See 40% return in Shrenuj and Company: SP Tulsian

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See 40% return in Shrenuj and Company: SP Tulsian

See 40% return in Shrenuj and Company, 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 Shrenuj and Co See messages about Shrenuj and Co Shrenuj and Co BSE | NSE 01/06/12 Are Mutual Funds betting on Shrenuj and Co?

See 40% return in Shrenuj and Company , says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "The diamond and diamond jewellery companies have been doing quite well in the last couple of months whether you take the case of Shree Ganesh Jewellery, or maybe Gitanjali Gems and many other players in similar space. The best part about Shrenuj and Company is that about 63% stake is held by the promoter, 13% by 4-5 investors, so 75-76% is held by the promoters and their close associates. The promoters are into this business for last four generations and they have very strong base."

He further added, "If you see the board of the company, is quite strong and quite eminent personalities are on the board but what I feel that FY12 should largely be very good for all these diamond and diamond jewellery units. If you see there has been margin expansion of all these companies. There has been change in product mix. If you see their revenue break-up earlier they use to have more than 50% from diamond trading but now the focus is shifting more on the diamond jewellery."

"They have 8 to 10 brands. They have their own retail outlets; the performance has been quite good. They have already posted a top-line of close to about Rs 1700-1800 crore in the first nine months of FY11, posted an EPS of close to Rs 580 so FY11 should be having an EPS of close to 8. But going forward for FY12 I am expecting that the company should be able to post double digit EPS and if I take that into consideration share is ruling at a PE multiple of 5-5.5, which looks quite reasonable and maybe going forward stock can give a return of 40% in the next one year or so."