Piramal Enterprises may test Rs 4000-5000: Mehraboon Irani

Mehraboon Irani of Gini Gems Consultants told CNBC-TV18, "As far as Piramal Enterprises goes - I remember a month ago I said that if you see uncertainty in the market, try to find out value stocks and I had mentioned Balmer Lawrie, Firstsource, and Take Solutions and all."

"After Lakshmi Machine Works, MRF; Piramal Enterprises is the third company according to me which has the strongest balance sheet. I think equity is just around Rs 34 crore, reserves are over Rs 15,000 crore. The company five or six years ago I think had sold off its domestic formulations business to Abbott and from there now it has become a huge conglomerate with healthcare, financial services, and information management, these three main businesses."

"Now if you look at financial services, which is the main business of this company, there they have a portfolio of around Rs 24,000 crore including investments in Shriram Group and it has stated very clearly it intends to put in more money in Shriram Group."

"The healthcare business over the last seven years has given a CAGR return of around 17 percent and it intends to make it 20 percent going ahead because of debottlenecking, cost cutting, everything. I personally believe with financials of this type, with an earnings per share of Rs 45, with reserves of this kind, Rs 2 face value, the company also according to me should ultimately be demerging its healthcare business and financial services business, therefore bringing down the discount which the company is having because of being a holding company structure."

"All said and done, I think this is a stock because of the balance sheet and because of the ultimate demerger which one day according to me should ultimately happen, this stock according to me has to be around Rs 4,000-5,000 over the next one year. Clear disclosure, I have been holding it and advising our clients to buy into it," he added.