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Last Updated : May 31, 2013 10:41 AM IST | Source: CNBC-TV18

Tilaknagar Industries can move to Rs 75: SP Tulsian

Tilaknagar Industries can move to Rs 75 in next six months, says SP Tulsian of sptulsian.com. "The company's EPS rose to Rs 5 in FY13 and similar kind of growth is likely to continue in maybe next two-three years with 20-25 percent growth on the topline and bottomline," he adds.


SP Tulsian of sptulsian.com told CNBC-TV18, "Tilaknagar Industries has come out with good numbers yesterday. If you first see their manufacturing set up, they have 34 bottling and manufacturing units and 71 distributors with their focus presently mainly on the southern parts of India."


He further added, "If you go by their FY13 performance, topline of Rs 750 crore and profit after tax (PAT) of close to about Rs 60 crore with EBITDA of about Rs 170 crore which resulted into an earnings per share (EPS) of Rs 5. The company has very high equity base of Rs 120 crore, but still they have a book value of close to about Rs 45 with net worth of close to about Rs 550 crore plus."


"If you really see the breweries stocks, a company which is having a good presence, in fact you can compare this company very well with stocks like Radico Khaitan. If you see this brewery stock, this is ruling at a PE multiple of 12 and even price to book of 1.30-1.35 and the very strong presence. It is very difficult to penetrate and you hold your leadership or maybe a strong position in the southern part of India because of the entry barriers, because of government being the distributor in all the four states," Tulsian said.


"In spite of that, the company has been consistently improving their performance. Rs 4 was EPS for FY12 which rose to Rs 5 for FY13 and I think that similar kind of growth is likely to continue for the company in maybe next two-three years with 20-25 percent growth on the topline and bottomline."

"If you take a forward earning call, Rs 6 EPS makes the stock to rule at a PE multiple of Rs 10. In the past, the stock has moved to a level of Rs 85 or so and then corrected to the current levels. But because of the positive bias on the breweries stock and strong portfolio of the company into the spirit and Indian Made Foreign Liquor (IMFL) brands, I think the stock can move to Rs 75 in next six months or so."



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First Published on May 31, 2013 10:41 am
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