Multibagger picks: SP Tulsian's 2 must-have stocks

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Multibagger picks: SP Tulsian's 2 must-have stocks

SP Tulsian of sptulsian.com has picked Torrent Power and Mukand as multibagger stock picks for the day. He sees these stocks earning better returns in the time span of 6-12 months.

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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 Torrent Power BSE | NSE 01/06/12 Are Mutual Funds betting on Torrent Power? Other Stocks in this news Mukand | Chambal Fertilisers and Chemicals | PG Electroplast |

SP Tulsian of sptulsian.com has picked Torrent Power and Mukand as multibagger stock picks for the day. He sees these stocks earning better returns in the time span of 6-12 months.

Speaking to CNBC-TV18 Tulsian said,"Torrent Power has the current capacity of 1,650 MW. The company is planning to set up 1,200 MW power plant at Dahej, this would prove to be kicker for the company's profitability. From 12 months perspective the stock can give 30% plus returns. It is also expected to post an EPs of Rs 30."

"Mukand has been catering to automobile sector. If you pick such stocks at this stage they can give return of 30-40% over next 12 months. The promoter's stake in the company is at 55%. Their operational performance is likely improve at the Hospet plant. Those hunting for some midcap ideas can look to buy this stock with a view of about 6-12 months, "he added.

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Below is the edited transcript of Tulsian's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also wacth the accompanying videos.

On Torrent Power

Their Q1 for FY11 indicates a growth of about 20% on the topline and bottomline. FY11 had an EPS of around Rs 22.50, they have already posted an EPS of close to Rs 7.40 in Q1. This implies that FY12 will be having an EPS of Rs 30. That gives a PE multiple of less than 8 or 7.5 times of the current year's earnings. Apart from that, the company is setting up a new power generation project of 1,200 MW which is gas based. That will be a real kicker for improving their profitability in times to come.

The financials of the company are quite in place and their debt equity ratio is very comfortable. They have very comfortable cash position and the PE multiple is quite attractive. The shareholding pattern has been quite stable; the promoters hold 53%, 31% is held by institutional investors in which Gujarat government holds about 5-6%.

That adds to about 84% HNIs are also holding about 7-8%. The public float is also very low at about 6-8%. If one can keep a view of about 12 months this stock is capable of giving close to 30% plus returns. It is a very sound stock from a very long-term horizon.

Mukund Limited

It is a Bajaj Group Company making special steel, alloy steel, stainless steel and also catering to automobile, engineering, electrical equipment makers. They have small contribution for material handling equipment also. There has been consistent performance but what we are seeing now is value erosion because midcap stocks have been eroding in last couple of months.

If you pick such stocks at this stage they can give return of 30-40% over next 12 months. There has been some property sale buzz because they have two plants one at Kalwa and second at Hospet. But, don't think that is a serious news.

All these companies have been facing problems in Hospet because of non-availability of iron ore. But now with auction and production by NMDC the situation is getting resolved for all these companies.

It is a Rs 3,000 crore topline company with EPS of close to Rs 4. The company is holding a large chunk of land in Kalwa. But I don't think sale of assets is a serious news to enter the stock because I don't think that is likely to happen.

Their operational performance is likely to improve at the Hospet plant. That should improve the profitability in times to come. Those hunting for some midcap ideas can look to buy this stock with a view of about 6-12 months.

Disclosure: I have no holding or interest in any of the stocks.