KPR Mill has target of Rs 250-260: Tater

KPR Mill has target of Rs 250-260, says Aashish Tater, Head of Research of Fort Share Broking.

Tater told CNBC-TV18, "KPR Mill is an interesting story from a longer term perspective. If I see the financials of the company, company is going to post robust results going forward, also we expect an EPS of close to Rs 30 for this fiscal that means the stock is not trading even at a PE multiple of 6 times going forward." He further added, "On a longer term if I see the plans of the company, the company can ramp up its capacity by 40-50% through brownfield expansion without actually having that much of capex expenditure thanks to the strategic built up for the plants. Now if I take a call on the capacity expansion of the company that is already undergoing the company is sitting on a spindal capacity of close to 210,000 which will be ramped up over to 3 lakh in days to come. So this is one company that is going to have 40% push to its topline and this is into a space that we are quite bullish on quite some time textile." "We feel that the company can easily clock an EPS of close to Rs 43 for next fiscal thus we feel that the stock will be a true multibagger. Going through past experience for commodity cycle, we feel before the commodity cycle actually peaks out all the stocks stays into a double digit PE multiple, KPR being one of the consistent dividend player into the space. We feel the stock can easily be bought with a target of Rs 500 from two year perspective because sometime during this phase the company would trade close to 10-12 time PE multiple where people should be looking to exit the stock." "Another thing that I would like to hog into limelight is that the promoters have been slowly acquiring the stock and they have been increasing their stake close to 74-75% so on a longer term call side given their confidence we feel the target is quite achievable in the longer term, however we are giving a short to medium-term target of close Rs 250-260 levels and then Rs 320 levels in days to come. Let the fundamental story in this particular stock play out, with it's capacity expansion along with it's wind power projects which is right now 40 megawatts will be tuned to 64 megawatts in days to come these are clear cut cost saving for the company and that would push the bottomline even going forward thus we have a longer term call on to the stock."