Tuesday, November 9, 2010

Assam Company - Fort Share Broking.

Buy Assam Company, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Assam Company is one space which has been doing rounds about from 2007 onwards because of its rich oil and gas available in the Assam region and Nagaland region but what is interesting for us is the inclusion of the top management with Pradip Tusnial. We feel that this particular personal has turnaround the tea estate story for Khaitans and we feel that there could be a good restructuring prospect into this particular stock itself. We feel that this company is having a asset of close to Rs 1,800 crore on NAV basis that too when I discount this on return of equity of close to 26% which is very high because this company is having a small sale that owns 18 tea plantation across India and also own four oil and gas base."

He further added, "What is interesting is the GSPC tie-up for a 750-1000 mw SEZ project that the company has recently got nod for. If I see the peer valuation of SEZ project, we feel this stock is terribly undervalued but what is interesting is how the company is going to fund this particular project because the company is already sitting on a debt of Rs 513 crore and that’s why we feel that this stock can be a good buy because we feel at 22-21 the downside is 8-10% but there could be a potential upside up to 100% from two years perspective."

"If I see the entire oil and gas reserves they have a proven record in the Arakan and Amguri based in Assam which is close to 60 million barrels of oil and close to 290 cubic feet billion cubic feet (Bcf) of gas along with that the company is into the exploratory area right now for the AAON-7, we feel there could be a major restructuring exercise into the stock and the net asset value at a very high return on equity, discounts at Rs 40 from two years perspective. We have pegged the Diwali target given this was our Diwali pick at a very conservative target of Rs 30 by next Diwali which is still an upside of 40-45% from current levels and given the recent inclusion of one of a person who has got restructuring done and as a prove track record for the management, we feel this could be a clear multibagger if someone holds it for two-three years perspective for a decent 25% upside year on year returns on to the stock."

Indosolar: At the CMP of Rs 26, Indosolar trades at a P/E of 6.6x on FY12 EPS estimates of Rs 3.9. On a EV/EBIDTA basis, the stock is available at a multiple of 10.6 & 4.2 on FY11 & FY12 estimates. We recommend a “BUY” rating on the stock with a long term view.

Godrej Properties (GPL): Given the kind of unique asset light business model & visibility of strong cash flow with JDA, GPL commands rich valuations to its peers & trades at a premium to its NAV of Rs 570. At the CMP of Rs 718, we recommend a “BUY” on the stock with medium to long term view.



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