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Aashish Tater, Head of Research, Fort Share Broking is bullish on UP Hotels and SpanDiagnostics. On UP Hotels, he has an initial price target of Rs 320, then Rs 380 and Rs 500. Hesays the promoter holding of 88% and the recent change in norms will give a boost to the stock.

With Span Diagnostics also planning to expand its capacity utilisation, Tater is bullish on thecompany, and has a price target of Rs 100 per share. In an interview with CNBC-TV18, Tater

outlined the reasons for his stock picks.

Below is a verbatim transcript. Also watch the accompanying video.

Q: UP Hotels, what is the story here?

A: UP Hotels is better known as Hotel Clarks. This company owns four hotels in the UttarPradesh, Madhya Pradesh and Jaipur region and these are all five star hotels. Hotel Amer andanother hotel that is based in Jaipur and Hotel Khajuraho has total landbank of close to Rs 700crore. The marketcap is Rs 140 crore. The company has been a consistent dividend payer for thelast five-six years and has been doing a consistent EPS between Rs 16 to Rs 20 range.

The interesting thing in this stock is the promoter holds 88% in the stock. With the recent change

in norms of 75% promoter holding, we are banking on this particular stock that will definitely getan open offer or there will be a placement from the promoter's side at very high level because thenet asset value of these stocks are way high.

A company that is available on a marketcap of just Rs 140 crore having a replacement cost ofover Rs 700 crore and is not having a single rupee debt into the company and is having additionalinvestment of close to Rs 10-12 crore into the bank, we feel that this stock is a clear-cutmultibagger and has been recommended to our clients from a very longer-term perspective, oneyear or so with a modest target of Rs 380.

In fact we feel by March 2011 the promoters can come out with an open offer where we havepegged our target at close to Rs 320. But we feel there is tremendous potential in the stockbecause the company has been not rated by the market as of now. Hotel Clarks is one of thepremium group available in Agra.

Hotel Siraj itself is more than the current marketcap of the company which is based in Agra. The18 acre land that the company owns in Khajuraho and the Jaipur land, the value of the Jaipurland is mind boggling. At current levels the stock is not even trading at a premium valuation to itsreplacement cost which it should deserve because looking at its peer set, Hotel Leela and others,they are not making that modest EPS in terms of valuation, PE multiple.

But this company has been a consistent performer in terms of bottomline and has been makingprofit of close to Rs 20 per share. It's a very small equity of 5 crore and promoter owns 88%. Withthe new norms we feel the stock is a definite rerating candidate and should be held from a longer-term perspective, from a multibagger perspective on the stock.

Q: You also like a stock called Span Diagnostics. Take us through why you like it and whatis the kind of upside you see for this?

A: Span Diagnostics is a Rs 55 crore odd marketcap company. But what interests me in thiscompany is their recent deal with SRL for Piramal's Diagnostic business. The company wasbought for Rs 600 crore and has sales of Rs 230 crore odd.

http://www.moneycontrol.com/india/stockpricequote/hotels/up-hotels/UPHhttp://www.moneycontrol.com/india/stockpricequote/hospitalsmedical-services/span-diagnostic/SD02http://www.moneycontrol.com/india/stockpricequote/hotels/up-hotels/UPHhttp://www.moneycontrol.com/india/stockpricequote/hospitalsmedical-services/span-diagnostic/SD02

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Span Diagnostics is into clinical research and we feel that the companys business model has gotgreat potential going forward and they have been doing exceptionally well both in terms of toplineand bottomline growth. The company has recently also announced a bonus and has been aconsistent dividend payer for the last so many years.

The interesting thing in this particular space is that the company promoters has promised close to

Rs 100 crore of sales for this year and Rs 118 crore is what we project for next year. At one pointof time the company would be trading at least one time to marketcap to sales ratio. That means aclear 100% upside from current levels.

However because its a low profile stock in a smallcap category, we feel the stock should havesome discount from a target perspective. So we have pegged the target of close to Rs 100. Butthis stock could be a multibagger given the strong ownership from the promoter side. Thepromoter has increased their stake by 2.5% in the last quarter itself. So we feel this is a clearmultibagger.

Q: Take us through the logic ofAssam Company?

A: Assam Company is one space which has been doing the rounds from 2007 onwards because

of its rich oil and gas availability in the Assam and Nagaland region. But what is interesting for usis the inclusion of the top management with Pradip Tusnial. We feel that this particular personnelhas turned around the tea estate story for Khaitans and we feel that there could be a goodrestructuring prospect into this particular stock itself.

We feel that this company has assets of close to Rs 1,800 crore on NAV basis and that too whenI discount this on a return on equity of close to 26% which is very high because this company hassmall sale that owns 18 tea plantation across India and also own four oil and gas bases.

What is interesting is the GSPC tie-up for a 750-1000 mw SEZ project that the company hasrecently got a nod for. If I see the peer valuation of the SEZ project, we feel this stock is terriblyundervalued. But what is interesting is how the company is going to fund this particular projectbecause the company is already sitting on a debt of Rs 513 crore. Thats why we feel that this

stock can be a good buy because we feel at Rs 22-21 the downside is 8-10%.

But there could be a potential upside up to 100% from a two years' perspective. If I see the entireoil and gas reserves they have a proven record in the Arakan and Amguri area based in Assamwhich is close to 60 million barrels of oil and close to 290 billion cubic feet (Bcf) of gas.

Along with that the company is in the exploratory area right now for the AAON-7. We feel therecould be a major restructuring exercise into the stock and the net asset value at a very high returnon equity, discounts at Rs 40 from a two years' perspective. We have pegged the Diwali targetgiven this was our Diwali pick at a very conservative target of Rs 30 by next Diwali which is stillan upside of 40-45% from current levels.

Given the recent inclusion of a person who has got restructuring done and has a prove trackrecord for the management we feel this could be a clear multibagger if someone holds it for two-three years perspective for a decent 25% upside year on year returns on the stock.

Disclosure:

http://www.moneycontrol.com/india/stockpricequote/plantations-teacoffee/assam-company-(india)/AC12http://www.moneycontrol.com/india/stockpricequote/plantations-teacoffee/assam-company-(india)/AC12http://www.moneycontrol.com/india/stockpricequote/plantations-teacoffee/assam-company-(india)/AC12