Aunde India can move to Rs 100: Tulsian

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Aunde India can move to Rs 100: Tulsian

Aunde India can move to Rs 100, says SP Tulsian, sptulsian.com.

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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 Aunde India See messages about Aunde India

Aunde India can move to Rs 100, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Aunde India is a Germany company and they are leader in the automobile fabrics and seating systems. This promoter or this foreign company has a trend of holding the 100% stakes in all their companies, but this is probably one of the few companies. They might have two or three collaborations in the world where they are a joint venture partner. Aunde Faze was created by carving it out from Faze Three Exports Ltd maybe about four or five years back. Aunde Germany is holding 43% stake in this company and Faze Three, the Anand family is are holding 43% stake."

He further added, "I don't think the financial performance of the company will look so exciting. Their top-line is close to Rs 150 crore and on equity of Rs 10 crore plus, they are posting an EPS of Rs 3. But having spoken to some big investors or going by the way auto sector is evolving now with more focus on mileage increase and reduction of CO2 emission norms, it is estimated that fabric content in the car which is now at 18-20kg will increase to about 35 kg. So, that will be a big booster for this company."

"This company has the collaboration with Aunde Italy and Aunde Brazil. They have also introduced new type of technical textiles which will be used in the times to come. About 86% stake is held by these two promoters where the foreign promoter holds 43% and the Indian promoter 43%."

"One has to eye this as a delisting candidate, come June 2013 when all promoters have to comply with the shareholding pattern to bring it down to 75%, I don't think that both the promoters are in mood to dilute their stake and go ahead with reduction to 75%. So, obviously they might go for delisting. That 14% stake is not held by any large investors, so it will be very difficult for them to acquire that kind of valuations."

"The indications coming form the management are that they are valuing this company close to about Rs 200-250 per share. At one point of time Indian promoters wanted to dilute their stake in favour of the foreign promoters. Insiders say that they are asking for a price of Rs 200-250 per share."

"But apart from all these things, even if I take a conservative view and if someone can keep a view of 18 months I won't be surprised to see a price of Rs 100. Yesterday, fortunately we saw huge volumes taking place in this counter. Those who are entering into the stock should not look for day to day moment. They must have a time horizon of till June 2013 by which I am expecting share to move to Rs 100."

Disclosure: I have no holding or interest in the above stock.