Vinay Pandit, Sr VP-Institutional Equities at Centrum Broking is of the view that Apar Industries may rise nad hit Rs 490.
Vinay Pandit, Sr VP-Institutional Equities at Centrum Broking told CNBC-TV18, "Apar Industries is primarily into conductors. That is one part of their business where they are market leaders with another player. The second part of their business is speciality oils. Now, the reason for the fall that has happened in the company is primarily because crude corrected from its peak, so they have seen some inventory losses in their speciality oils business. The second is in their conductor business. They have been having some international orders where they have had issues of passing on the physical premium where they have lost out on the London Metal Exchange (LME), so that is what has hit them. These orders are being adjusted now, they are being readjusted. So, all future international orders are now being bid along with the volatility in the physical premium as well."
"The kind of correction that we have seen has factored in. We were expecting a weak earnings for the fourth quarter. But that is when we believe that this company factors in most of their downside and therefore it is available at almost 6.8x or six and half-x FY17 earnings. And even I we look at 10x multiple, we are talking about a reasonably big upside from here, Rs 330 going up to almost Rs 490. So that has been the reason for the downside in this company. And probably another quarter where they will have these export orders which have been building in some losses, coming into their system post which we are expecting the earnings before interest, taxes, depreciation and amortization (EBITDA) per tonne in this segment to revive as a full year and come back to its historical highs the next year itself," he said.
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