Timex and Parsvnath Dev offer good value: Aashish Tater

Aashish Tater, Head of Research, Fort Share Broking, joins CNBC-TV18 to give a few multi-bagger ideas.

Buoyed by great brand value and lifestyle segment being in the limelight this season, Timex is a great pick, he says. The stock is up for a re-rating shortly and on the longer-term of 18-24 months, it is likely to return very well, he says.
Parsvnath Developers is another great pick. With a net debt-equity of 0.6 and expected exponential growth in the company through project and lease-rental realisations, the company is geared to be debt free by 2014 itself, Tater says. That makes it an attractive stock to own now. Also watch the accompanying video On Timex
This particular decade belongs to lifestyle products and brands. Timex is a perfect combination of both. Nautica, Salvatore, Ferragamo, along with arrangements with Versace and Versus offer great brand recognition.
Looking into the numbers for this year, the company posted an EPS of Re 1. This is significantly higher than our estimates of 83 paise. These MNCs, once they start growing at 25%-30% year-on-year in terms of top-line, significant increase in bottom-line automatically follows. Timex is one such company with a great potential to grow exponentially here on.
Fundamentally, the stock will do just Rs 2.50 one year down the line, but the real story starts once these brands turn into lifestyle necessities for Indian youth and salaried people. Even though there are quite a few brands in this space, Timex is bound to see a significant valuation re-rating once the business takes off. The low float available in the market and a PE multiple on the conservative side makes it very attractive.
The stock is expected to stabilize around Rs 35-40 mark once delisting or something like that happens in 2013-2014. That is our longer term projection. The stock can even go to Rs 100 from there on. So at Rs 40, what I suggest is, buy a small quantity from a longer term horizon rather than buying a chunk and waiting to trade into it. This stock is relatively illiquid now, but this is one brand that can become a portfolio bet from a longer term perspective, say, in 18 to 24 months. On Parsvnath
We have been looking at companies in the real estate sector who have lesser debt burden. Parsvanath is attractive from that perspective. The promoter, recently, pointed out that 0.6 is the net debt equity ratio for the company apart from the fact that the company has been focused on repaying debt even in this high interest scenario. Parsvnath has been trying to raise funds at specific levels. They have got a good set of investor like Red Fort Capital and JP Morgan along with other players such as Sun Apollo who have taken an interest in their projects.
Also, the Floor Space Index (FSI) rule has actually changed the overall valuation game. From 2.3 FSI to 3.45 FSI into couple of projects is expected for Parsvnath. With a project like La Tropicana which is a very prestigious project, the company is expected to generate cash which is more than the current enterprise value pegged at Rs 3100 crore.
Their lease rentals from 2-3 projects will be to the tune of Rs 100 crore from 2014 and even for this fiscal, they will be doing close to Rs 50-55 crore. This kind of growth gives me a project value of close to Rs 550 crore on the conservative side. If I add back all calculations, it gives me a roughly Rs 5600 crore. Right now, the enterprise value is at Rs 3100 crore and the way the company is actually paying off its debt, I feel the company would be debt free in 2014 itself. During this particular period we can see significant interest in real estate stocks.
We have been bearish on 2 stocks