Provogue a Compelling Buy @ Rs34 (Adjust it for Demerger)

EDITed: Should be Adjusted for Demerger of Prozone. and Read Latest Updates As of May and July

Why Provogue?--------------Provogue = (Provogue +Prozone)
What am i paying for the company (Rs 34.5) Market Cap of Rs 400 Crs- Debt - Rs 400 Crores

In 2 lines you shall understand the worth of the company

Stanalone Provogue is expected to generate PAT Of Rs 36 crs in 2011 & Rs 40+ crores in 2012.

Now as the Market is corrected the stanadlone PE STANDS AT 10. Where as in a Bull market quotes at a PE Of 20+.

So on a stanalone Basis it is cheap.......SO Are many other companies. What made me write @ 6 am.. There is [PROZONE) Which i have not factored atall.

Let me write a little about PROZONE (as per Deal in Jan 2011 @ 850 ++Crores I.e over Rs 70 a share ). Provogue owns 75% stake in Prozone valued over 650 crores.

The aurangabad Mall is already operational and other are going to operation in Feb/ March 2011 (Q4 2011)

SO let me value it on a worst case basis @ that also comes above 50rs

Calculate a fair value (BEAR CAse )-------Mark faber big BEAR OWNS OVER 10% IN company

Provogue :10x PE fy 2012 ------Rs 35-38 a share

Prozone Value 50 odd % discount to deal ---- Rs 30 a share

That makes it close to Rs 70 a share......

Now same if i reverse to a moderte situation like 6 months down the line

Provogue :15x PE --------- rs 50+ share stanalone

Prozone Value ------------ Rs 40 + a share

Rs 90 + a share

Risks already into the price include instability in the Realestate market but look @ the Prozone model.It is different from resedintial and commercial model.

Strong partners ::::::::Liberty International..........

Very little to loose...@ Rs 34 odd. Strong BUY......... Hold for a year shall double your money if market doest crack. Risk Reward is Favouarble. Its always about the price you pay..

Good Luck............. kEEP mINting..................................CU ALL SOON with another Detailed Idea.

Do share Your views too. Saw so many hits for Inox tooo. Do share your opinion as well...

Aditya