Multibaggers: SP Tulsian's long-term picks

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Multibaggers: SP Tulsian's long-term picks

SP Tulsian, sptulsian.com says, he is bullish on JP Infra and Engineers India in the long-term.

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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 Jaypee Infra BSE | NSE 01/06/12 Are Mutual Funds betting on Jaypee Infra? Other Stocks in this news Engineers India | Coal India | MMTC Ltd | State Trading Corporation of India | Hindustan Copper | Sesa Goa |

The Indian market has started 2012 on a strong foot. Experts say this is a good time to start investing for the long-term.

SP Tulsian, sptulsian.com says, he is bullish on Jaypee Infra  and Engineers India in the long-term.

According to him, JP Infra may see 25% upside in three-four months. "If somebody can keep a view of about three to four months, I think they should be able to see the share crossing the price of Rs 50."

Engineers India, he says, may test Rs 260 in six months.

2012 bets: Aashish Tater picks two stocks

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

Q: Jaypee Infra is one of your picks. What is the story there?

A: This stock has been moving for the last one week. The date for elections has been announced in five states, the model code of conduct has come in UP. We are getting the news that inspite of the company being ready with its 165 kilometer expressway from Noida to Agra, they will not be able to start it because the tariffs or the revenue or the toll collection has to be approved by UP state government. That is not likely to happen.

The project was scheduled to get completed by March 2013, was due for commissioning in January 2012. Because of the model code of conduct, it has got pushed to the first week of March or maybe when the new government will take in, probably by the end of March 2012.

The stock has moved up. But for the last couple of days, we have been seeing this stock trading in a very narrow band. Some of the profit booking has made the stock to correct to Rs 38 also.

Apart from that, we all know that they have five tranche of land, five hectares at each location means 1,250 acres at each location- Greater Noida, Gautam Nagar, Aligarh and Agra. So, the total area available to them is 25 million square meter.

They have already taken up the development at Greater Noida. On that, they have been every year consistently posting an EPS of close to about Rs 10. Because the company is an infrastructure play, they are only liable to pay minimum alternative tax (MAT) of 20%. That credit will be available to them after ten years. But in these first ten years, they will only be attracting 20% MAT.

They are trying to monetise part of the land parcel. The development work has been going on. The construction of the expressway is very much on schedule. They have spent Rs 8,500-8,600 crore on this expressway against the estimated Rs 9,700 crore. So, everything is in place.

The toll revenue will start. Concession is for 36 years. I think that is a very big period because generally in such projects we have seen a concession of anywhere between 21 to 25 years of agreement. Since the commencement of the F1, at the same location, we have seen the renewed interest coming back into their Noida and Greater Noida land parcels. They have a significant chunk there, 55% of the 25 million square meters is in that belt. That is going to be a very good value kicker for the company.

Taking all this into consideration, in my view, this is a long-term stock. But even if somebody can keep a view of about three to four months, I think they should be able to see the share crossing the price of Rs 50. That gives them a return of close to about 25%. If somebody can keep a view of about maybe one to two years, the share is capable to move to about Rs 70-75 in this period.