Watch the interview of SP Tulsian of sptulsian.com with Anuj Singhal, Latha Venkatesh & Sonia Shenoy on CNBC-TV18, in which he shared his readings and outlook on fundamentals of market and specific stocks.
Below is the verbatim transcript of the interview.
Latha: What is your New Year stock for today?
A: Yes, my today’s stock is Multibase India. In fact this is again as I said that reiteration and reaffirmation of the call which was given by me previously about three and a half months back exactly on September 18th at Rs 461. The stock has already given a gain of 55 percent in three and a half months. But what we do as we say that be caution on the dangerous stocks, so we again reiterate or positive view on the stock as well if the stock moves to a level where investor start again enquiring whether it still has an upside potential or not.
Looking to the product profile and the pedigree of this stock call firstly, it is an MNC with Dow Corning Corporation of France holding 75 percent stake in the company, but apart from that if you really see the business model of the company they are making Polylefin Compound, thermoplastic elastomeric and masterbatches which has the applications in the personal care, automobile, engineering, extremely widely used product. In fact company is having a very strong R&D, R&D from their parents as well as they have their own R&D units at Daman along with their manufacturing plant.
They have their one manufacturing plant at Daman and in fact if you see the financial performance, I won’t be going by year wise or quarter but quickly if I just see the trajectory for FY16 they had an Earning per share (EPS) of about closure to about Rs 8, FY17 EPS was sub Rs 11. FY18 EPS will be around Rs 15 and FY19 EPS will be about Rs 19. That means every year for last four years on the bottom line the have been showing a compound annual growth rate (CAGR) of about 30-33 percent.
If you have these kind of things coming in, I think that stock has extremely positive view going ahead in terms of margin expansion may not be in terms of topline because of the new product introduction and new applications in the various sector. With that view share now ruling at Rs 718, we feel that can move to a level of Rs 860 in six months. Those who wish to have it for the entire 2018 can definitely look for a figure of 4 digit also in the year 2018. But our target of six months is at Rs 860.
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