Cheviot Company may test Rs 1000 in next 6 months: Tulsian

SP Tulsian of SP Tulsian.com told CNBC-TV18, "Cheviot Company's 90 percent of income comes from jute products, that is jute fabrics and jute products. They have the two manufacturing plants. One is in special economic zone (SEZ) which is catering entirely to the export market and one for the domestic one, 45 percent of their income comes from their exports and they are catering to the developed market, which are UK, US, Netherlands and Germany where the price is not the criteria and we all know the kind of preference for these organic products or maybe the jute products abroad. It is not very price sensitive, they have a very good advantage on the realisations. If you go by their financial performance, if I just take the quarter one, topline Rs 63 crore, profit after tax (PAT) of Rs 10 crore and operating profit of Rs 15 crore, that means they have a 25 percent operating profit margin, 15 percent PAT margin and with an earnings per share (EPS) of Rs 23 for Q1." "FY15 was about Rs 76-77 and I am comfortably expecting Rs 90-100 as the EPS for FY16. And if you really see the company’ structure, Rs 4.5 crore equity, the book value is about may be Rs 725 by March 31, 2016. That means it is available below book value. And if you see the share, this has been moving on for the last maybe about one month or so. It has moved up by about Rs 100. But still I see a lot of potential," he said. "It is a 75 percent promote holding and book value is Rs 725. If I keep on adding Rs 100 EPS every year, by knocking off the dividend also which the company is paying, it is quite an interesting stock. In fact, if you see, average volume is about 15,000-20,000 shares everyday. So, one can take a safe call that in next six months or so, one can see a price of about Rs 1,000 or so."