Buy Oracle Financial: Aashish Tater

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Buy Oracle Financial: Aashish Tater

Buy Oracle Financial Services, 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 Oracle Financ See messages about Oracle Financ

Buy Oracle Financial Services , says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "If you recall last time when we talked about Oracle, I was not bullish that this is one delisting candidate because at that point of time my quant model was not pointing that this has a probability to actually go and de-list or even company making an open offer. Last week only I was reading about few of the developments that the company's parent has done. They are paying annualized equivalent value of less than 13% to acquire companies in the cloud CRM space."

He further added, "I was looking at analyst reports available of the parent where they have valued the company at 3.2 times price to book stating that fundamentally the stock should go and test 4.5 times book. Now take a call from delisting perspective. The parent owns approximately 80% but what has significantly changed in last six months is the
probability of delisting, which is close to 55% which was not even 35% last time when we actually had talked about, so from that angle I think this is one stock which has got tremendous potential."

"Now take a call that what should be the price for this particular company if it comes for delisting. The company would sit on a book value of close to Rs 730. Incidentally with Rs 730, you multiply it by 3.2 times and at that premium of delisting, it should be somewhere around Rs 2860 on conservative side. At Rs 1850 it made a very interesting technical bottom which was visible even in Atlas Copco. We resurfaced it and we saw that Rs 1800 was not getting broken even on intraday basis. So this is a clear pattern and we feel this stock has got tremendous potential on upside."

"If I take even a fundamental call, the stock is trading at a PE multiple of 17-18 odd times. But going forward the stock has potential to get re-rated above industry PE average of 21 times. So from every angle this is one stock you can buy. Fundamentally, delisting perspective or even technically from short term perspective. The stock has medium term target of Rs 2860. We expect this particular stock to get delisted somewhere around Rs 3000 or even more if the company makes an open offer."