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Last Updated : Dec 27, 2012 12:06 PM IST | Source: CNBC-TV18

PC Jewellers can move to Rs 150-155: SP Tulsian

PC Jewellers can move to Rs 150-155. says SP Tulsian, sptulsian.com. They are increasing their showroom from 30 to additional 20 that means the total showrooms will get increased to about 50.


PC Jewellers can move to Rs 150-155. says SP Tulsian, sptulsian.com.


Tulsian told CNBC-TV18, "There will be a flat listing of PC Jewellers only because if you go by the listing pattern of all  the stocks whether you talk of Tara Jewels or TBZ, I am not referring the TBZ, the recent upmove which we have seen  in these last couple of months where share move to Rs 300 and then corrected to about Rs 200-215, which has been  more because of this speculative elements. But overall these stocks have been ruling in a P/E multiple of maybe close  to about Rs 6-7."


He further added, "If I go by the financials of PC Jewellers they are likely to post topline of close to about Rs 4,000  crore for FY13 and they should be able to maintain their net margin of anywhere between 7.5 percent and 7.6 percent  which should give them a profit after tax (PAT) of close to about Rs 300 crore which will translate into an EPS of close  to about Rs 70."


"If you take the retail issue having made at Rs 130 per share, that translates or that works out to a P/E multiple of less  than sub-8 but going forward since they are expanding their capacity, they are increasing their showroom from 30 to  additional 20 that means the total showrooms will get increased to about 50. Infact that has been the object for Tara  Jewels also and they also had the similar kind of shorwooms i.e. 30."

"So taking overall things into consideration, I think the share should rule flat at about Rs 130-135. Those who have a  longer horizon, maybe 6-8 months can look for a price of Rs 150-155. Here I wish to draw one point, in these stocks,  the things are very shady or maybe murkier. Sometimes you worry that maybe some kind of speculative elements,  which happening in case of TBZ, you cannot rule that out and if those things happens and that is the reason that the  similar company like Shree Ganesh Jewellery is ruling at a P/E multiple of Rs 2. Purely on fundamental basis, stock  looks fairly priced at Rs 130-135 but one needs to keep a view of about 6-12 months to see the appreciation or a rise  of about 15-20 percent."

First Published on Dec 27, 2012 11:49 am
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