It is beyond our thinking how LALU traded between Rs. 16/- to 17.50 after 5 to 1 split recently. Our intention is to educate specially retail sector to enable them to obtain a good return.
(1) A. Net profit for 9 months EPS - 7.41
B. If we presumed same performance for
current quarter EPS - 3.99
Total - 11.40
C. After the split 11.40/5 - 2.28
D. Company categorized under material
sector with a present PE of Rs. 19.20
If we take a moderate PE of 17
- Rs. 2.28 x 17
Price Justified - Rs. 38.76
The targeted price would be - Rs. 40
(2) NAV Prior to split is - Rs. 104.83/5
After split - Rs. 20.9
If we consider certain popular shares traded 5 times the
NAV price double the NAV - Rs. 41.80
This unfortunate situation above due to 2 reasons.
I. It started trading when the market was
II. This was a test case prior to large splits
and Heyles Group and others should
have ensured good price and ultimately
affected others in the groups such as
Heycarb, Heyles, Diproduct, Fiber etc.