Buy KSB Pumps, advises SP Tulsian

SP Tulsian of sptulsian.com recommended buying KSB Pumps at current price with a price target of about Rs 250 in next one year..

Tulsian told CNBC-TV18, “KSB Pumps has bottomed out and some revival of interest may start coming back into the stock, into this multinational company. This is because the company is into pumps, valves and related systems, having facilities at 5 locations across India. I liked the Q4 numbers of the company. They have their year ending in December and for calendar year 2012 company posted flat topline of about Rs 760 crore against Rs 775 crore for calendar year 2011. However, the operating profit margin for whole year by about 250 bps which was at 7 percent for calendar year 2011 improved to 9.5 percent plus.”
“Looking at the rise in the operating profit margin for Q4 alone, Q4 numbers have contributed quite well to this performance. Since they cater to the wide spectrum of the industries where replacement demand is also very high, the operating profit margin is likely to move into double digit for calendar year 2013. Rs 18 EPS which the company has posted for 2012 is likely to move to about Rs 22 for 2013 with promoter equity of 67 percent, with 15 percent stake held by five large investors. So, 82 percent is held by promoters and these large investors. The stock looks consistent and a good buy at the current price with price target expectation of about Rs 250 in next one year or so. Disclosure: I have no holdings in the stock discussed.