Look at Ballarpur Industries, says Aashish Tater

Aashish Tater of FortuneWizard.com told CNBC-TV18, "It is a dramatic turnaround for Ballarpur Industries Limited (BILT) after they announced that they will be exiting Sabah Forest. What company gets is roughly around USD 500 million including the working capital loan that the company will be working. So, approximately for the equity they will get roughly around Rs 2,200 crore odd.""What does this mean for the market cap of Rs 1,200 crore odd company, they are sitting on a debt of close to Rs 6,000 crore odd and they will repay this entire debt. They will be left with sales of over Rs 4,000 crore for next fiscal and there is no capex plan for two years after this particular retirement. That means the entire cash flow generation will be used either to reduce debt or do buy back," he added."Remember every time there has been no capex in BILT, they have been able to go for a buy back and they have done it in the past also at the range of Rs 23-30. So, we feel that going forward after this particular deal gets completed the cash comes into the company, the company will be doing somewhere around Rs 4,000 crore of sales and an EBITDA of roughly around Rs 750-800 crore odd. This means that on earnings per share (EPS) front they will do close to Rs 4-4.5 of EPS for next fiscal ignoring this current financial year because there will be plus and minuses and we do not expect great EPS or bottomline transformation for the company but for the next fiscal they will do close to Rs 4-4.5.""See the way the international deals have been happening. Recently only the Sabah Forest example or even the international paper example. They have all happened in EV, EBITDA multiple of 7-7.5 times. That means there is a huge valuation gap of almost Rs 2,000 crore from current level in terms for equity shareholders. That means that stock should double from here on.""If all things as we are calculating and the way international scenario has been setting up for paper business we feel this can be a great bet at current levels attractive dividend yield backed by these things. There are additional triggers in this particular company. If you see they also own Avantha Power & Infrastructure Limited. So, the company is trying to monetise even that particular investment. So, once that happens the entire game scenario will change," he said.