Shahina Mukadam of IDBI Capital Market is expecting Welspun India to do an EPS of around Rs 11.6 for FY07. It is a good value proposition.

Mukadam told CNBC-TV18, “We are expecting Welspun India to do an EPS of around Rs 11.6 for FY07. Basically the problem in the first quarter was on account of the forex losses that they booked and that is why the profits were lower. But if you see it on an EBITDA basis before accounting for this forex loss it was almost of about 66% YOY higher.”

She further added, “The company is expected to do reasonably well for the full year. The first quarter was impacted on some non-recurring items but for the full year operationally we do believe that the company will continue to do the 64-65% growth that we were talking about earlier.”

“In addition to that a very positive development has happened in the last couple of months wherein they have acquired Christy which really means that from being a pure commodity play the company is now getting right into front part of the operations in Europe. So I think to an extent it also improves the business opportunities for the company.”

“All in all we are expecting them to do an EPS of about 11.6 in FY07, current price discounts it by 6.5 times which we believe reasonably does leave some value on the table for the investors simply because it is a global leader. It is among the top 5 companies, which are in home textiles and the largest towel manufacturing companies in India. So I think it is a good value proposition.”

Disclosure: I don’t hold the above stock.