SP Tulsian positive on Value Industries

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SP Tulsian positive on Value Industries

SP Tulsian, sptulsian.com is positive on Value Industries.

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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 Value Ind See messages about Value Ind Value Ind BSE | NSE 01/06/12 Are Mutual Funds betting on Value Ind?

SP Tulsian, sptulsian.com is positive on Value Industries .

Tulsian told CNBC-TV18, "Value Industries is in fact a very interesting stock because this is the old company, which was called Videocon Appliances and now the name is Value Industries. They are mainly catering to Videocon Industries by making the white goods components for them. In fact if you see the turnover, the results the company has declared for year-ending September '10, they have posted a topline of close to about Rs 1,400 crore. They have a very low equity with EPS of about Rs 3.50, they have posted a PAT of close to about Rs 14 crore while their paid up equity is just Rs 40 crore. The present book value of the company, after this September 30, 2010 results, the book value is close to about Rs 115 and the share is ruling at price of Rs 30. That means price to book of maybe 0.25."

He further added, "The management has hinted that Videocon Industries or maybe the group may see the restructuring of the company, that is, the flagship company Videocon Industries, in maybe four companies-one for power generation, one for oil and gas exploration, one for telecom and one for white goods etc. So this company could be taken as an independent white goods company and if that happens, this can show us substantial increase in the top-line as well as profitability."

"As of today the company has been given the measured profit margin by the flagship since this is not such a big company for the group, having very low market capitalization of Rs 115-120 crore only, probably this is a big trigger. As I said price to book itself is a positive indication for the stock with topline intact, EPS also if you take the P/E multiple it is ruling at a P/E multiple of less than maybe 8 or something like that. So, I have quite positive view on it."