Find out: Tater picks 2 hot buys for your portfolio

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Find out: Tater picks 2 hot buys for your portfolio

Backed on pure business model, Aashish Tater, head of research at Fort Share Broking picks Arshiya International and Indraprasth Medical. He recommends a buy on dips from a long term perspective, for both stocks, looking forward at the potential of the innovative business structure.

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Backed on pure business model, Aashish Tater, head of research at Fort Share Broking picks Arshiya International and Indraprastha Medical . He recommends a buy on dips from a long term perspective, for both stocks, looking forward at the potential of the innovative business structure.

"I am bullish on logistics business, and Arshiya International has a potential of the business model and single digit PE multiple, it is a safe bet, a quality stock wit return of 10-25% for three years," he says.

Tater says the booming medical tourism business is going to benefit Indraprasth Medical. The company's impending concept of 'mini hospitals' to treat emergency patients operated at parent company. Apollo Hospitals, Tater says can be the next big thing. "If one puts in their money in this stock, within a period of 2-2.5 years it can double up," he added.

Below is an edited transcript of Aashish Tater's comments. Also watch the accompanying video.

On Arshiya International

Arshiya International is not a buy at the present Rs 120-125 mark but it is a buy somewhere around Rs 105. Taking a call from business perspective, in terms of price at Rs 105 it would be available at the market cap of Rs 640-650 odd crore. It is into a business called logistics and we have been bullish on it for quite some time now.

If I take a call on Arshiya at around Rs 105, it will do a net profit close to Rs 84 crore though the management pointed out Rs 90 crore. We have taken an interest impact of Rs 6 crore because of rising interest rate. On Rs 84 crore and a market cap of Rs 650 crore it is available at a PE of 8 times. This is going to be a cash cow for the company - the free trade and warehousing loan which the company is operating at Panvel and another one will be coming up in Khurja and soon to follow somewhere in Nashik.

So, given the potential of the company, it has a unique business model and would be available at a single digit multiple, and this warrants immediate attention once it comes to that Rs 100-105 odd mark. From a longer term perspective, this is a portfolio bet for people, who are looking for safe bets, quality stocks for return of 22-25% year on year from three years perspective. Also, their railway signalling business contributes almost 20% to their business, this stock is definitely a buy on dips from a longer-term zone.

On Indraprastha Medical

Due to the market carnage, medical tourism is going to grow. And, Indraprastha Medical is definitely going to be beneficiary. Taking a call from fundamental perspective this particular company is having a parentage both from government and also from Apollo Hospital .

The market cap to sales ratio is interesting for the stock. If you look at the company from two years perspective, they would do somewhere around Rs 720 odd crore, in terms of topline and would do that 7% net profit margin.

Apollo hospital, on other hand trades almost two times its market cap to sales. Now, taking a call on this smaller version of Apollo Hospital, from a longer-term perspective the management has chalked out an interesting plan. They will come up with mini-satellites that is what they call as mini hospitals, which will provide patients with post operational services and will add to the bottom-line, significantly.

They have right now chalked out close to 10 mini-hospitals or min-clinics which can provide these kinds of emergency services for patients who have already been treated to Apollo clinics. So, this is going to be a concept of future when the parent company will be doing very well because of its strong hold into its business and because of its ancillary services this stock would be re-rated.

From a two years perspective, the market cap to sales ratio would be hovering somewhere around 0.8 times. If one looks at the dividend yield, it is right now available at 5.5 % dividend yield.

Apollo Group Company is available at less than 1% dividend yield but its holding has a dividend yield of 5.5%. There is hardly any downside on to the stock. However, if someone has patience to hold it for two and two and half years, his money can double in this timeframe because of the unique business model that the company is coming up with. Ten mini hospitals can do revenue of close to Rs 18 crore in FY13 and the potential of these mini-satellites is up to 50 mini clinics across the NCR Region. If the model becomes extremely successful, this will be rolled out pan India across Apollo Group Hospitals.