Aarti Drugs can move to Rs 200: SP Tulsian

Aarti Drugs can move to Rs 200 in the next 6 months, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Aarti Drugs makes API, pharma intermediates and steroids. It has total eight plants at two locations. One is in Tarapur in Maharashtra and the other is at Sarigam in Gujarat. Their Q1 earnings came well. They posted a topline of Rs 190 crore and EPS of Rs 7.90 for the quarter, while EPS for whole of FY12 was close to Rs 18 or maybe sub-Rs 18."
He further added, "Their profit margins have been the main reason for contribution of this improved performance because topline has shown a growth of about 15-20%."
"If I take a call on overall yearly performance, they have posted topline of about Rs 660 crore in FY12 with EPS of close to Rs 18, I am expecting that in the current year they should be able to post a topline of close to Rs 840-850 crore with expected EPS of close to Rs 32-33, that is a conservative estimate."
"Considering that investments are now being made into midcap pharma companies because frontline companies have already run up quite a lot, this company can come in focus of investors sooner or later."
"With an expected EPS of Rs 32, the share is still ruling at PE Multiple of 5. The present book value of the share as on June 30 is at Rs 155-156. Taking all this into consideration, the stock looks reasonable at this price with a limited downside. The price can move to Rs 200 in the next 6 months or so."