Ashish Chugh recommends promising sub Rs 50 stocks

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Ashish Chugh recommends promising sub Rs 50 stocks

Investment analyst Ashish Chugh is bullish on SSPDL, IFGL Refractories and Andhra Cement. He advises investors to buy into these sub Rs 50 stocks.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news IFGL Refractories | Andhra Cement |

Investment analyst Ashish Chugh is bullish on  SSPDL , IFGL Refractories and Andhra Cement . He advises investors to buy into these sub Rs 50 stocks.

Here is a verbatim transcript of Ashish Chugh's comments on CNBC-TV18. Also see the accompanying video.

On IFGL Refractories

IFGL Refractories is currently trading at a price of about Rs 48-49. This is a refractory company based in Orissa. Besides the plant in Orissa, this company has got two major subsidiaries called Monocon International and Hofmann Ceramics. In total this company has got manufacturing operations in seven countries. Now, 2008-2009 was a difficult year for this company mainly because of the fact that the steel industry saw a meltdown and the steel industry biggest customers. As a result of which the second half of the company was not that good. The company suffered losses in the second half of 2008-2009.

In the first half of the current financial year company has achieved a profit of close to Rs 17 crore. We have been recommending the stock on CNBC-TV18 earlier also but what reinforces your liking for the stock is the recent interview, which the management of the company had on your channel about a few days back now. They mentioned that the second half of the current financial year can be substantially better than the first half. We also believe that the worst maybe over for the company.

The company, which had installed its expansion project at Kandla, has now restarted that project. That project will add about Rs 150 crore to the revenues and that will become operational in 2011 and besides this, the company also looking for more overseas acquisitions. Now because of the company's organic and inorganic expansion projects, which are going on, company has the potential to become a significant player in the world refractory market over the next couple of years.

So at the current market cap of about Rs 150 crore and price-to-earning of about 4-5, we do not see too much of downside from these levels. At a PE multiple of 4-5 the stock looks undervalued.