Buy Mcleod Russel with target of Rs 290: Sanjay Vaid

Buy Mcleod Russel with a target of Rs 290, says Sanjay Vaid of SBI Capital Securities.

Vaid told CNBC-TV18, "Mcleod Russel has come out with excellent set of numbers in which the topline has grown by 20% and the bottom-line is up by 78%. This is backed by not only revolving growth but also a higher realisation of Rs 10-15 per kg in the prices of the tea. The company is into plantation in West Bengal and has improved their realisation because the quality of tea produced by the company is very superior and it exports to countries like Russia & Europe."
He further added, "Given the quality of the tea produced as well as the kind of shortages of tea supply worldwide which we are seeing happening we feel that the stock can do very well going forward. Stock is trading at 9.6 times FY12 earnings, which is much less than the historically where the company is traded, company normally trades at 12 times one year forward therefore we see that there could be significant upside to the price of the stock and we feel that the stock can go easily up towards Rs 300 therefore we are recommending a buy in Mcleod Russel with a target of Rs 290."