Buy Andhra Pradesh Paper Mills: Tater

Buy Andhra Pradesh Paper Mills, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "AP Paper Mills - International paper offered Rs 540 mark for the stock. If I take the same model, the stock can go and test Rs 135-140 mark on downside. This is a balance sheet clean up plus a small adjustment because now the foreign promoter and the company are in better hands. We feel the worst would be in the offing very soon. If I take a staggered purchase approach I would say that Rs 140-130 is on the downside."
He further added, "What I will look into is what the percentage amount is as 75% is controlled by the foreign promoter. So from a two-and-half year perspective, even if I take a call, they have paid their value after doing good due diligence, the stock should be fairly valued somewhere around Rs 350 to Rs 400. If I take a call from the marketcap to sales ratio, this is one company where most of the work is into the price and with another 15-20% because of the market carnage this will definitely warrant a buy."
"So someone who is looking to build a portfolio from two-and-half to three years perspective and wants a very safe stock in this category, one company that fits the criteria from Rs 140-165 mark for a staggered purchase approach is AP Paper."