Sandesh can touch Rs 390 within six to eight months, says Aashish Tater, Head of Research, Fort Share Broking.
Tater told CNBC-TV18, "We are taking a very conservative call because we want to protect the investor from the perspective that your capital is safe and the returns expected would be 20-25% year-on-year. Sandesh Limited is having a market cap of Rs 220 crore."
He further added, "The company is sitting on a cash equivalent after adjusting debt of close to Rs 180 crore, which is cash and cash equivalent and loans and advances given to promoter group company. The company is sitting on almost one-year forward cash equivalent because the company is generating close to Rs 45-50 crore of free cash flow, post adjusting for dividend pay out."
"From one year perspective, you are getting a company which is the second leader in Gujarat-based Samachar Patrika, and you are getting a business almost free of cost which has four manufacturing units - Rajkot, Bhavnagar and other places in Gujarat."
"Here is a company where the downside is limited, but there are potential upsides. If I try to map on valuation perspective, we had a target of Rs 350 from last year and we still maintain that the Rs 350-390 should be tested within six to eight months. If sentiment improves, there should be more lookout for those defensives type of picks into the sector."
