Hindustan Motors may move upto Rs 35-40: Tulsian

Tulsian told CNBC-TV18, “Again for the Hindustan Motors, the main trigger is regards to the stake sale by the management. I have heard they have been deliberating to exit from two assets, one is their Chennai car plant which can fetch them about Rs 400 crore or alternatively they are deliberating on selling 49% stake which hold in Avtec. Avtec is an engine and transmission equipments maker and has a very good presence. We don’t have much of the financials but we learnt that this 49% stake can fetch about Rs 400-500 crore and if that happens taking a debt of less than Rs 100 crore in the books of the company because the problem with the company is they do not have the legacy of debt.”

He further added, “If they get out of this 49% stake from Avtec, this can get cash liquidity of about more than Rs 250-300 crore. If you go by the present marketcap, it is close to about Rs 400 crore. Then they are left with their core business of making cars as well as the auto ancillary and they can then take a call on the Chennai car plant also. The company is quite rich if we value all the assets but except for the BIFR problem out and curtailing the current year’s losses, if things happen then the share can move back to close to about Rs 35-40 levels maybe in the next two-three months time.”