Experts analyse: Five below Rs 50 stocks

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Experts analyse: Five below Rs 50 stocks

Pradeep Chokani of Dolat Capital and Managing Director of India Infoline, Nirmal Jain express their views on some stocks, which are below Rs 50.

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Pradeep Chokani of Dolat Capital and Managing Director of India Infoline , Nirmal Jain express their views on some stocks, that are below Rs 50.

Chokani discusses stocks like Jenson & Nicholson , BAG Films  and Uniphos Enterprises . Whereas, Jain expresses his outlook on stocks like Duncan Industries , Tata Teleservices , Deccan Chronicle and Sunflag Iron .

Chokani and Jain discuss the risk factors and the current prospects of these companies as well.  

Excerpts from an exclusive CNBC-TV18 interview with Pradeep Chokani and Nirmal Jain: 

On Jenson & Nicholson:

Chokani: Ideally, it is a takeover target. It has a very good brand image in its architectural segment, with the launch of Instacolour. They launched it some time back, and it had a very good repeat business.

However, the problems are plenty in this company. They have a very high debt component, of more than around Rs 250 crores in 2004, on numbers. They have an employee cost as high as 42% of sales. The paint segment is doing well, and we are looking at 15% compounding story for the next two years, for majors like Asian Paints , Goodlass Nerolac and Berger Paint s. But, Jenson & Nicholson is a takeover target.

If one looks at the net worth of the company, then it is negative. In future also, it will be negative. Whatever products they have launched earlier are doing well, but not to the extent that the net worth would become positive in the next two years. So ideally, it is a takeover target and nothing else. I would hold some stocks myself.

On BAG Films:

Chokani: This is an emerging media company, with diversified revenue streams coming from television software and film production. They also have a media school coming up. They have the number of programming hours going up from 24 hours to 32 hours, and that too in the prime slots.

They have three feature films which will make their debut in the third quarter of financial year, 2006. The cash inflows from these two (television software and film production), coupled with cash inflows coming from media school, will come in the FY06. That means that we are looking at a revenue growth of more than 50%, and an earnings growth of more than 60%. Therefore, we are looking at the valuation of roughly around 16 times in FY06.