Investment Advisor, SP Tulsian feels that Wheels India can test about Rs 315 in the next 6 to 8 months time.
Tulsian told CNBC-TV18, "Wheels India is a TVS Group company and they are the auto component company largely sourcing the steel wheels for commercial vehicles, cars, tractors and other agricultural equipments. They have a robust business model. They have the consistent performance."
He further added, "The top-line is close to about Rs 1700 crore and if you take their bottom-line that has been quite good with EPS of about Rs 25 and the share is ruling at a PE multiple close to about 7 or 8. Since the TVS Group is holding about 84-85% stake in the company probably there could be a de-listing move or there could be some restructuring move by the company."
"Going by the financial performance for FY11 where the bottom-line has improved by 80 to 100%, I think the momentum is going to be very good for the company. The company should be able to post an EPS of Rs 30 for FY12 that translates into a PE multiple of close to about 8. Even on a price to book parameters also the share is ruling quite well."
"With a sizeable turnover close to about Rs 1700 crore on top-line FY12 should be able to post a top-line of Rs 2100-2200 crore. So taking these into consideration it looks to be a very safe stock. One can expect a price of about Rs 315 in the next 6 to 8 months time."
