Shriram EPC looks worth buying at Rs 240-250

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Shriram EPC looks worth buying at Rs 240-250

Shriram EPC is not cheap but reasonable order book in the right space. If because of market conditions one gets the stock around Rs 240-250 that probably is worth a look at that price. Otherwise one can buy large blue-chip EPC plays rather than paying 21-22 times for Shriram EPC.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » Bang Overseas BSE | NSE 30/05/12 Are Mutual Funds betting on Bang Overseas? Other Stocks in this news Shriram EPC |

CNBC-TV18's Executive Editor, Udayan Mukherjee - Shriram EPC is better between two yesterday's listings. In fact it is fundamentally the stronger of the two, it's not cheap but reasonable order book in the right space. The only problem and the only reason why the stock came off from that issue price of Rs 300 I suspect was that valuations are not very compelling. Even if they do Rs 13-14 earnings next year FY09, which is what they spoke about yesterday they are still at 21-times. You can find lot of stocks now in the large EPC space at 21-times next year forward. I know they are growing fast but they are still a small company. My guess is that you are better off paying 24-25 times and getting into a really large blue-chip EPC plays rather than paying 21-22 times for Shriram EPC.

So because of market conditions it might bounce today but if because of market conditions you find the stock around Rs 240-250 that probably is worth a look at that price. It's not a bad company but it's expensive.

Bang Overseas

Bang Overseas has lots of plans but not too much to show for all those plans right now, which is why the room for downside is more. It's cheap if what they said yesterday actually comes through then they are trading at only about 8-9 PE, which compared to some of their peers like Provogue is much lower. But then Provogue has much on the ground and this one just has a brand Thomas Scott.

So it's difficult to say where these stocks bottom out but if market conditions are not very favourable then the stock could come off more because it doesn't have too much by way of proven numbers or capabilities or retail stores out yet. The market seems in a punishing mood for futuristic stories at this point.