May 03, 2012, 10.15 AM IST
Taj GVK can test Rs 100, says Aashish Tater, Fort Share Broking.
Tater told CNBC-TV18, "If you take a call on Taj GVK it’s not only a quantitative call and fundamental call but it’s a structural call from next 3-4 years. Now take a call of a hotel which owns Taj Banjara, Taj Krishna, Taj Begumpet and a hotel in Chennai, in total 5 properties roughly around 1089 rooms and current market cap is Rs 377 crore and Rs 150 crore of debt. So that gives an enterprise value of less than Rs 525 odd crore and if I adjust the cash it roughly works out to be Rs 50 lakh per room or even less than that."
He further added, "Now what has happened in last one year that the stock has actually underperformed. This is because of a geographic specific issue between Andhra Pradesh (AP) and Telengana issue that we all know about and the stock has been punished because of that and which has actually created a lot of issue. But if I take a technical snapshot of this particular stock, we feel the stock would make a double regression bottom around its Rs 48.25 which roughly adjusts the stock will first go to that Rs 48-53 range and from there in next 2 years the stock will be a multi-bagger."
"Now roughly the stock whenever this particular issue is resolved, the AP issue, it will just be a circuit stock on that day for sure. So if someone has got patience of over two years the company will reward its shareholders handsomely. Now take a call from the worst case scenario that even in next one year if nothing happens you stand up to loss nothing because there is a dividend of roughly around 2.5-3% and the stock would be muted between Rs 49-65 on the higher range and the lower range. So given this fact and the area of uncertainty we feel this is one stock which should be bought and accumulated from longer term perspective."
"We still maintain that at least the stock should go and test Rs 100 mark if someone has patience and once the issue is resolved the stock will be a true multi-bagger and even can scale heights of close to Rs 150 mark from next 2.5-3 years perspective."
Disclosure: Safe to assume stocks are recommended to clients but no personal position.
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