Jul 16, 2012, 06.32 PM | Source: CNBC-TV18
SP Tulsian, sptulsian.com advice traders to exit from AP Paper Mills and re-enter around Rs 260-275 levels.
SP Tulsian (more)
CEO, sptulsian.com | Capital Expertise: Equity - Fundamental ,IPO
Tulsian told CNBC-TV18, “Considering the Q4 results of AP Paper, we thought that probably they are on a turnaround path, but again looking to the Q1 results its really very bad or very disappointing results because sometimes on the change of the management you do see the change of management or the profitability taking a hit because it is generally felt that the previous managements were not taking into account the rights of the inventory, of book debts and all that business gets changed, but the new management whenever comes in they go for a massive write off in a books, they clean the books of accounts.”
He further added, “People felt that the two results, though we have seen the three quarter results happening after the take over and this has been the fourth results, but sometimes you feel that probably FY13 was expected to be good, but as such as I have been maintaining my negative view on the paper stocks, but the kind of results having posted by the company are really horrible. So, probably you feel that the turnaround maybe not happen immediately in the next couple of quarters as well. You don’t see the light at the end of the tunnel. What we are only talking of the delisting move or sometimes people talk of the raising the open offer price, but sometimes I wonder there also that- suppose even if the open offer price for which the SAT has given an order of Rs 130 non-compete fees to be having deposited by the company in the escrow account, suppose even if that is allowed, so that will go to the shareholders those who have already tendered the share.”
“Sometimes I don’t understand the logic because last week I heard the expert saying that because of the increase in the open offer price shares are moving, but that will only happen that’s a old event that’s a history. Those who have tendered the shares will get additional Rs 130 share, but there has been some hopes that since 75% stake is held by the promoters now probably they will go for the complete delisting and since last time the open offer has come at Rs 550, this time the delisting may happen at Rs 350-400 and all sort of things, so that’s the only hope. So, naturally considering the Q1 results as of now, which as I said that I won’t be too gung-ho on this open offer kind of issues. Definitely, one should exit from the stock and can look to re-enter maybe at a level of Rs 260-275.”