Difficult for Wockhardt to find sustainable investor interest: Sonam Udasi, IDBI Capital

In in interview with ET Now, Sonam Udasi, Head of Research, IDBI Capital, talks about various stocks and shares his views on sugar stocks, Wockhardt, USL and more. Excerpts:
ET Now: What do we do with sugar stocks?

Sonam Udasi: For sugar, we continue to retain a negative view. The balance sheet problems are far too large and in an election year anything political is not going to win favour. Therefore, it is going to be an uphill task for sugar companies hereafter in an election year. If we have to take risk, we should look at some of the infrastructure names where there is some hope of revival. This is because of CDR and other factors, but for sugar companies, I do not see that.

ET Now: How big a negative could this prove for Wockhardt?

Sonam Udasi: The spate of negative news on Wockhardt has been quite surprising. The stock had a great run for most of the first half. It will be extremely difficult for it to find any sustainable investor interest. Investors are very concerned right now. The bounce back is not going to come back in a hurry. I suspect that for Wockhardt no news is good news. Therefore, if the news flow dies over the next 3-6 months, there could be some hope.

ET Now: What is the view on United Spirits?

Sonam Udasi: If United Spirits is able to take off Whyte & Mackay and monetise it, it will be positive sentimentally and add to their bottom line and also strengthen the balance sheet. However, the valuations are extremely expensive. I find Jubilant cheaper compared to United Spirits and we have a negative view on Jubilant. Therefore, on a fundamental basis, it dos not make sense for investors to get into USL now.

ET Now: From a 1-2 year timeframe, which midcap stock has the potential to become a multibaggar?

Sonam Udasi: TTK Healthcare is a very small cap name. It is entering the contraceptive space and so they have a brand presence there. TTK Healthcare has a stated objective of tripling revenue in four years and quadrupling EBITDA in four years. Therefore, it will be very interesting as the next year comes by and there is a scheme of arrangement or merger going on. The stock has a potential to re-rate significantly.