Nov 08, 2007, 03.12 PM IST | Source: CNBC-TV18

Kilitch Drugs can double from current level: Irani

Mehraboon Irani, Centrum Broking is of the view that Kilitch Drugs can double from current level.

Mehraboon Irani, ., Centrum Broking
Mehraboon Irani , Centrum Broking is of the view that Kilitch Drugs can double from current level.

Irani told CNBC-TV18, "I like Kilitch Drugs because of the new unit, which the company has set up at Himachal Pradesh, which started operations in January and if you look at the numbers over the last two quarters the sharp increase in sales and profit is mainly because of this. Not only contributed in turnover but whole lot of excise benefit and other tax benefit the company gets because of its unit at Himachal Pradesh is very important."

He further added, "The company is presently operating at the new unit at around 25-30% capacity and as the capacity grows the numbers also topline as well as the bottomline should grow. The company presently has equity of around Rs 13.2 crore, promoters own around 70% of that. For the current year, for the first six months the net profit of Rs 5.2 crore I expect to be around Rs 14.5 to 15 crore, which should possibly be more than double when the company operates at nearly 100% capacity and I am looking at the net profit of around Rs 20-30 crore, which gives it an earnings of around Rs 23 to 24 per share for 2008-09. So I think even if we give it a very conservative PE multiple the share should atleast minimum double from here and this would be my script for Diwali."

Disclosures: Analyst holds the above stock.

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