Mayur Uniquoters can move to Rs 500: Tulsian

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Mayur Uniquoters can move to Rs 500: Tulsian

Mayur Uniquoters can move to about Rs 500 in six months, says SP Tulsian, sptulsian.com.

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Mayur Uniquoters can move to about Rs 500 in six months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Mayur Uniquoters makes synthetic leather which is used in the auto seats, footwear and ladies purses. If you see, the company has capacity of about 21 lakh meter per month and they have very reputed customers like Maruti, Honda, Hero, Bajaj Auto, Tata and PIAGGIO. Similar is the case in the footwear space where they are supplying to Bata and Liberty. They are one of the most reputed and preferred supplier of the synthetic leather to all three sectors."

He further added, "If you see the financial performance of the company, if I take the total turnover of this company for nine months it is at Rs 225 crore with PAT of Rs 22.5 crore. That translates into an EPS of close to about Rs 41 per share for nine months. If you see Q3 results, which it announced yesterday, it has posted an EPS of close to about Rs 40. So, one can conveniently expect that the company is likely to post an EPS of Rs 60 for FY12."

"The best part about the company is that they are gradually ramping up their capacity. The capacity was at about 14-15 lakh meter per month maybe about six to eight months back which is now placed at about 20-21 lakh meter per month and more importantly, the company is operating at maybe at 90% plus."

"If you see the financial position, equity is of Rs 5.5 crore, free reserves of Rs 80 crore and of that Rs 40 crore is lying as cash balance with the company. That is the reason for the company's liberal distribution of dividend. For FY12 they have already declared three dividends; first interim was 15%, second interim was 20% and yesterday they have declared third interim of 50%. So, total 85% in the form of three interim dividends have already been paid against 100% of FY11. One can conveniently expect that the final dividend is likely to be about 40% making the total dividend of about 125%."

"This stock I recommended in the month of May 2011 when it was ruling at around Rs 298-300 and post that in two months it moved to Rs 460-470. Then thereafter because of the weakness we have seen in all the midcap or small cap stocks this stock also corrected. But after seeing the Q3 results yesterday, I find the stock to be quite good and attractive at the current level of Rs 380-385. I expect that this stock has the potential to move to about Rs 500 in six months. If one can hold it for a period of maybe 12-18 months, I won't be surprised to see price moving to Rs 650-750."

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