Alfred Herbert has price target of Rs 250-300: Chugh

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Chugh told CNBC-TV18, "Alfred Herbert is an engineering company. It manufactures engineering machinery for rubber process and tyre manufacturers. This is a small cap stock with a market cap of Rs 13 crore (Rs 130 million) and equity base of just about Rs 77 lakhs. On this equity base the company does a turnover close to Rs 23 crore (Rs 230 million) and makes a profit of around Rs 80 lakhs, which is an EPS of more than Rs 10. It has paid a dividend of 10% this year. The dividend payout is less but the company has got a lot of value in the form of cash and equities, which it holds."

Further he added, "The main concern in the stock is liquidity. When somebody buy 5000 shares the stock hits upper circuit and same is the case when 2000-3000 shares are sold. It is for the investors who can buy the stock and not worry about the price going down. Somebody who has the capacity to hold then hold on to it for couple of years. It is difficult to give a price target but fair valuation should be about Rs 250-300."