Balmer Lawrie a safe stock for long term: Tater

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Balmer Lawrie a safe stock for long term: Tater

Balmer Lawrie is a very good safe stock from longer term perspective, 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 Balmer Lawrie See messages about Balmer Lawrie

Balmer Lawrie is a very good safe stock from longer term perspective, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Balmer Lawrie is one stock which I feel is a definite warrant that should be a portfolio bet. I have been pushing this stock right from Rs 520 levels and even at Rs 660 I was warranting that yes, it should be a portfolio bet."

He further added, "Now the rational behind this stock is this stock fits the dividend discount model, perhaps one of the traditional model used in valuing the company. The company has been increasing its dividend payout because the business is doing very well and they have been growing at 14-14.5%. They are into business of logistics and also their grease lubrication business, which is doing exceptionally well. Look at its Q1 performance."

"The company has posted an EPS of Rs 26-27, Rs 27.50 to be specific, so for full year we expect an EPS of close to Rs 100. When we actually had gone to project this that the company would be giving you a dividend of Rs 172 to Rs 180 in next five years cumulatively. We actually factored in just 14% growth. The company has already shown a 30% jump. That means that dividend payout can increase further. We have an estimate of Rs 33 for next year in terms of dividend. So the stock is attractively valued at current levels available at 5% dividend yield."

"Going forward the stock is auger to do well and in testing times like this if some one wants to make a portfolio, I think Balmer Lawrie warrants creeping acquisition and it's a very good safe stock from longer term perspective."