Buy Tata Coffee, says Tulsian

Tulsian told CNBC-TV18, "I am giving a buy call on Tata Coffee with a price target of Rs 1,200 maybe in six-eight months. If you see the features of the company, this is the largest integrated tea-coffee plantation company in the world with 19 coffee estates and seven tea estates. If you break-up the results, Rs 275 crore topline has come from the global operations and about Rs 138 crore profit after tax (PAT) has come from the domestic operations."

He further added, "If you see the earning per share (EPS) of Rs 15 and the absolute number of PAT of about Rs 32 crore, Rs 24 crore has come from the Indian operations and Rs 8 crore has come from the global operations, Eight O'Clock Coffee. That means Eight O'Clock Coffee has turnover of global to ratio of the top-line is 2:1, while the bottom-line ratio by the global and Indian is 1:6. I am expecting Eight O'Clock Coffee to catch on. That is not contributing much to the bottomline. If you see on a comparable basis also, the EPS has moved from Rs 7 in Q1 of FY12 to EPS of Rs 15 in Q1 of FY13. So, much improvement is likely to be seen in case of Eight O'Clock Coffee in the time to come."

"Coffee market globally has been quite firm and that is keeping this stock quite alive. Taking all this into consideration, I am quite bullish. You can call it a high-beta stock. I am expecting now that with this result, it will come in the trajectory of four digit mark and then gradually move to about Rs 1,200 in six-eight months."

Disclosure: I have no personal holding in the above stock.