Buy Manappuram Finance, says SP Tulsian

Tulsian told CNBC-TV18, “A pause will be seen at close to about Rs 100 for SKS Microfinance and we have seen that level reaching now. So I won’t be surprised to see even if the stock goes to about Rs 105-108. In this euphoria we will see profit booking swiftly coming back because for the short-term investors this is giving them a huge profit of maybe about 30% in one week or so because the kind of delivery based buying which we have seen on Friday and even today is bound to see some delivery based profit booking coming back.”

He further added, “I won’t be venturing into SKS Microfinance at these levels in view of the target of Rs 100 in the near-term but for Manappuram Finance post bearing acquiring the stake in the company we have seen that much floating stock getting absorbed and now continuous buying maybe at the lower level because shroud or very systematic buying is happening in Manappuram Finance. We have not seen the stock moving in frenzy beyond Rs 34-35 even in last run-up and whatever buying which we have seen happening has got absorbed by the institutional investor as we have discussed of bearing close to about 6-7% stake and inline with that we see other large investors also making investment into the stock. So one can say that about 10% of the float got absorbed in that run-up and now the second round of rally has started happening in Manappuram Finance.”

“I will be keeping positive view on this stock because for the reason that book value close to price to book of 1 based on FY13 and PE multiple of close to about 4-4.5 based on FY13 earnings still makes it a very good buy. In case of SKS there is process of revival of the business but here you have the set business model available. So I will be looking for Manappuram Finance with a target anywhere between Rs 38-40 with next 30-45 days time horizon.”