Mahindra Forgings can move to Rs 120: Tulsian

Mahindra Forgings can move to Rs 120, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "About maybe six months back Mahindra Forgings made preferential allotment to QIB at Rs 107, Mahindra and Mahindra (M&M) group have acquired the shares at Rs 137 and that too they were sizeable investments over 1 crore shares have been allotted to QIB, close to about 75 lakh shares were allotted to M&M and at that time we have seen share price moving to about Rs 150."
He further added, "If you go by the present shareholding pattern also 51% is held by M&M and about 32% is held by the six institutional investors, so close to about 86-87% stakes are held by the institutional investors and M&M in fact this company had their problem with their overseas subsidiary, they have two overseas subsidiaries and those overseas subsidiaries were making huge losses. But now everything has come on track and if you see the nine months performance on a consolidated basis they have an EBITDA of close to about 8.8%."
"If you go by the presence of the company as I said into three countries including India ten plant and the kind of products they are making into the forging space like crankshaft and all that, all these products made by the company have a good market share of as high as 30% to 70% and all these products are catered to two-wheeler, automobile, car, SUV, commercial vehicle even the agricultural sector like tractors and all that. So company is coming back on the track and hope that maybe the EBITDA margin in a quite well can get ramped up to over double digit to about 11-12% and once that happens one can keep a view of about 12 months. I expect again the share price to move to about close to Rs 120, which his now ruling at Rs 67 in fact giving a return of close to 60-70%."