Multibaggers: SP Tulsian's 2 picks for good returns

SP Tulsian, sptulsian.com has picked up Bliss GVS and Canara Bank as his multibaggers for the day.

On Bliss GVS, he has a price target of about Rs 50 in the next three months.  According to him, Canara Bank has a price target of Rs 375-380 in the next six months or so. Houseviews: Trading tips on 4 buzzing stocks Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Sonia Shenoy. Q: Why have you picked Bliss GVS? A: The company is into anti malaria and OTC drugs. The company has been doing quite well. If you see the financial performance for FY12, they had a profit after tax (PAT) margin of more than 20%, close to about 21%. On a top-line of Rs 260-265 crore, they made a PAT of close to about 53 crore. If you go by their Q1 performance, the PAT margin has improved to about 28% on a top-line of Rs 64 crore. So, for whole of FY13, we should be able to see similar kind of PAT margin. To expand their portfolio, the company has recently acquired 70% stake in a pharmaceutical company by paying Rs 18 crore. So, they will be expanding more in the OTC products where generally if you have a strong brand equity of your product, it always enjoys a very high profit margin. If you see the midcap pharma stocks, you cannot call this company as a pharmaceutical company, but it is mix of both. The company is seeing buying for the last couple of days. I have been keeping a positive stance. I recommended the stock about a year back, when the share was ruling quite low. The process of acquisition of the pharma company should get completed maybe in the next three-four months. So, in the second half, we will be seeing the results from that company also contributing and getting consolidated in the financial results. Apart from that, shareholding is quite low. The company is debt free with promoters’ stake of close to 65%. So, taking all this into account, the stock is a steady and safe stock. One should not expect the stock to double like Shasun Pharmaceuticals, Wockhardt or Stride Arcolab. But one can expect a gradual return, maybe a return of 25% in six months. It can be held for a couple of years also. It can see return of about 30-35% every year. So, I am expecting a price target of about Rs 50 in the next three months. It is a very stable and well-established company. _PAGEBREAK_ Q: Do you think it’s a good time to buy Canara Bank? A: That is right. Fifty-two week low was Rs 306. Since then it has improved or recovered by more than 5%. Now, it is ruling at close to Rs 322. But the kind of pessimism, which we have been seeing on the PSU banking stocks, especially Canara Bank, Bank of Baroda, State Bank of India (SBI), Punjab National Bank (PNB), they have been seeing some short covering. I am not saying that renewed buying interest seem to have returned in these stocks. That has not happened. But the top five-six banks have started seeing some kind of short covering. The stock has seen in the last three days about 5% rise because 52-week low was at Rs 306. If you go by the financial performance, because of the increase in the gross NPA by 25 bps and increase in net NPA by 20 bps for the quarter ending June, the stock has been continuously sliding. But that has been the case practically with all PSU banks, whether the larger PSU banks or the midsize PSU bank. Somewhere you have to find out the bottom, you have to take a conviction call that stock seems to have bottomed out. In this series, I am expecting Bank Nifty to perform well. I expect that Bank Nifty can move back to about 10,700 or so in this series, keeping a positive stance on the series as well. Considering EPS of close to about Rs 70 and book value of the stock will rise to Rs 525 by March 31, 2013, the share is ruling at a PE multiple of close to 4.6 and price 0.6 times. That looks cheapest amongst the banks like PNB, Bank of Baroda, Canara Bank and SBI. It looks to be the cheapest on price to book basis, may not be on price to earning because all are virtually ruling in the same PE multiple close to about 4.5-5.  But on a price to book, it is quite cheap. Positive stance on the Bank Nifty for this series makes this as a short-term buy also. But otherwise also as a portfolio stock, one can expect a price of Rs 375-380 in the next six months or so. Disclosure: I have no investment interest in the stocks discussed.