Atul may rally upto Rs 235: Aashish Tater

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Atul may rally upto Rs 235: Aashish Tater

Atul may rally upto Rs 235, says Aashish Tater, Head of Research, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Aashish Tater See what other Experts & Brokerages are saying about Atul See messages about Atul

Atul may rally upto Rs 235, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Atul is one pick that we have been trading through quant modules and we feel going forward also it would go and test that Rs 235 mark that we were boosting for last year also. Where if I take a call from fundamental perspective last year we estimated that the company would do somewhere around Rs 90-98 crore of profit for the full year and for this year our projection goes somewhere between Rs 58-64 crore."

He further added, "What has happened during these last 18 months, the promoter from 41% of its stake has gone up to 50%. This is because they have a hidden asset in their balance sheet. Atul Ltd. has a large chunk of land in Atul where we feel that there could be a part of land monetization which can give them close to Rs 250 crore odd of cash inflow and that might be a reason that the promoter is actually increasing its stake every quarter from 43-46% in March, from 46-50% in last two quarters. Any other increase from current levels would be difficult for this year for this particular company as it would trigger an open offer from promoter's side. So for this year I think the creeping acquisition will end. But if I take this particular call, knockout their cash, cash equivalent investments and loans and advances the company is available at approximately Rs 350 crore odd. And from that Rs 350 crore odd even a PE multiple of 6 because the raw material prices have actually gone up and that's why it's difficult for the company to substantiate even on increasing sales."

"We feel the raw material peak out will happen somewhere in the Quarter 1 of next fiscal and again the company could go and do profit of close to Rs 80-85 crore. With positive news on land development front the company can go and test Rs 300 odd mark and from next 12 month perspective I think the company would again go and test that Rs 235 odd mark based on our projections."

Disclosure: I have no personal holding in any of the stocks discussed, but have recommended them to clients.