Wheels India can move to Rs 1000 in next six months, says SP Tulsian, sptulsian.com. This company is making the steel wheels for cars, utility vehicles, trucks, buses, tractors and construction equipments and this is in technical financial collaboration with Titan of Europe, he adds.
SP Tulsian, sptulsian.com told CNBC-TV18, "Wheels India is a TVS Group Company. This company is making the steel wheels for cars, utility vehicles, trucks, buses, tractors and construction equipments and this is in technical financial collaboration with Titan of Europe. There has been some indirect shareholding change because of the acquisition of this foreign promoter by another company there and they came out with an open offer where they mopped up an additional 5.5 percent stake and now this foreign collaborator that is Titan Europe is holding close to about sub-42 percent stake in the company, while TVS is holding close to 49.9 percent stake. So combined stake of both these promoters is close to about 92 percent."
He further added, "There has been talk that probably the TVS Group is not very happy of this foreign promoter having increased their stake to 42 percent and they are either looking to divest their stake or talking to them of reducing their stake and even if you go by the listing norms probably they will get six months time because this open offer has just concluded. So promoters can give an undertaking that either they will bring down the shareholding or they will increase the company’s equity base by which their shareholding will reduce."
"So in the meantime we are expecting that probably some kind of settlement may happen between the promoters to realign their shareholding which can happen at a very high price and apart from that if you take a fundamental call also Rs 27 crore has been the profit of company for first nine months on topline of close to Rs 1,500 crore which translates into an EPS of Rs 27. So close to Rs 36-40 EPS company and because of these delisting hopes or maybe the realignment of the shareholding between the promoters, I will not be calling it as a hostile bid amongst them, but things can definitely make the shares to move to a level of Rs 1,100-1,200, but I have taken a price target of Rs 1,000 in next six months or so."
Disclosure: No holding or interest in the above stock.