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Last Updated : Mar 08, 2011 02:09 PM IST | Source: CNBC-TV18

Check out: SP Tulsian's 3 multi-bagger ideas for the day

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com spoke about his multi-bagger ideas for investors.


In an interview with CNBC-TV18, SP Tulsian of sptulsian.com spoke about his multi-bagger ideas for investors.


Below is a verbatim transcript of the interview. Also watch the video.


On India Glycol


It is the only company in the world making MEG from the ethanol route or maybe from the molasses route. In India, the second producer using hydrocarbon as the raw material is Reliance Industries. In last two months the MEG prices have gone up from about USD 1,000 per tonne to about USD 1,250 per tonne. In fact there has been 25% rise in the realisation while we have not seen increase in the raw material prices being molasses because sugar season is quite robust this year and the production is estimated to be more than 30-35% as compared to last year.


The price of molasses remains quite stable, which is a raw material for the company. If I take working of this company for last three quarters; in Q1 that is quarter ended June 2010 the company had posted a negative net loss of about Rs 8 crore which has resulted into a minus EPS of about Rs 3 but thereafter as I said that since the stabilisation of the molasses price the company has been able to post a PAT of about Rs 8 crore every quarter.


Overall, for nine months though in the last two quarters the company had an EPS of Rs 6 but because of loss negative EPS of Rs 3 in the first quarter; the net EPS for nine months has been placed at about Rs 3 on the share. But if I take a call going forward for FY12 I think the company should be able to post an EPS of about Rs 16-17 because the molasses scenario is likely to remain quite stable, the crushing season is likely to last up to maybe end of May and that will give good supply of molasses to the company and even the next sugar season is likely to be robust.


One can expect that the visibility is seen for the company in terms of the raw material availability, in terms of the stability of the MEG prices because considering the crude ruling high and hydrocarbon as the feedstock for the other producers this should be quite advantageous to the company because since they use the agro as the raw material.


Taking all this at Rs 105-106 the stock looks good. If someone can keep a view of 12 months on the stock it can give a market price of about Rs 145 to Rs 150.


On Asian Hotels North


The reason for picking this is because this company has presence in Mumbai and Delhi. Actually in the first place when the split had happened of the parent company into three parts they got The Hyatt Regency in Delhi which has rooms 512 and then on 18 October 2010, they have merged their subsidiary company which is owning Four Seasons Hotel in Mumbai with room capacity of 202. And because of this merger of subsidiaries the paid up capital of the company increased to about Rs 19.5 crore and at that stage promoters have also increased their stake in the company to 75% by converting the preferentials held by them


Going by the present market cap of the company it is close to about Rs 450 crore and even the financial performance which we see for nine months, though in the consolidated accounts the reflection of the consolidate of the subsidiary companies also would have been reflected but I am taking here the operations for nine months on a consolidated basis which has given a topline of close to about Rs 200 crore with an EPS of close to about Rs 10 on the expanded equity.

Going forward because they are increasing the hotel room capacity by about 500 rooms in Delhi in next couple of years but if you take the present valuation of marketcap of less than Rs 450 crore with presence of the company in Mumbai and Delhi both, I think both are the prime slot and considering the value of the property. I don

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First Published on Mar 8, 2011 09:28 am
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