Aashish Tater's multibagger ideas: Abbott India, Siemens

Aashish Tater, head of research, Fort Share Broking has picked Abbott India and Siemens as his multibagger picks for the day. He expects both these stocks to fetch better returns ahead.

Below is the edited transcript of Tater's interview with CNBC-TV18. On Abbott India
In MNC pharma space and other MNC stocks, we recommend on a model where the parent company go and acquire other companies at much higher valuations compared to their available subsidiaries. In terms of annualized equivalent value that gives us an arbitrage.
In 2010 when the company acquired Belgium-based Solvay Pharma, where they paid an annualized equivalent value of 12.8%. Solvay India is now merged with Abbott India and now it's a parent product portfolio across various key areas that company has.
It's a strong product portfolio. If I take a call from annualized equivalent value, in this year lot of synergy developments will happen so it is difficult to predict PAT for this particular year, so I am excluding this year for calculation.
We believe that the company will be able to overcome the synergy problem because they have good quality management. Form one and a half year perspective the company is available at an annualized equivalent of 16.82%.
On the balance sheet, the company has a free cash of Rs 230 crore. If  we add current year's profit of Rs 100-120 crore and adjust the dividend the the company will cash of Rs 300 crore by the year end on a market cap of Rs 3,000 crore and 25% is the free flow for the company.
If we replicate the exact annualized equivalent value as guided by the company’s management it give me a target of Rs 2,000 on a conservative side in next 18 months. This is a safe stock for investors who have a good time horizon. 
This is a very good bet from next 3-4 years perspective. First, if the company makes delisting move then we will have bargaining power.
If the delisting move happens in the next 24-36 months then stock price could be Rs 3,000 and even at that level the market cap-to-sales ratio will be very less.
It is a safe stock with long-term horizon. We advice investors to buy and accumulate the stock. In next six months we do not foresee lot of price movement into the stock. On Siemens
Last time also we recommended Siemens at this particular level because the company from France, the UK, the US and Germany tend to give two years forward earnings premium in order to squeeze the float and that was the rationale when Siemens got an open offer at Rs 930. We expect Siemens to come up with delisting offer. At current levels we are very comfortable with this particular stock. I am not taking valuations from Indian perspective. 
But if you take a dollar equivalent call, last time the company paid USD 20-20.50 to increase its holding to 75%. Right now its dollar equivalent is USD 12.5-13. In terms of gap much valuations has been created. This will be definitely filled. The shareholding pattern has been changing in last three quarters; FIIs have slowly accumulated the stock.
This float is clearly getting squeezed into strong hands. Hardly, any float would be left at Rs 40. If the stock goes and dips to that level then it would be the right time to take a long-term view on the stock. Even if the company makes a delisting move or not then also, we feel with markets turning to stabilized levels the stock will test Rs 1,100 from next 18 months perspective.
One year has already gone by. From three years prospective we had call for Rs 1,100. Even if one makes Rs 1,000-1,100, and makes a partial exit one will make money from current levels. This is a blue chip and a very safe stock from long-term perspective. Disclosure: I have no holdings in the stocks discussed.