Stock of cash-rich Sasken Comm can hit Rs 300 level within a year: G Chokkalingam

In a chat with ET Now, G Chokkalingam, Founder, Equinomics Research & Advisory pvt Ltd shares his view on Sasken Communication Technologies.

ET Now: What is your view on Sasken?

G Chokkalingam: Sasken is smallcap IT company. The scrip has corrected almost 35 per cent from its peak. One thing which we like most is that the company has cash, which is roughly 75 per cent of its current market capitalisation. The stock trades only at nine times one-year forward earnings.

Recently, the company has gone for an arbitration process. In case it succeeds, the cash can be equivalent to the market capitalisation. This has never happened in the stock market's history. Therefore, I strongly recommend the stock. I firmly believe that it can achieve a target price of easily Rs 300 within a year’s time.

ET Now: What is the other stock you are working with?





G Chokkalingam: Bal Pharma. The stock has corrected almost about 45 per cent from its peak. This is least leveraged company. It is a two decade-old company. It has got five manufacturing plants. The enterprise value is at 35 per cent discount to the sales in comparison with most small pharma companies, which are quoting anywhere from two to five times.

Interestingly, the strategic promoters have taken the stake at Rs 62, while the current prices are at 10 per cent discount to the price paid by the strategic investors. The firm's exports are diversified in nature. It does not depend exclusively either on Europe or US. I firmly believe that conservatively it can reach the target price of Rs 85 within 12 months time.