Pick Excel Crop, Williamson Magor & Mahindra Ugine:Tulsian

SP Tulsian of sptulsian.com joins CNBC-TV18 to pick stocks that he says are multi-baggers for the day. He sees value in Excel Crop, Williamson Magor and Mahindra Ugine.

On Excel Crop : The stock has corrected on the controversy of Endosulfan which is the product made by the company. In the Geneva convention, it was decided globally that this product will be phased out in the next 5 years, while the Indian government has been asking that five more years should be given for phasing out this product in India. Pursuance to that, public interest litigation has been filed in Supreme Court and it has passed an order on May 13, constituting a committee formed by the government, which will give the judgment or the report in the next 8 weeks. Yesterday, there was news that the report is likely to be made public in next couple of days. It is likely to be favourable because the phasing out cannot be immediate. The company has suspended the production and sale of this product in this last two months and made a provision of Rs 10 crore plus in the accounts of financial year 2011. It is, however, learnt that even if we presume that the product will be allowed a cycle of 5 years to get phased out, it will be seen as a positive for the stock. It had corrected to Rs 130-135 couple of months back, and since then, it has been moving up. We traditionally see these agro-chemical companies have their best quarter for June and September. If you go by their past performance, FY11 had an EPS of close to about Rs 35 and if we take the manufacturing capacity of the company, about 3 plants having 25% of their turnover coming in from exports, providing for cotton, sugarcane and so many other crops, chemicals and the agro chemicals for herbicides, fungicides. Taking all this into consideration, I do not think that the fear of Endosulfan can really resurface and once that clarity comes in, the stock can really move to about Rs 275-280 because this stock had a high of Rs 325 in the past. We are going to see the next two quarters quite positive for the company and we can expect an EPS close to Rs 30 in these two quarters. This share is looking attractive at these levels and one can take an investment call with a view of about 6 months on the stock. On Williamson Magor: This is a very interesting play because we have a trend of hiving of the investment arm by all the groups and companies. In fact, there are at least 50 investment companies which are available, listed, and ruling at about 25-50% of its NAV. Williamson Magor is a very interesting play. If you see the shares held by the company, about 1.16 crore shares of Mcleod Russel are held by the company which offers a value at current market price of about Rs 325 crore. Apart from that, they are holding 1.68 crore shares of Eveready Industries, the market value of which is about Rs 75 crore. They also hold Kilburn Engineering, Mcnally Bharat, and even Williamson Magor Financial Services and all others. If you take all these investments, the value comes to about Rs 500 crore for all these stocks. The company