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Last Updated : Dec 16, 2015 01:29 PM IST | Source: CNBC-TV18

Prefer Hawkins Cooker, target Rs 2800: SP Tulsian

SP Tulsian of sptulsian.com is of the view that one may look at Hawkins Cooker with a target of Rs 2800 in next 6 months.

SP Tulsian of sptulsian.com told CNBC-TV18, "Hawkins Cooker has three plant. One is in Thane, other in Uttar Pradesh and in Punjab. If you see TTK Prestige and Butterfly Gandhimathi Appliances, they all cater to the southern part. However, this company has a strong presence and cater to the northern part and we know that cooker is now an essential item. This company has been doing quite well and if you see the first half performance, it has all been constant; topline at about Rs 245 crore but operating profit in the first half has been at Rs 31 crore against Rs 47 crore for whole of FY15. It means operating profit has risen and the earnings per share (EPS) for FY'15 was at Rs 60 while H1 EPS is at Rs 40."

"If you see the financial performance for FY'14, the company had an EPS of Rs 72 and then it fell to Rs 60 in FY'15 but going by the H1 trend where EPS has been shown at Rs 40, I am at least confident that they are moving back to the trajectory of EPS as closer to about Rs 60. Because of this fall in the EPS or maybe the flat working company posted, the share has corrected from Rs 4,600 in February 2015 to Rs 2,200. In fact people should not get surprise that this is a bonus effect. Nothing like that; this is just an erosion in the price to the extent of Rs 2,400 in the share price and now it has reached the bottom and the best part is that of Rs 60 EPS, the company has dividend payout of 90 percent. The dividend was 450 percent for FY'15. It means they paid dividend of Rs 45," he said.

"If you add the dividend distribution tax which works out to about Rs 8-9, Rs 53-54 has been paid to the shareholder out of the EPS of Rs 60 and this dividend payout policy is consistent of 85 percent to 90 percent. So I am expecting that if the EPS is seen at about Rs 55-60 for this year, the dividend payout also will be very high and maybe the current year will have a dividend of 500 percent and apart from that it is a debt free company, promoter's stake of 56 percent and equity is low at Rs 5.3 crore with a face value of Rs 10. So taking all this into account downside seems limited, in fact these type of stocks always carry very high PE multiple."

"TTK Prestige has a multiple of 40 plus while this company has a PE multiple closer to about 30. I agree that TTK Prestige is three times of this company but still on the EPS financial performance I look for a target of Rs 2,800 in next six months."

"Shreyas Shipping moved to a high of Rs 840 in August 2015 and now ruling at Rs 440 practically half and going by the GST theme, in fact I do not think that in the recent run up maybe like Allcargo Logistics and GATI, this stock has been looked into. One can always argue that the exports are declining, so they are victim of that but it is not their capacity which has taken a hit considering their topline etc. So I think the stock has potential again, seems to have bottomed out and one can look for a target of Rs 550 in next six months."

"One can look for Jet Airways. I am worried for Indigo's volatility because the kind of volatility which we have been seeing, Rs 150 up and down maybe in couple of weeks is not giving comfort but Jet still has some room because Spicejet has seen a good run. Maybe if SpiceJet comes to a level of Rs 60-62 probably we can look at the stock there but as of now Jet can give an upside of 6-8 percent from here on.

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First Published on Dec 16, 2015 12:53 pm
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