Buy SKS Microfinance around Rs 80, says SP Tulsian

Tulsian told CNBC-TV18, “SKS Microfinance, I don’t see any problem in that statement having issued by them where they have said that Rs 30-50 crore will be incurred by the company because that has to be read in the context that this Rs 680 crore is lying with the company as cash and bank balances because the loans were assigned by the company in Q4 or maybe closure to 31st March 2012.”

He further added, “If one sees the kind of losses they have been continuously posting of Rs 300 crore plus in each quarter. The total losses of FY12 has been at Rs 1300 crore plus. So this is just a caution that they want to say that on account of the administrative expense, some finance cost because not they have a debt of less than Rs 600-700 crore in their books, so probably that has not got deployed, so I will take this more as a cautionary statement having issued by the company that it should not come as a shocker that this time the bottom line will be in black, whether it will be with a meager amount of Rs 1 crore and as you have rightly said the kind of run up, which we have seen and generally these kind of statements prima facie disappoints the market, nobody go into the nitty-gritty or the background in which the statement has been issued.”

“The profit booking is coming because of that and any fall below Rs 80 will really be making this stock as an ideal buy again because I have been keeping a view of Rs 120 on the stock in the next 2-3 months time. So, this statement of Rs 30-50 crore losses in Q1 is just an explanatory having issued by the management, which I will read in conjunction with the financials having posted or presented by the company as of 31st March.