Broker’s call: Pilani Investment (Buy)

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Target: ₹3,274

CMP: ₹2,384.75

Pilani Investment and Industries Corporation Limited (PIICL) is an Investment Company registered with Reserve Bank of India as a Non- Banking Financial Company without accepting public deposits. The principal activities of the company comprise of investments in shares and securities of Birla Group of Companies as well as providing loans to them, trade accounts receivable and investment in mutual funds.

PIICL has got strategic investments in a number of its listed group companies as well as mutual funds and other investments, the value of which stands at ₹14,406 crore as on date. The current stock price is trading at a discount to its NAV of ₹13,096 a share.

Grasim, Hindalco, Ultratech Cement and Century Textiles are some of its major investments. The outlook of these companies is positive for the long term.

PIICL has traded at an average discount of 70-80 per cent over the last 5-6 years. Normally, holding companies trade at a discount ranging from 60-80 per cent which varies from case to case basis. For valuation purpose we are assuming a discount of 75 per cent to the current NAV and assigning a fair value target price of ₹3,274