TBZL- The stock on fire

Soaring TBZL Shares

TBZL(Tribhovandas Bhimji Zaveri-Ltd.) shares managed to close at its life-time high price of almost Rs. 200 today. This stock has more than doubled than its lowest close price of Rs. 89 Rs. TBZL shares were issued at Rs. 120 in the IPO.

This stock started soaring after the news of its foray into Kolkata besides anticipation of higher sales during coming festival season. TBZL plans to open 43 new stores across India by 2015 and allocated Rs. 1200 crore for the same. India ratings, a Fitch group company, have recently affirmed TBZL’s rating at ‘IND BB+’ with a stable outlook.

TBZL’s fundamentals are not much satisfactory with its net profit margin (NPM) and current ratio below 5 and 1 respectively.  TBZL has been benefited by rising gold prices and the same is reflected in its sales.

Presently this stock is trading at a price to earnings multiple of 23.5 against the industry average of 10 and hence value investors should stay wary of this luring rally.

for more details IPO analysis of TBZL may be referred.