Stock recommendations of Ashish Maheshwari Blue Ocean Strategic Advisors

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Pee Vee
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Stock recommendations of Ashish Maheshwari Blue Ocean Strategic Advisors

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Ashish Maheshwari of Blue Ocean Strategic Advisors has recommended investment in GAIL and L&T Finance Holding

My first stock idea is to buy Gas Authority of India or GAIL. This time their Q3 performance was quite robust and net profit went up from Rs 670 odd crore to almost Rs 983 crore. There are two drivers which are leading to this kind of profitability.

First their petchem sales have increased quite a bit. If we see corresponding quarter sales, it was only 94,000 tonnes vis-à-vis almost 1.5 lakh thousand tonnes this quarter.

As far as LPG is concerned, again there is significant capacity addition in sales also which have gone up from almost 6,92,000 tonnes to almost nine lakh plus tonnes.

Another thing is if we see for last few years, their petchem business was not doing well and now petchem is leading the growth of Gas Authority of India. If I see the LDP or HDP sales, there is significant price realisation increase as well as the volumes which have really gone up.

So what is the second stock -- L&T Finance? Why is it that you like it at the current levels?

My next pick is L&T Finance Holdings Ltd. This is a slow mover stock in the entire NBFC rally but now it looks like that momentum is building up. If we see their business model, they have five verticals -- retail finance, housing finance, infrastructure finance, wholesale funding and investment management. If we see last quarterly breakup, almost all businesses are doing pretty well.

Their ROE has also increased from 9% odd to 12% plus which is quite positive and in fact in retail and housing finance, particular businesses are going to be growth drivers for this particular company though margins are declining in wholesale side but this good looking at risk associated with wholesale lending.

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I am expecting that now the rural growth which will come after so many announcements and budget will lead to growth of this particular company and the way two wheeler finance or microfinance or tractor and farm finances picking up in rural India even after demonetisation this is quite positive for L&T Finance Holdings.
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