SP Tulsian's multibaggers: Selan and Solar Industries

SP Tulsian of sptulsian.com picks Selan Exploration and Solar Industries as his multibagger ideas for the day. He sees both stocks returning well over a six to eight month horizon.

In his chat with CNBC-TV18, he also opines on the effect of Lokayukta report on the companies named in the report, and analyses ICICI Bank's recent acquisition of stake through pledged shares in GTL's tower business. Below is edited transcript of his comments. Also watch the accompanying video. On Selan Exploration:
Selan Exploration is into oil exploration. Though not a very big company, they produce about 3 lakh barrels of crude oil per year from their two operational blocks at Gujarat. Two more has already undergone 3i seismic studies and in my view, they should be operational in the next 6 to 8 months. Going forward, company should be able to ramp up production by about 50-100% in the next couple of years.
As for the financial position of the company, Selan Exploration is sitting on a cash balance of about Rs 100 crore. So they do not have to borrow any thing for this research and exploration survey activity. That translates into Rs 60 per share and if you see the financial performance for FY11, they posted an EPS of close to about Rs 18 with topline of about Rs 75 to 80 crore.
With the market cap of about Rs 550 crore and an enterprise value, if I knock out the cash held by the company, of about Rs 450 crore, and aided by the gradual upside we have been seeing in the crude prices, I think this can be a steady stock to hold in the portfolio. One can expect a price of about Rs 415 in the next 6 to 8 months time. On Solar Industries:
Solar Industries is into making explosives and initiating devices used by infrastructure, mining and construction companies. If you look at the Q1 performance of the company, it indicates a growth of about 33% and the company has about 16 plants in the country with presence in 8 states where mining activities are carried out in a very big way. Apart from that, they have moved into Africa and Europe and that is showing considerable progress. With the kind of requirement which we see for mining in Africa, I think this is going to be a big kicker for the stock in terms of increase in top-line and bottom-line. Taking that into account, I am expecting that FY12 could have a top-line of close to Rs 1000 crore with EPS of Rs 60 per share.
If I go by the shareholding pattern, it is quite comforting - 75% promoter stake, 15% held by three-four well-known mutual funds and about 7% is held by HNIs who are associates and close to the management. There is a very low public float of about 3%.
Solar is a debt free company and has been recording very good performance. The share is available at a PE multiple of 10.5-11 times on FY12 estimated earnings, which is expected to take the share price to about Rs 1000 in the next to 6 to 8 months time. Q: ICICI Bank recently got close to 30% in GTL from conversion or pledge of shares. How do you read this development?
A: The market has reacted positively to this news, but I don