SP Tulsian's multibagger picks: Bata India, KSB Pumps

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com picks Bata India and KSB Pumps as his multibaggers. Tulsian sets a price target of Rs 1000 to enter Bata India and a price target of Rs 250 for KSB Pumps, both for a period of 12 months.

Below is the verbatim transcript of SP Tulsian's interview on CNBC-TV18 On Bata India
The Bata India management is a bit cautious about how the year may shape up with sales. That is also reflected in the share price of Bata which ruled between Rs 900-950, has made the stock to correct to Rs 750. However, it is better that the management have always kept the hopes a little tempered or at a low scale. Looking at their financial performance for calendar year 2012, things look quite comforting because the company has posted a top line growth of 20 percent with sales of Rs 1875 crore. The operating profit margin has also been maintained at the same level of 20 percent and that has resulted into the earnings per share (EPS) of Rs 27 for calendar year 2012. Also Read: Market in short-term uptrend, go long: Sukhani
We know that Bata is a household name with 1,250 retail outlets. It is India's largest footwear retailer with presence in 500 cities and having 6 manufacturing plants. Very strong brand value. The rural income is going up and the consumption pattern, footwear falls in the category of essentials, with consumption going up, with multiple pairs of the footwear's used by singe person.
Going by the outlook given by management, I am expecting 15 percent growth from the company at least for calendar year 2013 and that should be sufficient enough for the company to keep hopes alive in the share with EPS expected to be between Rs 30-33 for calendar year 2013. Taking all this into account, presently with carnage in the midcap stocks, it is better to focus on quality stocks which have already seen good correction. Since Bata has corrected by about 20 percent, this makes a good entry point with a price target of about Rs 1000 in next 12 months or so.
On KSB Pumps
KSB Pumps has bottomed out and some revival of interest may start coming back into the stock, into this multinational company. This is because the company is into pumps, valves and related systems, having facilities at 5 locations across India. I liked the Q4 numbers of the company. They have their year ending in December and for calendar year 2012 company posted flat topline of about Rs 760 crore against Rs 775 crore for calendar year 2011. However, the operating profit margin for whole year by about 250 bps which was at 7 percent for calendar year 2011 improved to 9.5 percent plus.
Looking at the rise in the operating profit margin for Q4 alone, Q4 numbers have contributed quite well to this performance. Since they cater to the wide spectrum of the industries where replacement demand is also very high, the operating profit margin is likely to move into double digit for calendar year 2013. Rs 18 EPS which the company has posted for 2012 is likely to move to about Rs 22 for 2013 with promoter equity of 67 percent, with 15 percent stake held by five large investors. So, 82 percent is held by promoters and these large investors. The stock looks consistent and a good buy at the current price with price target expectation of about Rs 250 in next one year or so. Disclosure: I have no holdings in the stocks discussed.