Buy Country Club of India, tgt Rs 1482: Networth

Networth Stock Broking has maintained buy rating on Country Club of India with target price of Rs 1482 implying upside potential of 68% in its January 18, 2008 report. "CCIL follows a hybrid model where in some cases it offers small accommodation facilities at some of its clubs and large part of its timeshare members are also members of its clubs for use of their facilities on a daily basis. So its operations span across both the retail and hospitality verticals, leaving no direct competitor for the company. From timeshare perspective, we value the company benchmarking against peers like Mahindra Holidays and Resorts which has a similar ‘membership driven model’ and is planning to list itself in order to unlock value and support its growth plans. At a CMP of Rs 882.5 the CCIL stock is trading at 20.7x its FY08 diluted EPS of Rs 43.1. This appears to be at a 55.3% discount to Mahindra Holidays, which had been valued at USD 1 billion (Rs 39.5 billion) in a recent stake sale to SBI, which based on our conservative earnings estimates, works out to 45.9x its FY08E EPS of Rs 10.5. We believe that there is a case for upside in valuations of CCIL as we near IPO of Mahindra Resorts. Giving a 25% discount to CCIL we value it at 34.4x its FY08E earnings, the target price according to which works out to Rs 1482 signifying an upside potential of 68% from current levels," according to Networth Stock Broking report.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decissions.