Rossell India may test Rs 160, give 20% CAGR: Aashish Tater

Aashish Tater of fortunewizard.com told CNBC-TV18, "Rossell India is not only into tea but also in quick service restaurant to its Kebab Xpress and also into defence play. Of the three business that attracts us most which is right now at a peanut level of Rs 28 crore of revenue is a defence business. The entire tea space will get re-rated because coffee prices are also going up. That is why you have seen that old calls of us whether it was Jayshree Tea or even Mcleod Russel which have given 20-25 percent return." "Rossell India used to do some Rs 110-120 crore odd of sales from their tea estate business. They will do close to that because the prices are reaching the 2013 levels. They can do close to Rs 25-30 crore of profit after tax (PAT) from that business itself," he said. "If you look into the other businesses, the most important is that Boeing has awarded Rossell India subsidiary Rossell Techsys as one of the key suppliers and has awarded them with a golden award recently for the 2015 supplier of the year award. That space is going to grow at a pace of over 100 percent. It is what we estimate and they are into also defence space with DRDO. So, this is one niche that the company is working on and we feel this can be bigger than the current market cap over next three to four years." "So, there is lot of potential in this business right now, we are just working with a target of Rs 160 based on the entire value that we see over next six months period. This is one stock that has a potential to give you 20 percent plus compound annual growth rate (CAGR) returns for next three to four years. So, a stock that can be looked upon and with tea actually going up, tea stocks, I think there could a significant re-rating even after the Rs 160 odd mark. This is one stock that can be looked upon from short-term to medium-term to long-term," he added.