India Motor Parts can test Rs 900, says SP Tulsian

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India Motor Parts can test Rs 900, says SP Tulsian

India Motor Parts and Accessories can test Rs 900 in 12 months time, says SP Tulsian, sptulsian.com.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Ind Motor Parts See messages about Ind Motor Parts

India Motor Parts and Accessories can test Rs 900 in 12 months time, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "India Motor Parts and Accessories belongs to TVS Group and they distribute auto parts and accessories. They have 50 outlets, 50 offices. They market products manufactured by 50 manufacturers to about 35,000 dealers across the country. With this kind of network considering the auto boom and the replacement market, is quite robust and healthy. One should not take this company as a distribution or marketing company."

He further added, "Any ramp up in the product in the topline is giving them a net profit margin of about 6-7%. That is getting indicated from their first half results. They have posted a topline of about Rs 250 crore with a PAT of about Rs 15 crore. This has translated in to an EPS of Rs 35 for first six months."

"Their equity is quite low at about Rs 4.50 crore. Their networth is quite strong at about Rs 155-160 crore, which translates into a book value per share of about Rs 360-370. If one looks at the surplus cash employed by the company, they are holding about 1,390,000 shares in Sundaram Finance."

"The present market value of which is close to Rs 75 crore. Apart from that they have parked Rs 20 crore in liquid mutual funds. They also have some other investments. All this put together comes to about Rs 120 crore against their present market cap of Rs 260-265 crore. But even if we take their pure financials, it has been a consistent performer. The five year growth chart of the company shows that they have been continuously increasing their EPS. Maybe five years back EPS was close to Rs 25-30 and now it might be Rs 70 plus for FY12."

"I won't be surprised to see the company posting an EPS of Rs 100 for FY15 in the next three years. In FY12, the company will have an EPS of Rs 70. So this is a very consistent company with very good performance. The set distribution network across the country gives good comfort. If somebody can keep a view of 12 months then they can look to a price of Rs 900 on the stock."