Saint-Gobain Sekurit can test Rs 65: SP Tulsian

Date: 15 March 2012
In Saint-Gobain Sekurit one can expect a price of Rs 65 in next three months, says SP Tulsian,

Tulsian told CNBC-TV18, "Saint-Gobain Sekurit makes laminated and tempered automotive glass. Its performance presently is very subdued. They have a top line of Rs 100 crore and bottom line of Rs 10 crore. For the last three-four years it has not been doing very well, but promoters seem to have started taking interest. Firstly, they made the company debt free, they raised the equity base to about Rs 91 crore of which 85.77% is held by them. Since then the financial performance has been gradually improving."

He further added, "Presently, it has two plants near Pune and both cater to automotive segments. Its parent - Saint Gobain of France has euro 40 billion turnover annually. They have five divisions and glass is one of their very prominent division. There has been talk that promoters have huge plans for taking the company to new heights, creating new capacity and setting up new facility because entry barrier is a big problem in this company."

"Since 86% is held by promoter and market cap presently is less than Rs 450 crore, so the obvious choice for promoters will be delisting. They would acquire 14% stake from the market and that 14% stake at the present rate works out to about Rs 60 crore. Even if they have to pay 60-65% premium to the current price, they can acquire remaining 14% stake for about Rs 100 crore, which is not such a big amount. It is the fair value for replacement if you take replacement cost of the project."

"From this 14% about 7% is held by about 13,000 shareholders and about 7% stake is held by 400-450 HNIs. If any delisting process is initiated it is likely to see huge valuations demanded by these shareholders. If the promoters really have to make the delisting successful they have to pay a price anywhere between Rs 80-100. From a fundamental point of view, but more from a delisting angle, the stock can give a return of about 30-35% and one can expect a price of Rs 65 in next three months."

600450 Saint-Gobain Sekurit can test Rs 65: SP Tulsian

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