Exit Ashok Leyland around Rs 29-30: SP Tulsian

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Exit Ashok Leyland around Rs 29-30: SP Tulsian

Exit Ashok Leyland around Rs 29-30, says SP Tulsian of sptulsian.com.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Ashok Leyland See messages about Ashok Leyland

Exit Ashok Leyland around Rs 29-30, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "In Ashok Leyland I won't advice the investor to remain invested beyond Rs 30. Today it is up by about 7% largely on the hopes that 25% growth is going to be posted by the company. But if you see the financial performance overall on an annualized basis, I don't think they will be able to post an EPS of more than Rs 2.50 for FY12. I am referring this on the expanded capital which has happened after a one to one bonus, that means the share is ruling at a PE multiple of 11."

He further added, "If you take the direct comparable peer, Tata Motors which is not now the pure commercial vehicle space but that is ruling in a single digit may be at a PE multiple of seven and eight. Generally the problem with Ashok Leyland that whenever we see this kind of rally, the upward momentum doesn't remain sustained and we see a steep correction falling back the stock to Rs 25 in fact this is hovering in the band of Rs 22-30. So this is the time for the investor to take advantage, exit from the stock at around Rs 29-30 and look for the other ideas whether in the similar space like Tata Motors, though Tata Motors has also run up quite a lot or maybe in some other stocks like healthcare or pharma sector from hereon."