JBF Industries can move upto Rs 300: Tater

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JBF Industries can move upto Rs 300: Tater

JBF Industries can move upto Rs 300, says Ashish Tater, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Ashish Tater See what other Experts & Brokerages are saying about JBF Industries See messages about JBF Industries JBF Industries BSE | NSE 01/06/12 Are Mutual Funds betting on JBF Industries?

JBF Industries can move upto Rs 300, says Ashish Tater, Fort Share Broking.

Tater told CNBC-TV18, "JBF Industries is a call from our side because we have been bullish into the textile space as a whole. Thanks to cotton prices, we feel there will be further switch into the polyester business. JBF, after Reliance, is the second largest player into the space in India. But before I take a fundamental call into this, I feel there is something hidden into the balance sheet of the company. JBF Industries actually bought shares from Citi, JBF Pte 30% stake at close to USD 104 million last year. That means entire subsidiary of the company is valued at close to Rs 1,200 crore."

He further added, "The company is actually going to list JBF Ras Al Khaimah, a joint venture between the prince of Ras Al Khaimah and JBF Industries, in coming months into Singapore. These two developments make me feel that there is no downside into the stock, but a potential 40-50% upside. Now, if I take a fundamental call into the stock, the company is going to post close to Rs 32-33 EPS on standalone basis. Close to Rs 65-70 in terms of consolidated EPS because it's alliance with Oman oil refinery and other space, I feel this is one stock that will definitely hog limelight. The stock can be seen at Rs 300 level mark from 12 months perspective."

"If I see the entire thing that has shaped out for polyester business itself, the raw material prices have been stagnant, but the billing prices have gone up by 3-4% in the last one quarter itself. This is likely to go up even further. So, a company that is available at Rs 190 having a lot of trading momentum and is into a space, which we are bullish on, textiles as well as the margins are going to be stable for the next 12 to 15 months. We feel that this stock can easily be looked upon from a consolidated front for a target of just a PE of 4-4.5 times. That will translate into a price target of Rs 300."

"There is one company called Polyplex Corporation, which was available at Rs 161-170 levels. But its Singapore subsidiary was worth much more than the marketcap at that point of time. It took three to three-and-a-half years for the company to hog limelight. It touched Rs 1,000 in just three to three-and-a-half years. I am not sure when JBF Pte will actually list in the next five-six months or a years time. But this is one stock that should be bought and on every dip. On a longer term, we feel this stock can be a true multibagger with limited downside potential and a good upside from current levels."