Archies can give 25-30% return: Aashish Tater

Archies can give 25-30% return, says Aashish Tater, Head of Research, Fort Share Broking. There will be significant expansion in terms of profitability. Thus, this could be one stock that can be in your portfolio, from the next three-four-five year perspective, till the actual potential is unleashed from the stock.

Tater told CNBC-TV18, "This is a world from an expression card market segment to single brand retail into the gift item area. What is going to make Archies interesting, from the next three years perspective, is that this particular stock can give a return of almost 25-30%."
He further added, "We feel this is grossly undervalued. It has approximately 495 outlets. Of that, 195 are owned and 300 are franchised, though they do not own those properties. On a marketcap of around Rs 90 crore, you are valuing each franchise around Rs 20 lakh."
"Hallmark is partnering with this company. When the company outlined its expansion plan for Hallmark stores, they have already opened 18 stores as of now with Hallmark Archies. That is going to expand to almost 50 by next year. So, from the next three-four years perspective, there is lot of visibility."
"With this expansion coming through well for the company, we feel the company will be rewarding its shareholders significantly. Right now, looking at the bottomline, it will not make much of an interesting bet. It's still available approximately at eight PE multiple."
"We feel there will be significant expansion in terms of profitability. Thus, this could be one stock that can be in your portfolio, from the next three-four-five year perspective, till the actual potential is unleashed from the stock." Disclosure: Safe to assume stock recommended to clients but no personal position.