Mar 29, 2012, 10.38 AM | Source: CNBC-TV18
Hyderabad Industries can test Rs 440 in next one year, says Aashish Tater, Head of Research, Fort Share Broking.
Tater told CNBC-TV18, "Hyderabad Industries has got tremendous potential. The basic idea for Hyderabad Industries is that the company is into a sector which is definitely negative because of hazardous concerns globally and thatís why it gets a PE multiple between 3 to 6 times. On quant rate basis that we have been looking into we feel the stock has got limited downside at current level because if you see the structure of the sector itself we feel the weak hands have started giving it to larger players."
He further added, "Their factory on lease basis which is definitely going to create a scarcity premium for the existing capacity and also for large players which would change the ball game. For next fiscal we expect the company would do close to Rs 80 and given the higher PE multiple of 5.5 times the stock can easily go and test that Rs 440 odd mark from next 1 year perspective."
"If you look from dividend yield perspective, the company has been consistently paying you Rs 16 every year that roughly works out to be close to 5%. So this is one stock that should be looked up on any downside from longer term perspective because the stock would dwindle between Rs 260-250 on downside and on higher side it should go and test that Rs 400-450 mark. So one stock where there is a possibility of churning at least twice or thrice in a year which would give tremendous return to people who have the patience to hold and sell at right levels."
Disclosure: No personal holding in the above stock, but may have recommended them to clients.