Invest in Excel Crop, says SP Tulsian

Invest in Excel Crop, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Excel Crop has corrected on the controversy of Endosulfan which is the product made by the company. In the Geneva convention, it was decided globally that this product will be phased out in the next 5 years, while the Indian government has been asking that five more years should be given for phasing out this product in India. Pursuance to that, public interest litigation has been filed in Supreme Court and it has passed an order on May 13, constituting a committee formed by the government, which will give the judgment on the report in the next 8 weeks."
He further added, "Yesterday, there was news that the report is likely to be made public in next couple of days. It is likely to be favourable because the phasing out cannot be immediate. The company has suspended the production and sale of this product in this last two months and made a provision of Rs 10 crore plus in the accounts of financial year 2011."
"It is, however, learnt that even if we presume that the product will be allowed a cycle of 5 years to get phased out, it will be seen as a positive for the stock. It had corrected to Rs 130-135 couple of months back, and since then, it has been moving up. We traditionally see these agro-chemical companies have their best quarter for June and September."
"If you go by their past performance, FY11 had an EPS of close to about Rs 35 and if we take the manufacturing capacity of the company, about 3 plants having 25% of their turnover coming in from exports, providing for cotton, sugarcane and so many other crops, chemicals and the agro chemicals for herbicides, fungicides. Taking all this into consideration, I do not think that the fear of Endosulfan can really resurface and once that clarity comes in, the stock can really move to about Rs 275-280 because this stock had a high of Rs 325 in the past."
"We are going to see the next two quarters quite positive for the company and we can expect an EPS close to Rs 30 in these two quarters. This share is looking attractive at these levels and one can take an investment call with a view of about 6 months on the stock."