Check out: SP Tulsian's 3 multi-bagger ideas for the day

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Check out: SP Tulsian's 3 multi-bagger ideas for the day

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com spoke about his multi-bagger ideas for investors.

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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 India Glycols BSE | NSE 30/05/12 Are Mutual Funds betting on India Glycols? Other Stocks in this news Asian Hotels (North) | Murli Industries Ltd. | Shree Renuka Sugars | KRBL | Alok Industries | NOCIL |

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com spoke about his multi-bagger ideas for investors.

Below is a verbatim transcript of the interview. Also watch the video.

On India Glycol

It is the only company in the world making MEG from the ethanol route or maybe from the molasses route. In India, the second producer using hydrocarbon as the raw material is Reliance Industries. In last two months the MEG prices have gone up from about USD 1,000 per tonne to about USD 1,250 per tonne. In fact there has been 25% rise in the realisation while we have not seen increase in the raw material prices being molasses because sugar season is quite robust this year and the production is estimated to be more than 30-35% as compared to last year.

The price of molasses remains quite stable, which is a raw material for the company. If I take working of this company for last three quarters; in Q1 that is quarter ended June 2010 the company had posted a negative net loss of about Rs 8 crore which has resulted into a minus EPS of about Rs 3 but thereafter as I said that since the stabilisation of the molasses price the company has been able to post a PAT of about Rs 8 crore every quarter.

Overall, for nine months though in the last two quarters the company had an EPS of Rs 6 but because of loss negative EPS of Rs 3 in the first quarter; the net EPS for nine months has been placed at about Rs 3 on the share. But if I take a call going forward for FY12 I think the company should be able to post an EPS of about Rs 16-17 because the molasses scenario is likely to remain quite stable, the crushing season is likely to last up to maybe end of May and that will give good supply of molasses to the company and even the next sugar season is likely to be robust.

One can expect that the visibility is seen for the company in terms of the raw material availability, in terms of the stability of the MEG prices because considering the crude ruling high and hydrocarbon as the feedstock for the other producers this should be quite advantageous to the company because since they use the agro as the raw material.

Taking all this at Rs 105-106 the stock looks good. If someone can keep a view of 12 months on the stock it can give a market price of about Rs 145 to Rs 150.

On Asian Hotels North

The reason for picking this is because this company has presence in Mumbai and Delhi. Actually in the first place when the split had happened of the parent company into three parts they got The Hyatt Regency in Delhi which has rooms 512 and then on 18 October 2010, they have merged their subsidiary company which is owning Four Seasons Hotel in Mumbai with room capacity of 202. And because of this merger of subsidiaries the paid up capital of the company increased to about Rs 19.5 crore and at that stage promoters have also increased their stake in the company to 75% by converting the preferentials held by them

Going by the present market cap of the company it is close to about Rs 450 crore and even the financial performance which we see for nine months, though in the consolidated accounts the reflection of the consolidate of the subsidiary companies also would have been reflected but I am taking here the operations for nine months on a consolidated basis which has given a topline of close to about Rs 200 crore with an EPS of close to about Rs 10 on the expanded equity.

Going forward because they are increasing the hotel room capacity by about 500 rooms in Delhi in next couple of years but if you take the present valuation of marketcap of less than Rs 450 crore with presence of the company in Mumbai and Delhi both, I think both are the prime slot and considering the value of the property. I don't think even the balance sheet of the company is quite leveraged.

Maybe in the hotel stock with such a low equity of less than Rs 20 crore and promoters stake of 75% presence n Delhi and Mumbai with present room capacity of close to 750 rooms likely to get expanded to 1250 rooms in the next couple of years makes the stock quite reasonable at a valuation of Rs 222. Those who are having long-term view because generally in the case of the hospitality or maybe the hotel stocks one needs to have a view of at least 1-2 years.

So taking that into consideration, this company can give a return of about 25-30% on an annualized basis over the next two years.

On Murli Industries

The company started their three million tonne cement plant in this financial year only and they have not been able to stabilise with the production or the operations of the company. It's a brand new plant. If you go by the Q3 performance of the company, they have posted a net loss of about Rs 96 crore and the reason for such a big loss has been the cement division, which posted a loss of close to about Rs 38-39 crore at the EBIT level. Even their paper and paperboard division did not perform very well for that quarter which posted a loss of close to about 9 crore and taking the interest burden, which is through the extent of about Rs 50 crore per quarter, as of date they have a net debt of about Rs 1,200 crore plus.

I don't think that there is any other choice before the company except to exit from the cement business. That can fetch them a good valuation because of the new plant because of the captive power capacity and mining. The plant is located at Chandrapur in Maharashtra. There would be renegotiations because in the past also four buyers have shown interest in buying their cement plant.

I think that the deal is likely to happen. The amount will be largely used by the company to retire the debts and that will deleverage the balance sheet that will put back the company on track. So taking all this into consideration - I am relying on the news of selling of this cement division by the company - that can give a further upside of about maybe Rs 8-10 though the stock has already moved in this last two-three days by about Rs 6-7, but still I feel that it can move to about Rs 46 to Rs 50 in next maybe couple of months.