OnMobile Global has target of Rs 90 in the next 12 months, says PN Vijay, Portfolio Manager.
Vijay told CNBC-TV18, "My reason for optimism on OnMobile is its global operations. It acquired Telefonica, a major producer in Latin America sometime ago, and it took a long time to stabilize that operation. Fortunately these operations have stabilized substantially and they are starting to make money. The company grew by about 20% this quarter and the quarter on quarter run rate was much better than the year on year, which indicates earnings momentum."
"The concerns on OnMobile which investor have is on their domestic business where there seems to be sluggishness, not that the domestic demand is low. For example, applications for smart phones and regular phones are a huge growth opportunity and there are very few big players in this line. Except that some policy issues and some TRAI issues keep coming up, but I feel this is of a temporary nature."
"So at Rs 60, it is trading about 6.5 times 2012 earnings, which to me is very attractive, and I am putting a target of about Rs 90 for OnMobile in the next 12 months. I should say this stock is for high-risk investors because it shows a tremendous volatility in the stock market."
