Orient Press can touch Rs 110-120: Tulsian

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Orient Press can touch Rs 110-120: Tulsian

Orient Press can touch Rs 110-120 in next six-eight months time, 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 Orient Press See messages about Orient Press Orient Press BSE | NSE 29/05/12 Are Mutual Funds betting on Orient Press?

Orient Press can touch Rs 110-120 in next six-eight months time, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Orient Press has been leader especially in the IPO market, printing the share application forms and prospectus. If you see their track record for last 15 years, they have been enjoying that leadership. But six-seven years back, as a measure of diversification they have moved into the packaging business. And that has been bothering this company, in fact that company has eroded the net worth and they created the outstanding debts and the company has to go for onetime settlement with all the lenders."

He further added, "If you see the recently posted performance for nine months ended FY11, the company has posted an EPS of close to about Rs 13 on top-line of Rs 120 crore. Of this Rs 13 EPS, Rs 5.20 paise has come in Q3 alone. If you see the segmental breakup of the printing solutions as well as of the packaging, though both are contributing almost equal to the top-line, but on the bottom-line still printing business has only come on a breakeven level at the EBIT level. Maybe for FY11, the packaging business will not contribute anything, maybe the EBIT could be about Rs 50 lakh to Rs 1 crore."

"Going forward because the management has taken a conscious decision of making this company debt free, they have virtually repaid the entire term loan in this last couple of years and they have the small working capital in the books, which they are also planning to retire and make the company debt free maybe in next six months or so. So, FY12, they will be having the robust or maintained contribution from the printing business and even the packaging business will start contributing to the bottom-line for FY12."

"As I said Rs 12 EPS for nine months of FY11, one can expect EPS of about Rs 15 or maybe Rs 16 for FY11 because the company has not provided any tax because they say that they have the accumulated losses, so they have moved an application also for waiver of the MAT applicability to the company. So, even if I take the minor tax application coming in from FY12, one can expect an EPS for FY12 at about Rs 16-17."

"If you take the present market price, it is ruling at a PE multiple of less than 5 with the packaging and presence in the packaging and printing solutions. So, this looks to be a good stock, maybe one can expect about Rs 110-120 in next six-eight months time."