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Mar 09, 2012, 10.49 AM IST
Vesuvius India is a portfolio bet from next two to three years perspective, says Aashish Tater, Head of Research, Fort Share Broking.
Tater told CNBC-TV18, "Vesuvius India is a stock on which we have been bullish on for almost three years. We still feel this stock has potential to scale new highs in days to come, but one should have a portfolio bet from next two to three years perspective."
He further added, "The company pattern in terms of topline and bottomline growth shows that the company has been growing at a CAGR of close to 30%. But after growing 40-50% in a year takes a rest and gives a flat year-on-year number and again it starts its journey in terms of topline and bottomline. In this particular year also the same story has happened. For the next year, we expect it to do close to Rs 38 in terms of EPS and given the group parentage Cookson Group, this is going to be a very good development."
"The parent group Cookson has been shutting down its operations in France and other places. There has been gradual shift in Czech Republic, Poland, India and China though their subsidiaries. Cookson is basically raising order at individual capacity and giving those orders to be processed at subsidiary level. India so far has not been able to take a large chunk because there are some problems, but those will eventually settle down."
"So, we feel that next year would be very good for the company. It would show a topline growth of at least 25-28% and given the similar margin, it would do EPS of close to Rs 37-38. Considering all this, even from annualized equivalent value perspective this stock is relatively undervalued to its subsidiary levels."
"It is a difficult call right now that the company would delist this because there is 55-56% only that the parent owns. So, from longer term perspective this could be a stock where there will be lot of potentials in terms of growth. The company might even go for delisting say from next two years perspective."
Disclosure: It is safe to assume that the stock discussed may be recommended to the clients. No personal holding.
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