Rakesh Jhunjhunwala ups stake in Geometric, shares up 8%

NEW DELHI: Geometric Ltd surged over 8% on Tuesday on reports Rakesh Jhunjhunwala has bought close to 10 lakh shares of Geometric through two block deals on the BSE and NSE on Monday.

“Jhunjhunwala bought five lakh Geometric shares on the NSE at 62.51 apiece and 4.96 lakh shares on the BSE at 62.51a share. Jhunjhunwala held 8.4% stake in the company as on March 31, 2012,” an ET report said.

“Geometric is one of the best stocks to accumulate for long term in the technology space given its past performance and valuation,” according to analysts.

Rajen Shah, Chief Investment Officer, Angel Broking is of the view that in the IT space, one stock which we have been accumulating is Geometric Ltd.

“For the current year, we expect about Rs 10.5-11 earnings from the company. The Godrej group company is trading at 5.5-6 times the earnings,” added Rajen.

Rajen strongly believes that Godrej Group which owns about 32% stake in the company may exit this business in the next 12-24 months. If that happens the stock at 6 PE multiple looks extremely cheap compared to other It companies which are trading 3-4 times the sales.

At 11:00 a.m., the company’s shares were trading 8% higher at Rs 68.45. It has hit a high of Rs 68.75 and a low of Rs 64.75, in trade so far.