NBC-TV18’s stocks editor, Udayan Mukherjee - All of us know Jyothy Laboratories; Ujala is one of the biggest FMCG brands in the country. It is a large company, well established, good midcap FMCG play, well established brands in many categories. Essentially they are not raising money, but some of the venture capital private equity investors are making an offer for sale, so some investors getting out.
But even so in the price band of Rs 620-690, they have left something on the table assuming that they do Rs 58-60 earnings next year. The stock is coming at 11-12 PE for FY09, you will find that it is cheaper than FMCG players in the market not Hindustan Unilever. But even the midcaps stronger FMCG plays like Marico etc, Jyothy comes at a discount to that.
So fair value for the stock should be at Rs 800-850 zone in an ideal world, so they have left a little bit on the table. You can still hope for 15-20% upside for this issue. But its not one of those double on listings or treble on listing kind of candidates like Religare, the returns will be probably more modest, moderate about 20-25%, but good quality, good pedigree play.
Source: Moneycontrol.com
Thursday, November 22, 2007
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