Tulsian picks Mayur Uniquoter, MBL Infra as multibaggers

In an interview to CNBC-TV18, SP Tulsian, sptulsian.com picks Mayur Uniquoter and MBL Infrastructures as multibaggers. Tulsian feels that both these stocks can yield multifold returns given a period of six month or so.

Below is the verbatim transcript of SP Tulsian's interview on CNBC-TV18 On Mayur Uniquoters
This is a Jaipur based company that makes artificial leathers and Vinyl PVC. This material is used by the automakers and the footwear industry. The company is supplying to all major automakers including Ford, Chrysler in the US and here in India they supply to Tata, Maruti, Honda, Mahindra and Mahindra (M&M). In the shoe and footwear space, they have clients like Bata and Liberty.
The company has been continuously ramping up their production capacity which is now placed at about 1.9 million meters per month. They have also been ramping up the capacity with the internal accruals, not much debt on the books of the company. Considering the first nine months performance, on a topline of Rs 282 crore, company posted a profit-after-tax (PAT) of Rs 31 crore, which is resulting into earnings per share (EPS) of Rs 37 for nine months.
While the same EPS was at Rs 31 adjusted on the post bonus capital which company issued in the August 2012 in the ratio of 1:1. So, against Rs 31 EPS in FY12, they earned an EPS of Rs 37 for first nine months. This indicates that company is poised to post an EPS of more than Rs 50 for FY13. Going forward for FY14, I am expecting company to post an EPS of close to Rs 60 or so. The continuous demand, capacity increase has been happening and increase in the capacity of all the automakers are leading to the good order flow to the company.
Going by the shareholding pattern, 75 percent is held by the promoters, company has already paid three interim dividends amounting to close to 65 percent. Taking all this into consideration, I also recommended the stock last year, when post August 2012 the company issued 1:1 bonus, at that time it used to rule at more than Rs 400, the price at which it was recommended. So, given a return of close to 100 percent in the last one year maybe 12-15 months, but still that stock has upside potential to move to Rs 500 or so in next six months. Also Read: See downside target of 5500; avoid taking shorts: Sukhani On MBL Infrastructures
This is an infrastructure and construction company based in the eastern part of the country and mainly carries out the work for the highways and roads. They have the PAN India presence and also carry out work for the government organisations and the private sector.
Apart from the roads and highways, they are into infrastructure and factory construction. For first nine months, the company posted a topline of close to Rs 800 crore with EBITDA margin of close to 15 percent which is good for this construction industry with profit after tax (PAT) margin of more than 6 percent. The company earned a PAT of close to Rs 50 crore for first nine months of the FY13 resulting into an EPS of more than Rs 27.
Q4 of these companies are always robust because the completion of the work happens by then even the billings are made by the company till March 31. So, I am expecting that the company should be able to post an earning per share (EPS) of close to Rs 11.50-12 for Q4 which will see the EPS of FY13 at about Rs 40. Going by the present market price, it is ruling at a price to earnings (P/E) multiple of Rs 4-4.50. Even on a price to book, it is ruling at 0.75 times.
The promoter holding is quite respectable at 57 percent and seven investors which are quality investors into the institutional category are holding 27 percent stake in the company. So, close to 85 percent is held between this large investors, promoters’ and considering the order flow with the company, they have a very good control on the cost because of their captive quarry and other raw material available at their end.
I am expecting that the company should be able to do quite well. The EPS of Rs 40 for FY13 can easily move to about 45-46 for FY14 and consistent growth of 12-15 percent a year for next two-three years. Taking all this into consideration, the stock can move to about Rs 210 in next six months or so. Disclosures: I have no holdings or interest in the stocks discussed.