Morganite Crucible (India) can test Rs 450: Tulsian

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Morganite Crucible (India) can test Rs 450: Tulsian

Morganite Crucible (India) can test Rs 450, 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 Morganite India See messages about Morganite India

Morganite Crucible (India) can test Rs 450, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Morganite Crucible (India) is a multinational company in which Morgan of UK is holding 75% stake. They are making silicon carbides and clay graphite crucibles. Crucibles are the consumables used as pots for melting metals and largely used in the non-ferrous industries, whether you talk of aluminum, zinc, gold, silver, these are the pots which are used for melting the metal and then making that maybe the alloys or maybe the virgin metal. This is a consumable. So this has a continuous demand in all the plants and all that."

He further added, "If you see the business model of this company, I won't be calling that as a monopoly, but they have very good preference and good market share, but the only problems that the company is a very smaller one. They have a market cap of close to about Rs 100 crore. But the performance if you see for FY11 the company posted an EPS of close to about Rs 20 plus, while the first half EPS has been at Rs 17.50. That means they have been gaining their pricing power."

"I am expecting that company to post an EPS of close to about Rs 35 for the current year and going forward considering the new capacity getting created in the non-ferrous metal industry whether you talk of aluminum, copper, zinc and all sort of things, I think the product demand is likely to continue. Though the stagnation in the top-line is seen for FY12 in spite of that the company has been able to post a bottomline growth of close to about 60%."

"I think that the topline growth is likely in FY13 at about 12% and the bottomline growth may come close to about maybe 20% plus on the FY12 performance. So taking that into consideration 75% stake of the multinational company, I am not playing here as a delisting theme but going forward I think the stock has capability to give Rs 450 in next 12 months time from hereon."