SP Tulsian recommends Fedders Llyod, target Rs 110

SP Tulsian of sptulsian.com told CNBC-TV18, "If I just take the written call maybe I can say that you can expect about 30 percent in Fedders Lloyd in next six months. However, the interesting part about the company is that the Fedders Lloyd group earlier was not taken very well by the market couple of years back. If you see the two companies Fedders Llyod and Lloyd Electric and Engineering, they are in fact catering more to the steel structure and railway overhead electrification." "Recently Fedders Lloyd has fore-headed into solar power and the wind tower making. Both are having very huge potential. They have very good engineering skills. If you really see the consistency in their performance on a quarterly basis, whether you take topline or take operating profit or you take bottomline, all are evenly distributed. It is not that Q4 is always the best or Q2 is always the best, it is nothing like that. So, what I am really impressed about the company’s performance is that they has the June ending, so this was their first quarter which they have reported for September. They have maintained topline of Rs 330 crore. It is exactly 25 percent what they have reported for whole of FY'15 at Rs 1,320," he said."The earning per share (EPS) has been at Rs 4.50 for first quarter against Rs 13 for whole of FY'15. So, I think that Rs 17-18 EPS can be expected from the company and you are getting the company at Rs 84. That means PE multiple of less than Rs 5; I have not seen the engineering stock really rolling at such a valuation." "The book value is at Rs 117 as of now, book discount of may be at 25 to 30 percent. The promoter's stake is 47 percent but two corporate bodies are holding 23 percent. So, eventually the HNI’s and promoter are combinedly holding 70 percent and I think that stock has corrected, so this gives a very good entry point. If you take a one year kind of return, I won’t be surprised to see a price of Rs 125 in next one year but I am giving a target of Rs 110 in next six months with very limited downside," he added."They have gone into the new sunrise industries of wind tower or maybe like solar power and we all know the kind of growth and the capacity addition being talked about, they have that engineering skill. They have seven plants in India and one abroad. The best part about this group is that they have grown, they have graduated in engineering skill and that is why they could be able to launch the consumer durables like AC, televison and all sot of things in their other company which also appreciated in this last couple of years. So, taking this into account, I recommend this stock may be from 6 to 12 months point of view."