Don’t chase defence stocks, go for intermediaries; 3 chemical stocks to pick: Sanjiv Bhasin

economictimes.indiatimes.com:

Sanjiv Bhasin, Director, IIFL Securities, says: “I cannot advocate buying into defence companies at the current prices. So do not chase them, there is less room for comfort on the valuations. I can see a plethora of other stocks, the intermediaries or insurance plays. I would go with a Max Finance or an HDFC Life, they have corrected recently. And like I said intermediaries, that is insurance, broking, AMC, custodian and exchanges, these are going to be there for the next 20 years or more.”

Three listings are going to happen today. Are any of those companies on your radar or is there anything from primary markets which is on your radar?
Sanjiv Bhasin: I recommended Electro Force last week when the issue opened. It has a profitability of Rs 15 crore on a turnover of Rs 80 crore and it will do Rs 150 crore in this year with a profitability of Rs 35 crore. It is a B2B business and its clientele include Siemens, Schneider. It deals with prototyping, precision metal stamping, tool designing, the entire works of insert moulding and anything to do with that.

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The peer groups of that stock trade at 35 to 40 times. It is trading 25 times at a market cap of 200. can easily be a doubler in the next one year. So, I would ask everyone to definitely have Electro Force in their portfolio. It has been priced at Rs 93. Rs 15 crore goes to the promoter as equity as part of their IPO proceeds. The rest of the 55 crore will go into the business and it is a debt-free business with all