Portfolio manager PN Vijay picked Zylog Systems and Dewan Housing as his multibagger stocks for the day. He expects these stocks to earn better returns ahead.
Speaking to CNBC-TV18, Vijay said, he expects Zylog to close the financial year with an EPS of slightly above Rs 100. He has a price target of Rs 1,100 in the next 12 months. He feels that Dewan Housing is at a very attractive valuation and expects it to touch Rs 400 in the next 15 months.
Below is the edited transcript of Vijay's interview with CNBC-TV18's Udayan Mukerjee and Mitali Mukherjee. Also watch the accompanying video.
I have a buy on Zylog. It is a midsize IT firm based out of Chennai and they are into IT product solutions and services. They have gone into a fairly onsite business model with acquisitions in Dubai, Canada and they are a company that believes in local profits and local geographies through local people, so Obama will like this company. It is a bit different from all other Indian IT companies like TCS and Infosys, who have huge offshore location and because of this Zylog has an excellent per hour billing rate.
In last quarter they had USD 58 per hour billing rate, which is far higher than what the tech biggies show. They have centres in New Jersey and Chennai and large corporation in Dubai and Canada. They had a pretty impressive last quarter, the topline and bottomline went by 16% and 8% quarter on quarter.
I expect the company to close the financial year at an EPS of slightly above Rs 100, Rs 110 is my expectation. The stock is closing around Rs 490. I am giving a target of Rs 1,100 for Zylog in the next 12 months as I feel it will get rerated at some point in time. I am a financial advisor to the company.
On Dewan Housing
Dewan Housing is an interesting stock. People donGet access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.