SP Tulsian of sptulsian.com in an interview with CNBC-TV18 gave his readings for three multibagger stocks for the day.
On Titagarh Wagons A: Titagarh Wagons is making the railway wagons, bell bridge, castings etc. If you see the performance of the company for first nine months, they have not been able to ramp up their topline. But, if you see their bottomline, there has been about 15% growth coming in. I am expecting that the March quarter which is traditionally the good quarter, plus coupled with the release with the orders from the railways also to meet the targets and all that; or the dispatches of the company are likely to be quite good. Going by the financials, the company has posted profit of about Rs 54 crore and it should be able to post an Earnings Per Share (EPS) of Rs 40 for FY11. This translates into a PE multiple of less than Rs 10. But, I am quite optimistic on the working of the company for FY12, which is likely to post an EPS of close to about Rs 50. If I take that call, share is ruling at PE of less than Rs 8. And, I am quite positive that may be post the Bengal elections, you will see the order flow coming in, which will largely be boosting the companies topline and bottomline for FY12. They should be able to have a larger share of the Wagon release of the railway. On Century Enka A: Century Enka, manufactures polyester and nylon filaments yarns, they also make tyre cord fabrics. They have been contemplating an expansion of about Rs 300 crore and raising their capacity. They are already have three plants, one at Mahad, Pune and Baruch. And if you see the financial performance, the company has an EPS of close to about Rs 27 for nine months with cash EPS of close of about Rs 48. This means that they have a topline of Rs 1,000 crore with cash profit of close to about Rs 100 crore. They should be able to post an annual cash profit of about Rs 100 crore which translates into a market cap of less than about may be Rs 400-430 crore. I am quite positive on the working of the company going ahead, including expectations of some corporate developments. The company will come into fold of Kumar Mangalam Birlas from the BK Birla group that will just be a formality within the family. But, going forward because the company will be completing their expansions, FY12 is likely to be very good. If you see the valuations it is ruling out at PE multiple of Rs 5 to less than Rs 5 and the cash PE multiple of less than Rs 3 on the historic earnings. Going forward, I donDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!