Moneycontrol
Last Updated : Oct 11, 2011 11:52 AM IST | Source: CNBC-TV18

Aashish Tater's multibaggers: Nilkamal and Wim Plast

Aashish Tater, head of research of Fort Share Broking joins CNBC-TV18 to take his pick of multibagger stocks that will return well. He selects Nilkamal and Wim Plast.


Aashish Tater, head of research of Fort Share Broking joins CNBC-TV18 to take his pick of multibagger stocks that will return well. He selects Nilkamal and Wim Plast.


Below is the edited transcript of his comments. Also watch the accompanying video.


On Nilkamal


Nilkamal is one stock that we feel has got tremendous potential going forward. If you take a look at the financials, you will find that the stock is available at close to 7-8 PE multiple. However, there is a catch. The company operates in three segments, one of which is a retail venture. Their home brand @home is expected to performance well in terms of bottomline for this fiscal and next too. The company right now has close to 16 stores and is set to increase by another four this fiscal, and almost 30 stores are to be added next year. From that perspective, this is one story in the retail segment that could be a direct beneficiary of good times.


Another segment is their hospitality wing. They are the prime distributors because they have got manufacturing tie-up with Arc International. The products such as Arcoroc and Chef & Sommelier are all branded products where the margins are close to 12-15%.


Going forward, we expect the company stock price at Rs 260-270, and is expected to find bottom close to the Rs 240 mark. So there is limited downside, but if I take a call from next 15 months perspective where we feel there could be improvement in terms of market sentiments, I think this is one stock that would definitely get a good bounce back. We have a medium-term target of close to Rs 360 on to the stock.


On Wim Plast


One sector I would give a cautious call to where people have been actually been crowding is the FMCG sector. It does not warrant an immediate exit from this particular sector, but what is interesting me is come quarter one of 2012, April-June, the companies are going to attack each other in terms of product inclusions in their own product portfolio. What does this mean? There will be price war, there will be margin shrinkages and thus, we have to cut down on PE. So I would like to give a cautious call right now that people who are trying to buy into it and looking into the way the top honchos have started selling part of their holdings, FMCG could be one sector to avoid from a 2012 perspective.


Taking a call on Wim Plast, we better know their brand furniture Cello. This is not a great story to look into, but what is interesting is its core financials. The company did an EPS of close to Rs 30 for last fiscal and is expected to do a modest EPS of Rs 34-36 for this fiscal. Also, the company is going to operationalise its Chennai plant which will contribute in FY12 itself, and their Kolkata plant which will be operational next fiscal, would see a bottomline jump of close to 25% from FY13.


From that angle, the stock which is right now is around Rs 180 odd mark, would do close to Rs 44 on EPS for FY13. Even if I take a conservative call that the company has been trading, in terms of median, it roughly works out to be six times.


So if there is a dip in this stock, then one can invest a small proportion from a longer term perspective because the company is going to pay you almost Rs 5 dividend for this fiscal and close to Rs 6.5 for FY13. I think this is one stock where you can get 18-20% return on year-on-year at least for the next two years. So Wim Plast is our safe bet with limited downside and a decent upside.


Disclosure

It is safe to assume that the stocks are recommended to clients but have no personal holding. 

First Published on Oct 11, 2011 09:00 am
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