Buy Bharati Shipyard at current levels: SP Tulsian

SP Tulsian of sptulsian.com is of the view that one can buy Bharati Shipyard at current levels.

Tulsian told CNBC-TV18, "Bharati Shipyard has taken a lot of beating post their acquisition of Great Offshore. They have acquired close to 50% stake in the company and since then their interest burden has risen very significantly. If you compare, couple of years back, ABG Shipyard and Bharati Shipyard used to be nearly at the same price because of their practically same topline and bottomline. But in the first nine months of the current year, Bharati Shipyard has shown dull performance especially on the bottomline because of the large hit taken on account of interest. If you go by the performance for the first nine months they have posted topline of close to about 1,200 crore with the EPS of Rs 25. But if you see their presence, they have their presence on eastern as well western coast. They have total nine shipyards. It has now become a compulsion for the management to go and reduce the debt of the company and probably there would either some asset sale or maybe something device by the management.

He further added, "So taking all this into consideration maybe FY11 in the current situation should have an EPS of close to about Rs 35. So that translates into a price earning of close to 4. Even if you go by the book value it is ruling at around Rs 280, so a price to book of 0.5. So I don