Multibagger ideas: Tater picks Wabco, BOC India

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Multibagger ideas: Tater picks Wabco, BOC India

Aashish Tater, head of research at Fort Share Broking shares his multibagger ideas on CNBC-TV18. He analyses Wabco and BOC India his targets for both these stocks.

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Aashish Tater, head of research at Fort Share Broking shares his multibagger ideas on CNBC-TV18. He analyses Wabco and BOC India his targets for both these stocks.

Below is the edited transcript of Tater's interview with CNBC-TV18. Also watch the accompanying video.

On Wabco

Wabco is a portfolio bet. It is not a stock, which will give 50-70% return year on year but it is a stable stock that should definitely be a portfolio bet from longer-term perspective. It is for someone looking to take a return of 20%, year on year from next three-four years perspective. The stock had coverage even last year from our side, when it was hovering around Rs 1,120 mark. We had a target of close to Rs 1,400. We still maintain at even at Rs 1,400 we will take a 20% call for next year. Its current price is around Rs 1,300-1,350.

Taking a fundamental call, I see a bottomline of close to Rs 173 crore to Rs 185 crore for next fiscal. The stock would be hovering around a market cap of Rs 3,000 crore. Currently, its market cap is Rs 2,500 crore, which is18-20% upside from current levels. Their service clientele comprises of top manufacturers, original equipment manufacturers across the world.
We have seen what is happening globally, all the premium players whenever there is a problem with the company they go and buy this company at a fair valuation.

I was reading about similar kind of stories and they got it booked at almost three times price to sales ratio. I feel that the fair value for the stock is at least Rs 1,750 from next one year perspective. So, there is a good chance of 25-30% return from one year's perspective. Almost 75% is owned by promoters so there is hardly any float left. So, even from that angle there would be good interest into the stock on any downside.

On BOC India

A: We have been pushing this stock right from Rs 220 because we felt that people are looking at trailing PE, but if looks into the earning potential of the business the stock was trading at mouth-watering levels. Looking at its stellar performance, for this quarter it delivered an EPS of Rs 5 and we are working with Rs 20 for next fiscal in terms of earnings per share.

My own calculation on the stock was that annualised equivalent value should be around 13-14%. If the company moves for delisting which it eventually will, it should get at least Rs 500 on the stock when it comes to delisting. The idea here is that if you want to invest, invest like an Indian investor, so you are comfortable investing in this particular stock around Rs 330 odd mark.

Last year's base was Rs 270; we have shifted the base to Rs 330 for this year. When you are trying to tender the shares look from foreign partner's perspective, where they would be easily paying 25 PE multiple. That can get stretched to 30-33 times because there is hardly any float into the market and I don't think Linde would mind paying that extra buck for this particular stock. This is a safe stock, which can give you still 50-60% return over next one year.