Gayatri Projects can test Rs 150: SP Tulsian

Gayatri Projects can test Rs 150 in about six months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Gayatri Projects is an infrastructure company. They have the small portion, maybe the ownership of about 30-51 percent in maybe the road BOT project, power generation company and those JVs are with the reputed or the performing companies like Nagarjuna Construction or JP Group."
He further added, "Apart from that they have their core business of EPC more in the road and irrigation. They have their real estate development also. We all know the kind of pain all these companies have really gone through because of the huge debt and similar thing has happened in case of this company also. If you see the standalone performance of the company it is quite good. That’s the reason company has even paid 30 percent dividend for FY12."
"You go on the consolidated basis they have the same problem of the high debt. Company has a consolidated net debt of close to about Rs 4,000 crore on a net worth of about Rs 500 crore of the company on a standalone basis. So what the company has now started doing that they have started exiting from many of the power projects and the best part about their power JVs are that virtually all the clearances and execution there is on the sight and all of them are likely to getting operational maybe in next couple of years."
"We have been getting the news that many of the established steel makers or maybe the existing other power producers are interested in acquiring stake in the company. For instance Naveen Jindal was very much interested in one of their power projects. So what my idea is that if company really takes up this, this kind of move we have seen getting initiated by IVRCL and Nagarjuna Construction also, so there are takers for the power generation projects. So I think if the promoters start doing that quickly and they are the very well established and resourceful promoters, so I think the things can really come back."
"The company can really come back on the track as their core EPC business is very much on the place and for the road BOT projects also there can be takers. So taking all this into consideration, looking to the market cap of less than Rs 300 crore, respectable promoter stake of 64-65 percent stake and we have been seeing these infra stocks again coming back into the focus. So I think at the current price Gayatri Projects looks good at about Rs 115. If somebody can keep a view of about six months they can expect a price of about Rs 150 or so."