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Positive on QSR, speciality chemicals; wary on Barbeque Nation: Nirmal Bang’s Girish Pai

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Positive on QSR, speciality chemicals; wary on Barbeque Nation: Nirmal Bang’s Girish Pai

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Girish Pai, Head of Research at Nirmal Bang Institutional Equities, on Thursday said that he was wary on Barbeque Nation as they are not keen on casual dining side. Pai has a positive view on the speciality chemicals segment from a medium to long term perspective.

Girish Pai, Head of Research at Nirmal Bang Institutional Equities, on Thursday said that he was wary on Barbeque Nation as they are not keen on casual dining side.
"We are more inclined towards the QSR side where there is more delivery and that is going to lead to higher asset turnover. So, that is a space we have liked. So Jubilant Foodworks and Westlife we have an accumulate rating right now. We did put out a non-rated note on Barbeque Nation, but as things stand, we are not keen on the casual dining side because we think that the asset turn could be a little bit more challenged in that space going forward,” he said in an interview to CNBC-TV18.
Pai has a positive view on the speciality chemicals segment from a medium to long term perspective.
“The stock we like here in the midcap space is Navin Fluorine. While valuations look a little challenging from a multiple standpoint, it is probably one of the most expensive speciality chemical stock, but from a medium to longer term stand point we think there are a lot of triggers out there, especially the ones connected with CRAMS. So, we are fairly bullish on Navin Fluorine,” he said.
He is neutral on the IT services sector and said that they are extremely stock specific here.
“If you look at the growth between FY15 and FY20, tier I names like TCS, Infosys, HCL Technologies, delivered a 6-8 percent kind of revenue CAGR and 7-8 percent kind of earnings CAGR over that 5 year timeframe. We think that from here on, from FY21 to FY23, growth could be anywhere between 12-15 percent for some of these companies. There is a step up in revenue growth, there is a step up in earnings growth, but having said that valuations have moved up to levels which are almost like 10-12 year peaks. So, right now we are neutral on the sector. We are very stock specific here,” he said.
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