Tulsian's multibaggers: Lloyd Electric, Mayur Uniquoters

In an interview to CNBC-TV18 SP Tulsian of sptulsian.com picked two multibagger stocks and shared his outlook on the same. He is positive on Lloyd Electric & Engineering and Mayur Uniquoters.

On Lloyd Electric & Engineering
This company seems to have good business model. They are the leaders in making coils and heat exchangers for the air conditioning industry. Apart from that, they have gone into the marketing of the window and split AC also. They have also setup a new plant at Himachal Pradesh with a capacity of 3 lakh ACs per annum.
But if you see their core business of heat transfer coils and heat exchangers which they are making, they are catering to practically all the air conditioning makers. They are catering to Voltas, Blue Star, Hitachi, Daikin, LG and apart from that they are catering to the industrial and public sectors also like the Railways.
Their financial performance for Q1 FY12 has been quite satisfactory. They have a top-line of close to about Rs 300 crore with profit after tax (PAT) of Rs 15 crore with an earnings per share (EPS) of Rs 4.85 for the quarter. Generally their Q1 and last quarter post very good results.
For FY13, the company should be able to post an EPS of close to about Rs 15. That makes the share presently to rule at a PE multiple of 4.5. For last one month we have seen a good appreciation or good rise in the share price which used to rule at about Rs 50-54. The share price has now moved to Rs 66-67. Inspite of such a huge rise, the share is now ruling at a PE of 4.5. The book value of the company is at about Rs.155 as on 30th June. So, I am quite upbeat on this. We have seen the improvement in the financial performance of all the air conditioner makers, more specifically, Voltas and Blue Star.
I am expecting that this company, catering to their components and their main heart products for the air conditioners, is also likely to do quite well . Taking that into account, I think that maybe shares can move to about Rs 85 in next six months or so. On Mayur Uniquoters
This is a very good company. I recommended this stock at Rs 400 about a year ago and today it is Rs 400 after ex-bonus 1:1. So, already it has given an appreciation of close to about 100 percent in less than 8 or 9 months.
The company is the leading maker of the artificial leather, PVC which is used by the leather and auto makers. The company is supplying to Ford and Chrysler in US. They are supplying to all the car makers in India, like Tata Motors, Maruti, Mahindra & Mahindra.  They have all of these companies as their clients and apart from that, they are supplying to Bata, Liberty, Action Group and other companies who are into footwear.
Gradually the company has moved into the integrated operations. They have started their new unit going into the backward textile coating plants and it is a debt free company. The company has posted a top-line of close to about Rs 90 crore with PAT of Rs 9 crore plus with an EPS of close to about sub-Rs 9.
The capacity expansion has happened as a backward integration and that is going to improve their margin performance. The capacity of the company is presently at about 19 lakh meter per month of this artificial leather and that is going to get ramped up maybe about 21-22 lakh per meter after this backward vertical integration.
So, I am expecting that the company may be able to post an EPS of close to Rs 40 for FY13 that is after 1:1 bonus. The share has gone ex-bonus in about couple of months back and the equity has increased from Rs 5 crore plus to Rs 10 crore plus.
The promoter stake is quite respectable at 75 percent and the company is enjoying the debt free status in spite of the continuous expansions, which they have been doing for last couple of years. The company has not availed a single rupee as debt, so it continues to enjoy the debt free status and very good cash profitability. The volumes also have reasonably traded. The share has about 10,000-15,000 shares of the stocks daily traded on the stock exchanges. So I am expecting that the share can move to about Rs 500 in six months, but if somebody keeps a horizon of even couple of years, I will not be surprised to see the share doubling in next 12-18 months from here. That is, a target of Rs 800. Disclosure: I have no holdings in the stocks discussed.