Shah told CNBC-TV18, "Shrenuj and Company is a very interesting company and if you want to buy diamonds at the price of stone then this is a company one needs to look at. This is a Mumbai based company, into Diamonds and Jewellery business. It is currently present in about 13 countries and has got an annual turnover of Rs 1,500 crore but just has a market cap of about Rs 266 crore."
He further added, "The company recently bagged 16 licenses from the Government of Botswana for procuring rough diamonds and I think this is going to lead to a substantial re-rating of their margins which are currently at about 3%. The margins are expected to improve substantially in the coming years. Now because of the procurement of these licenses the company has set a very ambitious target and the current turnover of Rs 1,500 crore is likely to touch 1 million dollars in about four years. I am talking about a CAGR growth of almost 25% annually for the next 4-5 years, so the bottom-line growth is also likely to be spectacular."
"For next year we are expecting almost about Rs 10 kind of earnings and trading at just about four times the stock certainly looks very interesting. Last time when the Sensex was at 18,000 this stock was at Rs 70 and today despite reporting higher profits than that of 2009 and 2008 the stock is still highly undervalued. So we expect the stock to touch atleast Rs 70 in the next 12 months."
