Visaka Industries has target of Rs 250: Sethi

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Visaka Industries has target of Rs 250: Sethi

Visaka Industries has target of Rs 250, says Vikas Sethi, MD of Sethi Finmart.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Vikas Sethi See what other Experts & Brokerages are saying about Visaka Ind See messages about Visaka Ind Visaka Ind BSE | NSE 31/05/12 Are Mutual Funds betting on Visaka Ind?

Visaka Industries has target of Rs 250, says Vikas Sethi , MD of Sethi Finmart.

Sethi told CNBC-TV18, "Visaka Industries is the second largest manufacturer of asbestos cement sheets and is also diversified into synthetic blended yarn. This company had recently launched a revolutionary building product in technical collaboration with an Australian company and this product has gained considerable acceptance in the market place and would augur well for the stock. The company has also forayed into power with the plant capacity of around 1,050 MW in the next two-three years."

He further added, "If you look at the fundamentals of the company, the company reported at EPS of Rs 36 for FY10. So at the current market price the stock is growing at less at around 4-5 times FY10 earnings and current marketcap of the stock would be roughly around Rs 265 crore, which is less than half the FY10 sales of around Rs 600 crore."

"From a book value point of view also the stock is trading at just about 1.1 times its book value. As far as the future of this company is concerned, I see very good prospects for the company with the government's thrust on rural housing through its various schemes like Indira Awas Yojana and in addition to this, higher disposable income in the hands of rural India through other schemes like NREGA and the farm loan waiver and the burgeoning Indian middle class would be very positive for this sector in general and the stock in particular. I have a target of Rs 250 in about a year time."

Disclosure: I have investments in the above stock and would have also recommended to my clients and friends.