AIA Engg can touch Rs 550: SP Tulsian

2565 Investors following AIA Engineering. Share this News with them.

0

Like this story, share it with millions of investors on M3

AIA Engg can touch Rs 550: SP Tulsian

SP Tulsian, sptulsian.com is of the view that feels that AIA Engineering can touch Rs 550 in a year’s time.

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about AIA Engineering See messages about AIA Engineering AIA Engineering BSE | NSE 31/05/12 Are Mutual Funds betting on AIA Engineering?

SP Tulsian, sptulsian.com is of the view that feels that AIA Engineering can touch Rs 550 in a year's time.

Tulsian told CNBC-TV18, "AIA Engineering makes hydrometallurgy internal product which are used as a grinding solutions by the cement, mining and thermal based power plants. This is a very critical component used for grinding the raw material whether it is coal or limestone. So they play a very important role. This company has been consistently posting better financial performance and in fact there is no comparative peers available in the market. Because there are one or two closely held companies which are not listed on the stock exchange. So they virtually have a monopoly."

He further added, "If you go by the shareholding pattern 62% of the company stake is held by the promoter and 33% is held by the mutual funds and the FIIs. This 33% has been gradually or marginally been ramped up every quarter which was maybe at about 30-31% a year back has been now increased to 33% leaving very low flow in the market. The company has posted a topline close to about Rs 1200 crore with PAT of Rs 180 crore which translates into an EPS of about Rs 19.50 for FY11. The company is a debt free company. They do not have any debts in their books. I am expecting that for FY12 the company should be able to post an EPS of close to 24. If you take that kind of financial performance share is ruling at a PE Multiple of 16 and as I said that this is a very innovative and monopoly kind of situations. These products traditionally have been enjoying a PE multiple of 22-24. So, I see a good scope in the stock if held with a one year view. But, those who have even a short-term view of maybe about three months can expect a price of Rs 450. But, in a year's time I am expecting share to move to about Rs 550."