Buy Elantas Beck: Irani

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Buy Elantas Beck: Irani

Mehraboon Irani, Senior VP-Equity, Centrum Broking is of the view that one can buy Elantas Beck. The company manufactures specialty chemicals for the electrical insulation and other things. It is absolutely debt free; cash of around Rs 46 in the books.

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ALSO READ See previous views by Mehraboon Irani See what other Experts & Brokerages are saying about Elantas Beck See messages about Elantas Beck Elantas Beck BSE | NSE 01/01/70 Are Mutual Funds betting on Elantas Beck?

Mehraboon Irani , Senior VP-Equity, Centrum Broking is of the view that one can buy Elantas Beck .

Irani told CNBC-TV18, "I was holding Elantas Beck India (Schenectady Beck India) years ago and which I had sold off and I was regretting yesterday when I saw the stock go up by about 20%. I don't think it requires any brains to recommend this stock; the stock is Schenectady Beck which is now Elantas Beck. Elantas Beck is a German company which acquired 88.5% of this company; it holds 88.5%, they have sent a notice that they want to delist the shares of the Indian company, the balance 12% is held by many shareholders including one fund which holds around 2% stake."

He further added, "The company manufactures specialty chemicals for the electrical insulation and other things. The most important thing is it is absolutely debt free; cash of around Rs 46 in the books. If you look at the earnings, I think the earnings per share for 2009 calendar year because of the German parent; calendar year it should not be less than around Rs 38-40. Share prices is Rs 360, if you reduce the cash per share then you are getting this valuation at just 7.5 or 8 times. So, I think dirt-cheap, blind buy. This stock has to go up."

"Any foreign major which plans to delist its Indian company suddenly the stock attracts attention and I have admitted it already that this is the stock which I had forgotten it existed till the time the German parent made its move of delisting the shares. Suddenly it attracted attention, people realised that it's dirt-cheap because of poor liquidity. Once upon a time people were not looking at it for the last three-five days, now people started looking at it after this announcement has come through. So if you look at the valuations, the stock should not be less than Rs 500. So people who are trying to buy, I know successfully end up buying are going to end up making money because ultimately the parent will make an offer."