Tulsian positive on GM Breweries

Tulsian told CNBC-TV18, "GM Breweries is making country liquor. The bottomline what the company has posted in FY10, they have shown the same kind of performance in H1 and if I take the same trend because they have posted the identical results in Q1 and Q2 so one can easily extrapolate the results to find out FY11 performance, which I expected to be about maybe Rs 225 crore as topline and EPS is likely to be about 23-24."

He further added, "It’s a cash rich company, debt free and the marketcap has been quite low at about Rs 100-110 crore. So if you take the present market price of Rs 120 it translates into a PE multiple of about 5 to 5.5 times while all other brewery stocks in the same category; in the smallcap and midcap, have been ruling in a double digit PE multiple. The kind of growth which is expected from the company in FY11 as I said EPS of 22-23 can get increased to about 27-28 going forward in FY12. So taking this into consideration I don’t think that there is any kind of downside because of the debt free status, high promoter stake of 75%, consistent performance and strong presence. Taking all this into consideration I am quite positive on the stock over next six month period."