Vardhman Textiles can double in two years: Rajen Shah

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Vardhman Textiles can double in two years: Rajen Shah

Vardhman Textiles can double in two years, says Rajen Shah, CIO, Angel Broking.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rajen Shah See what other Experts & Brokerages are saying about Vardhman Text See messages about Vardhman Text Vardhman Text BSE | NSE 31/05/12 Are Mutual Funds betting on Vardhman Text?

Vardhman Textiles can double in two years, says Rajen Shah , CIO, Angel Broking.

Shah told CNBC-TV18, "Vardhman Textiles is a Ludhiana based company and this year is going to be too good for it. It should report about Rs 30 kind of earnings, trading about 160, so it is quoting at less than 6 times the earnings. The interesting story about this company is that besides about 8.25 lakh spindles, it has got a huge fabric manufacturing capacity. Textile business has picked up significantly. I have been speaking to the CFO of this company and the indications are that the textile business is doing pretty well."

He further added, "They have got about 60 acres of land at Ludhiana and the value of that land is about Rs 900 crore, which is equivalent to its market cap. So, getting about 8 lakh spindles huge fabric manufacturing capacity for absolutely free. So this is one stock, which we expect should double in the next two years."

"The second stock which we have been liking for quite a while and in between it had given us fabulous return back to very interesting level is Lakshmi Mills . We had gone to Coimbatore for the investor camp and I happen to meet the MD of Lakshmi Mills. This is a very interesting company. It had four plants in Coimbatore, it shut two plants. Coimbatore Prime is in the heart of the city near the Hotel Residency. They have got about 20 acres of land over there which is about Rs 300 crore. The other unit has which is near the airport where the IT SEZ is coming should fetch them about Rs 100 crore, so Rs 300 + 100 that is 400 it has got about 1,30,000 spindles. Even if you do not consider this 1,30,000 spindles at all because southern textile companies are not doing too well because of the 40% power cut."