Kirloskar Electric can test Rs 120-150: Tulsian

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Kirloskar Electric can test Rs 120-150: Tulsian

Kirloskar Electric can test Rs 120-150 in this calendar year, says SP Tulsian of 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 Kirl Electric See messages about Kirl Electric Kirl Electric BSE | NSE 01/06/12 Are Mutual Funds betting on Kirl Electric?

Kirloskar Electric can test Rs 120-150 in this calendar year, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Kirloskar Electric is a capital goods company. If you see their product range, they are catering to practically the entire core sector and they are making the transformer, diesel generator set, capacitor, power control panel, transmission line equipments and recently they have tied up with Nuclear Power Corporation to make motor for the nuclear power projects."

He further added, "Going by the financials they have a topline of close to about Rs 1,200 crore for FY10 and the company has posted an EPS of close to 10 and if I take their marketcap that's low at Rs 350 crore with enterprise value at about Rs 500 crore on a net worth of Rs 175 crore plus. The company has 11 plant located in Maharashtra and Karnataka."

"In the past company sold one of its plants at Bangalore, part of the land and have been able to put their financials in place. So similar situation can happen, I am not taking a call on the real estate value of those 11 plant of which three-four plant can easily get spared land can get monetised but even if I focus on the core sector, the topline of Rs 1,200 crore against enterprise value of Rs 500 crore. Only thing that in the current year for first half they had some margin pressure but I don't think that unless and until if you have your product in place, if you have your topline in place, margins can always get increase or ramped up in due course of time. So taking into consideration the share available at a price to book of 2 and in my view share at Rs 70 looks quite undervalued, it has potential to move to about maybe Rs 120-150 in this calendar year."