EIH has potential to move up, says Tater

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EIH has potential to move up, says Tater

EIH has potential to move up, 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 EIH See messages about EIH

EIH has potential to move up, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "EIH, we have been playing defensive into this midcap sector in fact last time when we discussed about various quarters that our price earning multiple test almost 63 stocks out of 102 stocks that we study have tested its Q1 after breaking down the medium PE and that was the exact reason that we were bearish that market could even go to 4,600 for this fiscal."

He further added, "If I take a call on East India Hotels there are two reasons that makes me feel that the downside seems protected but there is a potential upside a) because of its asset class; if you see they operate in 23 properties and additional 67 properties are going to get additional this year in 2012-13 so the roughly takes the property operation at 30. If I take a replacement call on to this kind of business you cannot find another business with less than 10,000 to 11,000 crore. Second, the business itself is growing, the company has forayed into a interesting business, flight kitchens and we see that there would be much more flights that would be operated in days to come so flight kitchen would be the market flavour, they have invested around 100 crore into the business and I think that would definitely reap benefit to them in future."

"On a conservative EPS estimation of Rs 3.8, the stock looks reasonably valued at current levels and the technical factors that we feel that if there would be substantial fall in the price then ITC or Reliance because Reliance acting as white night through the promoters might go and accumulate stocks further. So from every angle a stock which looks almost reasonably valued and has a potential upside should be bought in this kind of turmoil conditions."

Disclosure: I have no personal holding in the stocks discussed but may have recommended them to clients.