Moneycontrol
Sep 18, 2017 10:08 AM IST | Source: CNBC-TV18

Buy Multibase India: SP Tulsian

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com in which he shared his readings and outlook on market and specific stocks.

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com in which he shared his readings and outlook on market and specific stocks.

Below is the verbatim transcript of the interview.

Anuj: What is the stock that you are betting on this morning?

A: My stock for the day is Multibase India and in fact I recommended this stock at Rs 345 on June 7, about three months back. The stock already gave a gain of 34 percent, but after looking at the excellent Q4 numbers having posted by the company, we have been giving our renewed buy call. If you take the Q1 numbers, the company has posted an income of about Rs 29 crore, PAT of Rs 4 crore and EPS of Rs 3.10 against Rs 2.17 same quarter of the previous year which means there is a growth of about 40 percent in earnings.

Generally, if you extrapolate the numbers, Q1 into 5 is seen as the EPS. So, if I just take Rs 3.10 as the EPS of Q1, FY18 should be able to give me an EPS of closer to about Rs 15 or Rs 15.50. If you go by the business model of the company, it is an MNC, France based Dow Corning holds 75 percent stake in the company and company is making polypropylene compound, thermoplastic elastomers, silicon, and thermoplastic master batches which find applications largely in the automobiles and engineering space. So this has a wide application and they have a very strong R&D support from their parent. Apart from that, they have their own R&D plants here in India along with their manufacturing base at Daman.

So taking all this into consideration with market cap of just about Rs 580 crore and the company is a debt free company with cash of about Rs 30 crore in the balance sheet, so MNC status, profit making company, about 40 percent growth in bottomline to be seen in FY18, share now ruling at Rs 460 can move to a level of Rs 555 in next six months or so.
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