Expect Rs 150-155 on PC Jeweller in 6-8 months: Tulsian

Jewellery manufacturer and retailer PC Jeweller will list its equity shares on both the exchanges today. The issue price is fixed at higher end of price band of Rs 125-135 per share for qualified institutional and non-institutional investors while for retail investors it is Rs 130.

Also read: PC Jeweller to debut on Dec 27: Will it list at premium?

SP Tulsian of sptulsian.com, says that PC Jewellers will see a flat listing. The financials of PC Jewellers indicate that it is likely to post a topline of around Rs 4,000 crore for FY13 and they should be able to maintain their net margin of between 7.5-7.6 percent, which will give the company a profit after tax (PAT) of around Rs 300 crore and an EPS of around Rs 70.

Retail issue at Rs 130 per share, translates to a P/E multiple of less than sub-8, but going forward as they will expand their capacity and increase their showroom from 30 to 50.

After considering all these factors, I think this share will rule flat at Rs 130-135. Investors with long term horizon of 6-8 months, can expect a price of Rs 150-155 for this stock.

On the fundamental basis, the stock looks fairly priced at Rs 130-135. An investors need to wait for 6-12 months for an appreciation of 15-20 percent. One important point is to note that speculation cannot be ruled out in stocks of this nature.