SP Tulsian's multibaggers: Fresenius Kabi, ING Vysya Bank

SP Tulsian of sptulsian.com is bullish on Fresenius Kabi and ING Vysya Bank given their strong fundamentals. He expects Fresenius Kabi to benefit from the recent Sebi order and has a near-term target of Rs 140. He sees ING Vysya Bank touching about Rs 700 in the next six months or so.

Also Read: Tater's multibaggers: Sona Koyo, Tilaknagar Industries Below is the verbatim transcript of SP Tulsian's interview on CNBC-TV18 On Fresenius Kabi
Two reasons for giving this recommendation, first on fundamentals and second is the Sebi order. If I quickly touch upon the fundamentals this is the leading company making chemotherapeutic drugs that is for cancer from development, manufacturing and marketing across the globe.
They have two manufacturing plants, one at Baddi in Himachal Pradesh and second in Kalyani near Kolkata. The financial performance for FY13 has been good with top-line of Rs 600 crore, EPS of Rs 5, PAT of Rs 80 crore and EBITDA of Rs 106 crore.
What has happened in the past, the promoters have reduced their stake from 90 to 81 percent and then thereafter Sebi passed the order for minimum public shareholding norms. They had litigations, but I am not going into the background. Finally, yesterday evening Sebi granted them permissions to go ahead with delisting, but with a condition that the pre-OFS that is the 90 percent stake which the promoters held earlier, as I said that with Offer For Sale (OFS) they have reduced their stake to 81 percent, but Sebi said that if you want to go ahead with the delisting move, your promoter shareholding will be taken at 90 percent.
So you have to mop up 5.01 from the market, that is your holding should rise to 95.01 percent stake after the delisting move and against that the company is now holding 81 percent stake. So 14.01 percent stake has to be acquired by the promoters to make the delisting successful.
In the past, the promoters had indicated a price of Rs 130 as the indicative price for delisting which now will not hold. So two options before the promoters if they are really serious, if they want to go ahead with the delisting plans then they will not get the share maybe at a price of even Rs 175-200 or I will not be hesitating in saying that the share can even breach Rs 200 if serious delisting move is initiated by the promoters.
Alternatively if they do not move with the delisting plan they have to bring it down to 75 percent within the stipulated time. So purely a fundamental call thereafter, that also gives you a potential. So maybe the upside will be seen in the stock for the next three months if they are serious in the delisting plan. Those who are holding the share can look for a price of Rs 160-170 also. Those who want to play on this idea now can enter into the stock at the current price.
Share is ruling at Rs 110, even if you get it at Rs 120-125 I think it is worth playing on this idea and one can look for a near-term target of Rs 140. Disclosure: SP Tulsian has no holding or interests in both stocks.

_PAGEBREAK_ On ING Vysya Bank
I liked ING Vysya's numbers. The bank has posted NIM of about Rs 425 crore, PAT of Rs 175 crore and if you take the EPS of Rs 11.25 for the first quarter against Rs 40 EPS they have posted for FY13, that means even if I annualise this 11.25 which is likely to be higher, because of capital infusion in the later part of this quarter, one can expect an EPS of Rs 45-46, that means they are likely to post a growth of about maybe 13-15 percent on the bottom-line.
Considering the present situation of all private sector banks I do not think that this kind of growth will be seen negative or disappointing by the market. If you take a fundamental call, PE multiple is close to about Rs 12 if I calculate on the expected EPS of Rs 46. Price-to-book, the net worth of the company will rise to Rs 5,000 crore by March 31, 2014. If you calculate price-to-book as on March 31, 2014, it will be at about 1.7 which is now at 1.9 and within the good network of about 530 branches across the board and they are catering to about 2 million customers with 44 percent promoter stake, 44 percent institutional investors stake.
So actually I am keeping a positive view on private sector banking stocks going forward. So one can again expect a price of about Rs 700 in the next six months or so.