SQS India BFSI may test Rs 1500, says Aashish Tater

Aashish Tater of FortuneWizard.com told CNBC-TV18, "SQS India BFSI is a part of SQS BFSI Germany. People have taken a myopic view on this particular sort of business, but we regard it as one of the 10-baggers in our report when we first initiated this particular stock. We feel this has got huge potential. If you see the entire business, they are into software rating and also software testing. If you see SQS BFSI Germany and the analyst report, they sound extremely bullish on the parent itself. When I chalked down the major reasons, this can be a huge beneficiary of software rating getting mandatory because you cannot ask an IT company to test its products and rate it over its competitors.""If you have an independent player who can do that, the business is infinite and cannot be put into excel because if I was going through that Nascom thing, it was somewhere around USD 15 billion opportunity and where only 3-4 major players are there of which the parent and the kid SQS BFSI India, even if they are able to garner 10-15 percent, that will be a huge opportunity going forward," he added."On valuation front, there will be a 40-45 percent jump in terms of topline and bottomline for the SQS India parent. Similar numbers are expected even from SQS BFSI India. If that happens, the stock on the forward basis trades at somewhere around 25-24 odd mark. They have been paying consistent dividend. Once they took over from Thinksoft Global because it was Thinksoft Global before and it had become a multi bagger, but we still feel that it has got huge potential to go up.""Our target of over next three years can be a potential multi-bagger, where we have a conviction target of almost 5x even from current level. But I would be, say from this year perspective over next 6-8 months have a target of Rs 1,500 on the stock," he said."In Rashtriya Chemicals and Fertilisers, the target is Rs 65. The monsoon predicted, if it goes back to that 2003 i.e. the last two years drought levels, the stock has bottomed out somewhere around Rs 36. However, the fundamental thing that we are looking at right now is the Chembur development that is likely to happen; that is what we believe." "With 50 acres only of the entire 783 acre land bank that they own, the 50 acre land approximately will be allowed for development and that is what we believe. If that happens, that itself amounts to some Rs 3,000 crore. If you see enterprise value of Rs 4,100 crore, this is just a piece of cake walk.""Even if you ignore this particular development because still it needs conversion from industrial usage to commercial usage, the stock has been hovering around that Rs 65-75 mark whenever there was average rainfall and on good monsoon time it used to test that three digit mark i.e. Rs 100." "So, from here the downside is capped, upside because of this demand, because of monsoon after two years if it goes well, then I think this is the safest stock in the sector of the RCF, NFL and FACT category. We think that the safest target would be Rs 65 even if that particular conversion deal does not happen immediately."