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Apr 12, 2012, 10.41 AM IST
Buy McDowell Holdings, says SP Tulsian, sptulsian.com.
Buy McDowell Holdings , says SP Tulsian, sptulsian.com.
Tulsian told CNBC-TV18, "McDowell Holdings can be called as a child of the UB Holdings because this is again a subsidiary of UB Holdings. But if you take the call on the McDowell Holdings the major investments which they are holding is into the United Spirits. They are holding 1.07 crore shares. The value of that is close to about Rs 770 crore at the current market price. I am not including the other investments, which they are holding in their parent company, in their holding company UB Holdings as well as in the Mangalore Chemicals . Mangalore Chemical is on the disinvestment or the stake sale radar. So the value of those two investments works out at Rs 70 crore. So the combined valuation of the investments in the company is about Rs 840 crore."
He further added, "You can take the company as debt free because whatever debt the company has got from the promoter have been converted into the optionally convertible debentures and recently the promoters have converted their debentures into the shares at Rs 140 per share. So company is virtually debt free and as I said that Rs 840 crore portfolio of United Spirits, Mangalore Chemicals and UB Holdings gives a net asset value per share of Rs 625 while the share is ruling at Rs 57."
"We all know that the investment company stocks are ruling at an NAV of anywhere between 25-40% but I have not come across any investment company which rules at a NAV of less than 10%. So I think with the problems of the UB Group likely to get sorted out I have been maintaining my positive view on all the UB Group stock whether you talk of United Spirits , United Breweries ."
"I think that this looks very under priced. I don’t think that under any situation the share can really fall below Rs 50, but if someone can keep a view of about maybe 12 months maybe three digit can really breached maybe in the next six to eight months but I think it is certain that in next one year share can breach three digit mark. So this seems to be a good buy and even yesterday or maybe for last couple of days we have been seeing huge volume getting transacted into the share, so even that will not be a problem for the prospective buyer into the stock."
Disclosure: I have no personal holding in the above stock.
Tags: SP Tulsian, sptulsian.com, McDowell Holdings, UB Holdings, Mangalore Chemicals, United Spirits, United Breweries
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May 22 2013, 10:44
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