Buy HOV Services, says Tulsian

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Buy HOV Services, says Tulsian

Buy HOV Services, says SP Tulsian, sptulsian.com.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about HOV Services See messages about HOV Services HOV Services BSE | NSE 30/05/12 Are Mutual Funds betting on HOV Services?

Buy HOV Services , says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "HOV Services is an end-to-end BPO company catering to the BFSI, retail, publication, healthcare segments. This company has a strong presence in India, China, Mexico, North America and the total people employed by the company is about 11,000."

He further added, "If you look at their financials for the first half, they have posted a topline of Rs 375 crore on equity of about Rs 12.5 crore and the PAT was close to about Rs 37 crore. That means they have posted an EPS of about 30 for H1. So, FY11 is likely to have an EPS of Rs 60 which has been confirmed by the management also in their conference call."

"The management has managed to initiate some good moves. In every quarter they have been declaring an interim dividend of 20%. They have already declared two interim dividends of 20% each. The board of the company will also be considering a third interim dividend along with Q3 results, which is scheduled on January 27. So if we feel that the same trend continues, which has also been indicated by the management, we can expect 80% dividend from the company on Rs 10-8 dividend on a market price of Rs 96, which gives you a dividend yield also of about 7-8% in this time."

"Except for some preferential allotments made by the company to their one overseas subsidiary which they have indicated that they will be converting that at a price of about Rs 250 per share, overall the financials of the company are very much in place whenever we see the renewed interest in the share moves to about 140-150 and then recedes maybe with the passage of time. But I think based on the dividend yield, expected EPS of Rs 60 on consolidated basis for FY11 and the 80% dividend as I said earlier, all these things makes this stock a very good buy because it is available at a P/E multiple of close to 1.5 or maybe 1.6."