Tater's multibaggers: Oracle Financial, Siemens India

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Tater's multibaggers: Oracle Financial, Siemens India

Aashish Tater, head of research, Fort Share Broking selected Oracle Financial Services and Siemens India as multibagger stock picks for the day.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

Aashish Tater, head of research, Fort Share Broking selected Oracle Financial Services and Siemens India as multibagger stock picks for the day.

Tater sees huge potential for Oracle on the upside. He expects the stock to get delisted around Rs 3,000 or even more if the company makes an open offer.

He sees limited downside in Siemens India. Tater finds this stock as a good portfolio bet and a good long term bet.

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

On Oracle Financial Services

Last time, I was not bullish on Oracle that this is one delisting candidate because at that point of time my quant model was not pointing that this has a probability to de-list or make an open offer. Last week I came across few of developments company's parent has done. They are paying annualized equivalent value of less than 13% to acquire companies in the cloud CRM space. I was looking at analyst reports of the parent and they have valued the company at 3.2 times price to book stating that fundamentally the stock should go and test 4.5 times book. From delisting perspective, the parent owns approximately 80% but what has significantly changed in last six months is the probability of delisting which is close to 55% which was not even 35% last time when we spoke about it. So, from that angle, this stock which has got tremendous potential.

Now take a call as to what should be the price for this company if it comes for delisting. The company would sit on a book value of close to Rs 730. Incidentally, with Rs 730, multiply it by 3.2 times and add that premium of delisting, it should be somewhere around Rs 2,860 on conservative side. At Rs 1,850 it made a very interesting technical bottom which was visible even in Atlas Copco. We resurfaced it and we saw that Rs 1,800 was not getting broken even on intraday basis. So, this is a clear pattern and we feel this stock has got tremendous potential on upside.

Even on fundamental basis, the stock is trading at a PE multiple of 17-18 odd times. But going forward, the stock has potential to get re-rated above the industry PE average of 21 times. From every angle one can buy this stock, fundamentally, delisting perspective or even technically from short term perspective. A thumbs up for the stock for a medium term target of Rs 2,860. We expect this particular stock to get delisted somewhere around Rs 3,000 or even more if the company makes an open offer.

On Siemens India

Siemens is one stock where we feel there is a technical uptrend, a good portfolio bet and even an angle of parent. The parent recently bought company at Rs 930 a share when the rupee-dollar equation was at Rs 45. Why I like this particular story, Siemens is not that it is a delisting target, but generally the parent whether it is from Germany, US or France - they tend to give two years forward earnings in order to squeeze their shareholding pattern. This means from two years perspective the parent felt that the fair value for the stock could be anywhere around that USD 21-22 mark.

So, from that angle on conservative side if you re-impose the rupee dollar equation, we feel the stock from next 24 months perspective should be available at Rs 1,100. From institutional perspective, they tendered at Rs 930 a share and  they would again be interested in buying this particular company because this is one company with great parentage. The stock made a technical W which is a double bottom around that Rs 650 mark. This is one stock where the downside is limited, potential upside, a good portfolio bet and a good long term bet so a buy from our side.