Jagdish Malkani, NSE Member Jagdish Malkani likes Gillette India and believes that the stock has the potential to touch Rs 1250 in a year's time.

Gillette has consolidated its businesses in India post global merger with Procter & Gamble and has put in place a new distribution set-up for itself. In a worldwide merger, Procter & Gamble acquired shaving products' company Gillette for about $ 55 billion. The integration has been completed successfully with Gillette India. Gillette India has put in place a new distribution structure, which has significantly increased Gillette's direct coverage, enhanced wholesale coverage and help service more retailers.

Gillette currently operates in three segments, namely, grooming, oral care and portable products. Grooming segment includes blades, razors and toiletries. Oral Care segment includes toothbrushes and oral care products. Portable power segment includes batteries, torches. The grooming business of the company is growing dramatically and had sales of Rs 97 crore with PBT of Rs 29 crore for the first quarter.

The CMP of the stock is about Rs 870. The market capitalisation of the company stands at around Rs 2800 crore. The company earned an EPS of Rs 22 in 2006 (Calendar year). For the first three months, they have already earned Rs 9/sh. Going forward, Malkani expects the company to earn EPS of Rs 35/sh for 07.

The stock is majorly held by the promoters. The P&G group and Poddar family hold 88.8% of the stock and 11.2% is held by the non-promoters. Malkani believes that the stock is a prime candidate for an open offer, which should be at a significantly higher price. Also many of the MNC stocks like Castrol, Bayer Cropscience etc are getting re-rated by the market, which should augur well for the stock.

Disclaimer: Analyst own the stock.