Advanta India can be double in 12 to 18 months: Tulsian

SP Tulsian of sptulsian.com is of the view that Advanta India can be double in 12 to 18 months.

Tulsian told CNBC-TV18, "Advanta is a hybrid seed and agricultural biotech company and having a very strong presence. They are the largest seed company in the world and one of the largest in sunflower, mustard, corn and they have their strong presence in the overseas market. If you see their revenue break-up now 85% is derived from overseas market, 15% is derived from domestic market. Lately, they have been increasing their presence in Latin America. If you see Argentina, Bolivia, Brazil, they have made huge investments in the last one year. The company came out with public issue in 2007 at Rs 650 and now the share is ruling at Rs 250. The cause of the fall in share price was largely due to the bad performance of FY11." Company posted a top line of close to about Rs 700 crore on a consolidate basis and they had an EBITDA of Rs 70 crore. They posted a net loss of about Rs 30 crore and of this Rs 30 crore, Rs 13-14 crore came from exceptional item. They have to pay the severance compensation in one of their overseas subsidy or restructuring the business in that geography because of that the company had losses. But, there is a lot of potential. In fact they are increasing their space or presence of Indian market also. Because we have been seeing that world over the demand of the hybrid seeds are picking up very much. In the Indian market there is lot of shortage of hybrid seeds. The board of the company is meeting today also for raising money via issue of FCCB. If the share is ruling at its bottom and if the company is issuing FCCB only thing one has to see what are the terms. At what premium element. What will be the premium element for conversion, maybe five years down the line whether it gets converted at 30-40% premium. So, that United Phosphorus is holding close to about 50% stake with 62-63% stake held by the promoter. Taking all this into consideration the share does not seem to have any downside from hereon. If one can keep a view of maybe 12 to 18 months, the stock has potential to give a return of 100%. It may not be able to give you much return in maybe next couple of months or next 2-3-4 months. But if a view of 12 to 18 months is taken the stock can double in that time horizon.