Action Const likely to show CAGR of more than 30%: Tulsian

Excerpts from Your Stocks on CNBC-TV18 Watch the full show » RELATED NEWS Post IPO CAR will be at 19.5% Vs 9.39% now: Nasser Munjee Action Const BSE | NSE 10/02/12 Are Mutual Funds betting on Action Const?

Investment Advisor, SP Tulsian believes that Action Construction is likely to show CAGR of more than 30% on topline and bottomline. One should take a long term call on the stock.

Tulsian told CNBC-TV18, "What I like about Action Construction Equipment is that they are into material handling equipment and always this industry carries a very high PE multiple on the bourses, maybe about 15-20; plus the promoters stake is very high. Apart from this they mobilize the money for setting up a new plant in Faridabad, which they are likely to make operational by Q4 of FY07; in fact the gestation period is very low."

He further added, "Apart from this the company is virtually debt free, in fact entire amount for the new project is getting mobilised from this issue. So all in all there will be no interest burden, good promoter holding, very good industry. And plus the company is likely to show CAGR of more than 30% on topline and bottomline in the time to come; maybe in the first year, FY08, they could have a growth of even 40-45% or maybe 50% on topline and bottomline. But in the subsequent year, also for the next three years, they can have a CAGR of 30%."

"I am quite hopeful and bullish on the stock and I think one should take a little long term call on the stock. This can give a very good returns even from these levels. Even one should not be too keen to book profits at Rs 200 levels, one should remain invested into the stock."