Why keep #VindhyaTelelinks in your portfolio in the new year, why can this stock do wonders? What is special in the company, how are the valuations, how will the growth be, what targets to keep?  In today's episode of 'Super Stock 2022', Zee Business' Managing Editor, Anil Singhvi discussed with Ashish Chaturvedi, Research Analyst at Zee Business, and Market Analyst Sandi Jain over the pick of the year 2022.

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Vindhya Telelinks provides business solutions for optical fiber cabling and infra telecom towers. Along with this, it also works in the EPC projects for the PAR and telecom sectors. From which, it generates 82 per cent of its revenue. It also manufactures wires for PAR cables and telecom cables. 

Apart from the growth seen in the company, Chaturvedi said another reason to pick this is the deep value of the company. It has a holding of Rs 3,500 crore in the Birla Corporation, in addition to its other holdings of around Rs 4,500 crore. So, the MCAP of this company is around Rs 1330 crore. 

According to the calculation based on the value, the MCAP (Market Capitalisation) comes around Rs 3,950 crore.

The previous EPS (Earnings per share) and expected EPS

  • EPS of FY20 107
  • EPS in FY21 88
  • EPS in FY23 is expected to be 125

It has a holding of 8.3 per cent shareholding in the Birla Corporation, which collectively is 31.7% with its other three subsidiary holdings.

According to Chaturvedi, the value of shares after discounts are:

  • At 75% discount - Rs 1800 per share
  • At 65% discount - Rs 2000 per share
  • At 55% discount - Rs 2200 per share

Singhvi said that the best thing about this holding company is generally they're dependent only on the dividend and don't have any other source. But the current price it's trading on is based on its business with rush 2023.

Based on its standalone core business, it'll do an EPS of Rs 110 to Rs 125. However, if it gives a multiple of 14% -18% to other companies, its valuation comes around Rs 1500 - Rs 1700. Even at a multiple of 10, its valuation will be Rs 1200. Coming to its stake of Rs 3100 crores - Ra 3200 in Birla Corporation, with a stakeholding of 31.7 per cent including its subsidiary in the Birla Corporation, Anil Singhvi added.

According to Singhvi, the MCAP of Birla Corporation is Rs 11,000 crore. Making the value of stakeholding of Vindhya Telelinks worth Rs 3500 crore with its independent MCAP of Rs 1,350 crore. According to Anil Singhvi, Vindhya Telelinks has deep value, great business, and good management.

According to him, it's a risk-free investment. He recommends holding for long-term gains with a short-term target of Rs 1400. He gave a long-term target of Rs 1750.

Supporting the reasoning behind Vindhya Telelinks, Sandip Jain said that the stock is at a low cost, with good business alongside the name of Birla Group. Therefore, he is bullish on the stock. It is being traded on negligible valuations, he claimed.

Valuation and book value is going to increase with time, and incoming time it may reach Rs 1800, Jain added.

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