Limited downside in Hyderabad Industries: Tulsian

Limited downside in Hyderabad Industries, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Hyderabad Industries is a CK Birla Group company. The largest fibre cement roofing makers in the country and they have close to about 12 plants. The interesting part is that they have posted very good growth for FY12. The EPS has been Rs 80 plus and what I in fact liked about the company that the dividend payout ratio has been very good at 25%."
He further added, "The company has paid a dividend of 185% and if you add the DDT thereon the payout is close to about 25%, while the same has not been the case with CK Birla Group because that group has always been taken as very conservative group in terms of dividend payout and all that."
"Coming on the financials Rs 850 crore topline for FY12 is likely to get improved to Rs 1,000 crore plus for FY13 and I am expecting an EPS of close to about Rs 94-96 for FY13. If you go by the financials, if you net off the working capital debts, the company can be termed as a debt free company. Again as I said that very low equity of Rs 7.5 crore and if you take a book value of the next year it is at about 0.75 price-to-book. The book value will be Rs 540 plus."
"As I said that EPS of close to Rs 94-96 that means the share is ruling at a PE multiple of close to about four times on the current year’s earnings. So taking all this into consideration the downside seems very limited, but the stock can give a return of about Rs 450 in next six months or so."