Arvind can test Rs 90: SP Tulsian

Arvind can test Rs 90 in 2-3 months time, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "The immediate trigger for Arvind to move higher is the monetization of the land. They have 12 million sq ft and they have already inked the agreement for that about 9 million is with Tata Housing for 134 acres of land and 3 million sq ft is with other developers. So that is the immediate trigger for the company and for next couple of years the company should be able to generate about Rs 1500 crore as amount from monetization of this land."
He further added, "Still the company is sitting on close to one-third of the land bank, which they have not yet entered into any agreement. So if they are going to knock off that debt, which is to the extent of about Rs 1800 crore and of that maybe about Rs 700-800 crore is for the working capital. So that will make the position of the company quite healthy."
 
"Even now the interest burden of the company is more than Rs 200 crore on an annualized basis. So Q1 is giving lot of comfort, a topline of Rs 1200 crore with EPS of close to Rs 2.50 paisa. It is certain that FY12 will be showing EPS in double digit close to about Rs 10 from core operations. Considering that the company being the largest denim maker in the world with 110 million sq ft capacity, integrated textile plant. Their shirting division has been doing quite well."
"Foray of the company into the retail is going to be a big kicker, the kind of valuations which we are seeing being given to the retail stocks especially like Raymond. This replicates with Raymond, there are also monetizing the land, and they have strong brand equity. So taking all this into consideration, I am quite convinced and attracted to the stock and expect that maybe in the near-term, maybe in the next 2-3 months share should move to about Rs 90 and has the capability to breach three digit mark in the next 8-10 months time."