Insecticides India can touch Rs 500: SP Tulsian

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Insecticides India can touch Rs 500: SP Tulsian

Insecticides India can touch Rs 500, 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 Insecticides India See messages about Insecticides India

Insecticides India can touch Rs 500, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Insecticides India is primarily an agri product company. They make agrochemicals, pesticides and home care products. It has a very strong brand and strong presence in the northern market especially UP and Punjab. Since they have plant in Rajasthan and Jammu &Kashmir, they are largely catering to Punjab and UP, where the demand of agrochemicals and pesticides is quite high."

He further added, "It has been consistently posting a growth of 25% in its bottomline, EPS of Rs 25 for FY11 for first six months. They are yet to declare their Q3 results, but for first half they posted an EPS of Rs 20. Generally, the second quarter of the company is always high because in the second quarter people buy pesticides for kharif season. The kharif season gives production of about 55%."

"Going forward, in the third and fourth quarter they should be able to have an EPS of close to about Rs 12-13, while it was Rs 20 for first half. So, I am expecting Rs 32 EPS to move to about Rs 40 for FY13. Their turnover has been quite significant because Rs 425-430 crore turnover in FY11 is likely to get increased to Rs 500 crore. The demand for pesticides has been increasing a lot because of good yield of crops mainly in UP and Punjab."

"So, I am expecting the company to continue to perform well. The promoter stake in the company is to the tune of 75%. The only disliking for this company is that 17-18% stake held by HNIs and 75% by the promoters, so effectively 92-93% of the float has been held. Sometimes this may act as a negative. But because of their strong focus on agrochemicals, I keep a positive view and expect price of about Rs 500 in next 8-10 months time."

Disclosure: I have no personal holding in the above stock.