stocks: Neeraj Deewan

In a chat with ET Now, Neeraj Deewan, Director, Quantum Securities, shares his view on auto ancillary stocks.

ET Now: I do not know if you are looking at auto component sector, but there are a bunch of reports, suggesting that the capacity additions by auto component makers will augur well for them. There are positive predictions about what their earnings compound annual growth rate (CAGR) could be for the next three years. Have you looked at Ramkrishna Forgings or, for that matter, any other auto component company recently that has attracted you?

Neeraj Deewan: We have a coverage on some of the companies in the sector like Ahmednagar Forgings. It is one of the companies on which we are very bullish on. Then, there are tyre companies like JK Tyre which should do well after the recent correction.

I like Shivam Autotech, a Hero group company. This company has a dedicated facility to cater to Bosch which will account for almost 25 per cent of company's total turnover, going ahead. At present, the company generates 5 per cent of its revenues from the facility. So, we have a bullish view on Shivam Autotech and that is one small company which we have recently covered in auto ancillary space.