SP Tulsian bets on Tata Coffee as his multibagger pick

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com picked Tata Coffee as his multi-bagger for the day.

Aashish Tater's multibagger picks: Jet Airways, Hexaware Below is the verbatim transcript of Tulsian's interview with CNBC-TV18. Touching upon the massive activity which we have seen in Tata Coffee and I gather that Sharad Shah, proprietary investor who have been holding a good chunk in the company, close to about 7-7.5 lakh shares have been in trouble and his shares got sold. Kotak must be holding in his behalf as a pledge. Yesterday, the transactions having executed at sub-Rs 900, which was its low; yesterday, in the opening all the transactions got executed and then thereafter the share moved to Rs 1,020 or so, in fact its 52-week low is also close to those levels only Rs 880 or so. However, the problem which we have been witnessing yesterday, we have seen delivery transaction of 11-12 lakh shares taken place on National Stock Exchange (NSE) Bombay Stock Exchange (BSE) put together, whereas general average transaction of the delivery shares are not more than 25,000-30,000 shares. So, the hard-pressed or the distressed pledged shares have got sold and I do not think now there is any kind of problem, in fact Reliance Mutual Fund have mopped up over 1 lakh shares at the rate of sub-Rs 900 and if I take that situation away I am holding positive bias on the stock. Tata Coffee is the largest integrated plantation coffee maker in the world. They own 19 coffee estates in India with production of about 10,000 tonne and of this 30 percent is Arabica and 70 percent is Robusta. Arabica is a high value, high margin grade of coffee and Eight O'Clock Coffee, a subsidiary in US has a very strong brand recall, 150 years of history and even the financial performance has been quite good. For FY13, the company posted earnings per share (EPS) of Rs 62 and the estimate for FY14 EPS is at about Rs 74-75, which means the share is ruling at forward earning of 11-12. Whenever we have seen these types of corrections happening in the stock, this is a second time we have seen similar liquidations of the proprietary investor taken place in the stock in the last 12 months, the stock has quickly moved back to the old level of about Rs 1,200-1,300. Therefore, keeping the same stance that the stock can move to about Rs 1,400 in next six months, but those who have a short-term horizon can also look for a level of Rs 1,200 or so in next couple of months. Disclosures: I have no personal holding in the stocks discussed.