Multi Baggers

Aashish Tater

5.30 AM Jan 1st 1970

Saint-Gobain

BSE ID : 515043 NSE ID :

RECOMMENDED PRICE 13.50

PEAK FROM RECO 132.00 877.78%

CURRENT PRICE 129.35 Resource id #14

Saint-Gobain Sekurit India Ltd, formerly known as Saint-Gobain India was incorporated in the year 1973 as a private limited company under the name Maharashtra Glass Works Pvt. Ltd. The stock looks attractively priced at current market price of 13.5 for a target of 31.

Saint-Gobain Sekurit

Saint-Gobain Sekurit will be a definite Saint for small shareholders.

Risk reward 2 for 17.5

Two key triggers and fundamentally the cheapest stock available in the space

1. Fundamental Perspective Change:

Saint Gobain Sekurit France made open offer for Saint Gobain at 31 for delisting the stock of the company. But there were not enough shares which got tendered which could have sailed the delisting offer successfully. The second option they had was to merge the stock with Grindwell Norton (another company of parent). The Second option also failed as small shareholders opposed the deal.

This has changed the fundamental game for the stock. Now all future expansions that company will undertake will be under the brand Saint Gobain and will be beneficial for small shareholders.

2. The Big Bet:

In the past it has always been pointed out why it does-not make much of a sense to have many listed subsidiaries. Check the latest filing it suggest FII stake has gone up. Over the years there were no FII's in the company but post Grindwell Merger called-off FII's stake is existing. This clearly points out our conviction there will be big change in days to come for the company which will either be compensating shareholders in form of delisting offer or the business expansion.

We ran our value proposition model and expect the stock to deliver over 1.5 Rs of CEPS. Indian Currency vs Euro has depreciated by almost 40 percent. This in relative term means it will be 20 Rs of 2013 vs INR 31 of 2010. When we last time projected the probability of delisting it came to a low probability but now probability wise too delisting looks possible with favorable outcome at derived price of 33-40.

The stock looks attractively priced at current market price of 13.5 for a target of 31. However this is initial target which we have set as the company made similar offer in 2010. If company reveals its expansion plans as they have some attractive supply tie ups with BMW etc. The stock can re-rate further.

About the Company:

Saint-Gobain Sekurit India Ltd. (SGSIL), formerly known as Saint-Gobain India was incorporated in the year 1973 as a private limited company under the name Maharashtra Glass Works Pvt. Ltd. It is a subsidiary of Compagnie de Saint-Gobain SA which is one of the top 100 industrial companies of the world. SGSIL is active in five sectors: flat glass, high performance material, construction products, construction products, building distribution and packaging. It has its manufacturing facilities located at Chakan and Bhosari near Pune in Maharashtra. Both these plants are certified under ISO 14001:2004 and OHSAS 18001:2007

The Parent company has sales of 40 billion Euros having 101 development units along with 12 research centres with a presence in 64 countries across the globe. It captures 50 percent of European Market and 23 percent worldwide.

Disclaimer: Aashish Tater is an equity analyst and investment consultant based in Kolkata, INDIA. At the time of writing this article, he, his firm and dependent family members have no position in the stocks mentioned above. The author invites readers to send him email and welcomes comments, feedback & queries at query@fortunewizard.com. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article. Safe to assume stocks recommended to clients but no personal position.