Niraj Cement doesn't deserve more than Rs 100

CNBC-TV18’s Executive Editor, Udayan Mukherjee - Niraj Cement Structurals is completely avoidable one. The issue got subscribed surprisingly so after having initial difficulties but not a single QIB put in an application on the stock.

It is a small construction company and this year they will do sub Rs 100 crore in sales. I don’t think they are going to do a whole lot by way of EPS next year and lucky if they do Rs 7 earnings. At issue price of Rs 190, the issue is hopelessly over priced at 25-26 times. There are much better companies in that space; Sadbhav Engg, C and C Constructions are both bigger, better, cheaper and so there is no need to buy Niraj Cement although first day there is no QIB, its only retail etc. So there could be punting around in that stock.

But all things being equal, the fair value of Niraj Cements Structural is in two digits not in even three-digits. I don’t think it deserves a price of even more that Rs 100.
 
One can have fun for couple of days and scalp some trading games but eventually one would lose money from these levels.