Expect 50% appreciation in Bimetal Bearings: Tulsian
Published on Tuesday, June 9th, 2009 at 6:08 PMAuthor: admin (5507 Articles)
Investment Advisor SP Tulsian is of the view that one can expect 50% appreciation in Bimetal Bearings in 6 month timeframe.
“Bimetal Bearings is a very interesting stock. This is a company of amalgamation group. They are into the bearings, bushing and washers. They have four plants in Chennai and Coimbatore. All this if you see they have all been doing quite well, having very good market share. If I come on the financials of the company they have a very low equity base of lower than Rs 4 crore. It is a debt free company with a book value of close to Rs 320 and the promoter stake in the company is close to 75%. The FY08 EPS of the company was close to Rs 23 with a turnover of Rs 110 crore. For the last quarter of FY09 they have not yet come out with the results but if I just go by the financials of the first 9 months the company has clocked the turnover close to Rs 104 crore with an EPS of Rs 18. So, one can safely presume that FY09 EPS is likely to be close to about Rs 22-23 on the lines of FY08.”
He further added, “With the improvement in the auto sector and in the economy one can expect the improvement in the performance of the company for FY10 also. They do not have much export as we have been seeing in case of other auto ancillary company. So with a price to book value of 0.5 that means book value 320, share is ruling at a Rs 170, the company is paying dividend of 70%, debt free status, promoter stake of 75%, I think all these things gives very good comfort and if one could remain invested in the stock maybe with 6 months view easily an appreciation of 50% can be expected.”
Disclosure: Analyst doesn’t hold the above stock.
Source : MoneyControl
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