PTL Enterprise has target of Rs 55: Aashish Tater

PTL Enterprise has target of Rs 55, says Aashish Tater, Head of Research, Fortunewizard.com.

Tater told CNBC-TV18, "PTL Enterprise is one stock where we feel the asset is very heavy on the balance sheet, but the market has still not re-rated this particular stock. It is a hidden gem from our side. In last 4-5 years the company was acquired by Apollo Group and since then the company has actually transformed from the angle that it has actually created lot of assets for itself through subsidiaries." He further added, "The company has a hospital in Gurgaon which is right now having 300 bed capacity which according to company is going to expand to 550 bed capacity, which we feel is a non-strategic asset for the promoters and they would likely to get exit from this particular company which will give them a valuation of roughly Rs 75 lakh per bed, approximately Rs 400 crore odd along with Rs 200 crore debt. So on a Rs 200 crore market cap you are getting Rs 200 crore after paying your debts." "What is interesting us in this particular space is the reports of Rs 40 crore of annual rental that the company is getting from Apollo Group, we feel that post this restructuring of entire game plan, the company will go and merge with Apollo Tyres itself because it does not make much of a sense for the company to operate as a lease/rent basis and we feel if it happens it will happen somewhere around an approximate value of Rs 55 because that would be the fair value for this particular stock." "Another interesting thing is they have got some land bank even in Kochi which we have valued close to Rs 250-300 crore odd on conservative side. If we align all these things in total, we feel that on downside there is hardly any risk because the company is available at 8-10 PE multiple because of the rental that the company gets, but because of annualized equivalent value we feel there is lot of potential in this particular stock and on risk reward basis this is like almost 100 percent from current levels, we have a target of Rs 55 as a merger with Apollo, so almost 70-80 percent upside from next one year perspective on this particular stock." Disclosure: Safe to assume that the stocks discussed have been recommended to clients.