See upside in Suprajit Engineering: Tater

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See upside in Suprajit Engineering: Tater

See upside in Suprajit Engineering, says Ashish Tater, Fort Share Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Ashish Tater See what other Experts & Brokerages are saying about Suprajit Eng See messages about Suprajit Eng Suprajit Eng BSE | NSE 01/06/12 Are Mutual Funds betting on Suprajit Eng?

See upside in Suprajit Engineering , says Ashish Tater, Fort Share Broking.

Tater told CNBC-TV18, "Suprajit Engineering is one of the leading players in the cable business and has 60% share in the automotive segment. They provide cable, brakes and other cables to the two-wheeler and four-wheeler industries and have now also forayed into non-automobile segments. Last year, they announced their arrangement with John Deere Commercial Products."

He further added, "If look into its business prospects, the company would clock close to Rs 3.5 to 4 EPS next year and ancillary units with the market leader should trade at least ten times PE multiple forward. That means from a 15 month perspective, the stock should trade somewhere around the Rs 35-40 odd mark. This particular stock was also recommended earlier but due to market carnage it did not achieve our target."

"Another interesting fact is about the subsidiary of the company - Gills Cables Ltd which was bought back for close to Rs 25 crore. We feel that this particular subsidiary itself could be valued around Rs 100 crore in next 15-18 months given their plans. We feel there is a lot of cushion in terms of downside for this particular smallcap stock but there is a potential upside from current levels in the next 12 months."

"The company has been recommended by us even before the stock was ex-bonus and split around the 50-60 mark. A standard caveat is applicable that we have been recommending this stock from a very longer-term perspective into one's portfolio and people should not be jumping into the stock with large volumes because this is relatively illiquid."