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Last Updated : Apr 13, 2011 11:08 AM IST | Source: CNBC-TV18

Expect 20-25% return in BASF: SP Tulsian

Expect 20-25% return in BASF, says SP Tulsian,

Expect 20-25% return in BASF, says SP Tulsian,

Tulsian told CNBC-TV18, "BASF is a multinational company. In the last couple of years the company has diversified its product range and now the products are all used in the leather, textile, dispersion, plastics and agrochemical. Earlier the focus of the company used to be more on the agrochemicals and the larger portion of the topline used to come from that due to which we used to see two better quarters working that was for June and September. But now we have been seen the working spread evenly on all the four quarters and that is the reason the company has been showing consistent and improved performance in the last couple of years."

He further added, "If I go by the performance for first 9 months they have already clocked it at around Rs 2500 crore with PAT of close to about Rs 110-108 crore, which translates in to an EPS of Rs 25 and if I extrapolate that it is likely to post an EPS of Rs 30-33."

"In fact the 9 months performance has already been achieved what the company had posted in FY10. We have been seeing the trend of land monetizations by many companies. Since the company has 9 manufacturing facilities, the chances are that the land monetization prospects can happen in the company in the next couple of years."

"Even if you see the promoters holding, the multinational promoters, they have a stake of close to about 74% but even I purely focus on the financial performance the share is ruling at a PE multiple of close to about 18-19 on historic earnings or maybe at about 14-15 on forward earnings. So going by these standards and the recent interest which we have seen on the multinational stocks either on the hopes of the delisting move or on the hopes of better working ahead, I think BASF also falls in that category and if one can buy this stock then expect a return of close to 20-25% over next couple of years."

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First Published on Apr 13, 2011 10:16 am
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