Empee Distilleries can test Rs 152-200: SP Tulsian

Empee Distilleries can test Rs 152-200 in next 18-24 months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “Empee Distilleries is presently into breweries. They have presence in all four southern states - Karnataka, Andhra Pradesh, Tamil Nadu and Kerala. The distributors are the state governments in all these four states and the entry barrier is very high because governments do not appoint any new distributor or any new maker for coming in this business. They have very good presence in the breweries business."
He further added, "If one goes by their performance for 15 months ended June 30 on a standalone basis, the company had a topline of about Rs 850 crore, PAT of close to Rs 23 crore and EPS of about Rs 12.50. Empee Distilleries is getting merged into Empee Sugar and post merger the company will be having sugar, breweries, power, and real estate."
"Empee Distilleries is also having large chunk of land at Sriperumbudur, which they have been trying to monetise for last couple of years but have kept it on hold. But now with the interest reviving in the real estate sector, the promoters of the company are likely to do that again."
'Going by their track record, even for FY11, the company had a topline of about Rs 500 crore plus. The company declared a dividend of Rs 5 per share. If you go by the share and not going into the complex scheme of the merger, where the company is getting merged into Empee Sugar and the equity is going to be get reduced by 50%. Effectively post merger, the promoters will be having 65% stake in the company."
"Taking the present price, the market capitalisation of the company post merger also will remain at somewhere around Rs 150-160 crore. On a consolidated basis, they have a debt of close to Rs 400-450 crore. On an enterprise value of Rs 600 crore, if you go purely on enterprise value this company has an enterprise value of more than Rs 2,500 crore or so."
"Even on the earning front, all the breweries are now doing quite well, even if you see the smaller players. This company is also likely to perform quite well. I am keeping a positive outlook on the stock. With a view of about maybe couple of years or so one can see a price of Rs 152-200 also in next 18-24 months. I am giving a price target of Rs 100 in next 6 months or so."