Lumax can test Rs 480: Ashish Tater

Lumax can test Rs 480, says Ashish Tater, Fort Share Broking.

Tater told CNBC-TV18, "Lumax is one company that we feel has got tremendous potential because with every change in model that a company comes up, one thing that definitely changes out is the automotive lamps. If I see this particular company, it has been into a very low volume play because the stock has been sidelined by large players, it seems. The promoters of the company have 73%, so there is hardly any free float available into the company. Every time there has been a market bounce back this particular stock has hit new highs, new 52-week highs. So, I feel this is one company which will definitely hog limelight even in days to come." He further added, "Taking a fundamental call on this particular stock, the company is the largest player and is having 60% market share in the passenger car vehicles and has tie-ups with Hyundai, JLR, Tata Motors. They are on an expansion spree. Right now, there are two projects that are going to come up, one in Sanand in Gujarat, for Tata Nano project, which is a very high volume business. We feel despite falling sales into Tata Nano, the company would definitely rework and the sales will go up in the days to come. So, we are bullish on this particular stock from volume business. The second project is going to come in Bangalore, which will again hog limelight because thanks to Toyota Etios, the model itself is having a six months waiting time. I think this particular company will have lot of potential going forward." "Taking a call on the promoter side, 41% is owned by Stanley Electric, Japan. This is one company that is trading at a cash earning multiple of close to 10-10.5 times because of their conservative approach. If I just try to take a valuation arbitrage between Stanley which is having a stagnant growth across the globe and on the other hand, I am taking call of 30-35% upsides in terms of bottom-line for this company, I think the stock can easily played with the same cash earning PE multiple." "This company is going to hog an EPS close to Rs 20-22 for this fiscal and close to Rs 28 for next fiscal. But because of aggressive depreciation policy of the company, the company will do cash EPS of close to Rs 50 for this fiscal and close to Rs 60-62 for the next fiscal. So, even I take a call from a year