Tulsian on Muthoot Fin, ONGC, Petronet and RCom

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Tulsian on Muthoot Fin, ONGC, Petronet and RCom

CNBC-TV18’s newly launched segment, 'Your Portfolio', discusses the investments of one chosen reader of moneycontrol.com. Today's lucky reader hold shares of Muthoot Finance, ONGC, Patel Engineering, Petronet LNG and Reliance Communications. Check out what our expert says about these stocks...

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » Muthoot Finance BSE | NSE 31/05/12 Are Mutual Funds betting on Muthoot Finance? Other Stocks in this news Oil and Natural Gas Corporation | Patel Engineering Company | Petronet LNG Ltd | Reliance Communications |

CNBC-TV18's newly launched segment, 'Your Portfolio', discusses the investments of one chosen reader of moneycontrol.com. SP Tulsian of sptulsian.com opines on the portfolio held and advices the investor on the tricks of the trade to ensure good returns.

Shahid Aktar has written in from Mumbai and says that he owns 40 shares of Muthoot Finance at Rs 175, 10 of ONGC at Rs 309, and 90 of Patel Engineering , 10 of Petronet LNG and 25 of Reliance communications . Check out what the expert has to say about his portfolio.

SP Tulsian's take

Starting with the oil players, ONGC, I will advice him to exit for the simple reason that we have seen a good recovery in price. The share has gone up because of the fall in crude prices and that gives hope that probably, ONGC will be able to have a better realization of USD 53-54 soon. However, I will advice that this should be used as an exit opportunity by the investor because, may be, in next couple of months, we will again be seeing news of the FPO coming in and at that time, the share price can dip to about Rs 240-245. On the upside, it is not likely to go beyond Rs 300.

As for Petronet, they have posted very good results, and one can expect an EPS of close to Rs 16.5-17 for FY12. Since the results, the share is seen to have a higher base at Rs 160 and the resistance comes at Rs 180. In that view, there is no point for the investor to remain passive in this stock. If one can really make himself little active on the trading front, whenever the stock goes beyond Rs 175, he can look to sell his holdings and whenever it comes down to about Rs 165, he can look to buying it back. Petronet is likely to rule in this trading range because histororically too that's what the trading pattern reveals. Suppose he feels that he can't short, then he can just remain invested with a view of 12-18 months on Petronet LNG.

On Reliance Communication, I will advice him to exit because there has been a lot of news that they want to sell their passive infrastructure, the tower business, but they are not able to get a buyer. In fact, we can now see trading take the stock up to about may be Rs 95-100. Generally what happens is, when you see the price going to Rs 100, an investor becomes very sticky with his investments and thinks that it will go to Rs 110-120. He should definitely look to exit from the stock at about may be about Rs 95.

Coming to Muthoot Finance, the company has posted good results. If I take a call on the stock, annualized EPS for FY12 can be about Rs 26-27, it's not making for a very expensive valuation. It is ruling at a PE multiple of 7. So if we can sit on this stock with a longer timeframe, then it is good, but if he is a short-term investor, then he should look to exit at about Rs 200.

With Patel Engineering, they had a very poor FY11. Their EPS has dipped to about Rs 16 and the share is now ruling at a PE multiple of about seven times, while other EPC players or the contacting companies have been ruling at four to five times. Last month, we have seen a huge bump coming into the share price of this company. It moved beyond Rs 150. So my advice to him will be, whenever he sees a price of Rs 140-150, he can look to exit. But as of now, I will advice him to remain invested and hold Patel Engineering at this stage.