Buy Bombay Burmah around Rs 380-420: Tater

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Buy Bombay Burmah around Rs 380-420: Tater

Aashish Tater, Head of Research, Fort Share Broking is of the view that one can buy Bombay Burmah around Rs 380-420.

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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 Bombay Burmah See messages about Bombay Burmah

Aashish Tater, Head of Research, Fort Share Broking is of the view that one can buy Bombay Burmah around Rs 380-420.

Tater told CNBC-TV18, "We have been recommending that one should be buying Bombay Burmah around Rs 380 to Rs 420 level and should be looking to exit between Rs 480 to Rs 500. In last six months, it has happened already twice or thrice."

He further added, "Taking a call on its balance sheet, it owns 51% in Britannia through its subsidiaries and 14% in Bombay Dyeing , so this is a very significant value to where it is trading right now. These stocks are owned as a relative holding, so it will never come to the markets."

"Even from other perspective, the company has been able to rework and has sold its spring and sunmica division in the last three months. They have been able to realize close to Rs 280 crore from these two deals. The current market cap is around Rs 550 crore."

"From fundamental perspective, the company is now left along with Britannia stake into tea and coffee estates also real estate division in Coimbatore and Mumbai. From that perspective because of market sentiments, the stock would be broadly trading in this particular range. Every time support would come between Rs 350 to Rs 400. So, if one wants to buy 200 shares, then one should go and invest 80 shares at least at current market price and wait for 8% to 10% dip to add on 40 shares. This is because on upside the stock goes and tests that Rs 500 even in six months and at least once one can make 20-25% return."

"The company would give Rs 6 to Rs 8 of dividend that it has been paying for last so many years. From that perspective, if someone is looking for safer bets with strong balance sheet, Bombay Burmah definitely warrants a small investment. One can also add on dips. "