Accumulate Thomas Cook, says Rajesh Agarwal

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Accumulate Thomas Cook, says Rajesh Agarwal

Rajesh Agarwal, Head of Research at Eastern Financiers Limited is of the view that one can accumulate Thomas Cook with a price target of Rs 45 in next 6-9 months.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rajesh Agarwal See what other Experts & Brokerages are saying about Thomas Cook See messages about Thomas Cook

Rajesh Agarwal, Head of Research at Eastern Financiers Limited is of the view that one can accumulate Thomas Cook with a price target of Rs 45 in next 6-9 months.

Agarwal told CNBC-TV18, "Thomas Cook on strong fundamentals drives around 60% of risk revenue from forex business and has a presence in 72 cities in our country, strong parentage, yes the parentage is in deep trouble because of debt and we have seen media reports coming that they are going to exit their Indian business. But the management has clarified that Indian business would not be affected."

He further added, "If I take a call that if parent tries to exit then also it would be an open offer, it would trigger an open offer because the parent holds around 77% on the stock and that would be a huge positive for this stock. On valuation parameters when we compare to another listed peer of this category then we see that this is trading at a huge discount to it. Its trading at a PE of FY13 earnings which we believe is a huge discount."

"One can accumulate this stock with a price target of Rs 45 in the next 6-9 months. For the next two-three months, it would be highly volatile because of news flows and one would be better off taking a trading call by keeping stop losses of around Rs 29 on the stock and carryon position."