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Thursday, September 17, 2009

HOT PICK: PSL LTD. bse code: 526801

PSL manufactures and supplies spiral welded pipes conforming to American Petroleum Institute (API) standards for oil, gas and water transmission, as well as structural and piling applications for both onshore and offshore sector.

Its subsidiaries include PSL Corrosion Control Services Limited, Pipeline Systems Limited and PSL USA Inc. PSL USA, Inc. and PSL-North America, LLC.


According to sources, the conglomerate expects to establish a large share of the proposed gas pipeline network to be built by GAIL, GSPL, and other domestic players, who have announced proposals to construct pipeline transmission networks worth over Rs 20,000 crore.

PSL's annual pipe manufacturing capacity presently stands at 1,475,000 million tonnes per year.

The Promoters' shareholding stands at a very healthy 49.13% and the PE ratio is only around 8 at cmp of 179. Its Market Cap vs Sales is very attractive as compared to its peers. PSL has a market cap of 700 crs whereas the sales stand at around 3600 crs, which means Sales are around 5 times of the market cap. Now compare this with its peers like Welspun Guj whose market cap is around 4700 crs and Sales of 5800 crs, which means sales is 1.2 times market cap. Another peer Maharastra Seamless has a mkt cap of 2000 crs and sales of 2100 crs, i.e. sales is 1.05 times mkt cap. So as compared to its peers, PSL Ltd appears to be grossly undervalued.

The share is trading at a deep discount to its Highs of around Rs. 555 in December 2007. Very recently, fund house Citigroup Global Market (Mauritius) Pvt Ltd increased its stake in PSL Ltd to 5.38 per cent. The future looks very bright for this company and we can expect this stock to eventually make new highs like peer Jindal Saw is currently making.

Cheers!

16 comments:

Manu said...

Seems to be an excellent stock.
And all the best for for BB3 debut :)

Street said...

Hello Genius...PSL is up today and I agree with you that this stock can be real multibagger stock. It is a sleeping giant and trading very cheap at current price.My own personal long term (2012) target for this stock is above 1000.......we all would love to see you in the Big Boss house and pray that you get selected.I am sending 100 smses daily to 56882 for you from my side. God bless you

Ravi said...

thanks Sir for sharing this info and I wish to see you in BigBoos and I even asked my friends to sms for you.

Pooja said...

navin, i really admire the way you have been running this blog selflessly for years, giving advice to all of us for free...you are really a superstar! i want to take this opportunity to thank you for giving us your time by voting for you in Big Boss 3....i am sending 50 smses daily to 56882 for you. getting the reply from there as "apni rai bhejne ke liye shukriya...." best wishes

Culutre blog said...

Hi Superstar
What are your views on all our old favorite? South Asian Petrochemicals. Is it still a buy at market price???
thanks

Superstar said...

Thank you so much Manu, Street, Ravi & Pooja for your spirited support. I appreciate. Now lets see what the final list of BB housemates is.

Culutre Blog,
I'm glad that some of my old favorites like Aurobindo Pharma, JK Lakshmi have outperformed the market in the last six months. People who invested in Aurobindo Pharma have actually made extraordinary profits. South Asia Petrochem also has recovered from March lows. At current price of 14.30 it is more of a HOLD than a Buy. The June qtr results have been encouraging, but the company has not been consistent in its bottomline performance. So a cautious approach would be prudent. It recently hit a high of 18 which is a very stiff resistence for the stock. Only if it crosses that strongly can an uptrend be confirmed in that stock.

Cheers!

Aman said...

Dear Navin,

What do you suggest for JK lakshmi. Should i hold or sell it at current level. What is the expected target for this & time frame.

Also all the best for BB3

Aman

Siva said...

All the very best Navin for Big Boss.... We are all with you.... Thanks a lot for your Service!!!

Superstar said...

Thanks Siva. Aman, cement sector has been in a strong uptrend and JKLakshmi has gained a lot in the last six months. It would be wise to keep a profit lock of 138 now on this stock and targets could be 180-195 in the medium term, if overall market remains bullish.

Cheers!

Street said...

Hello Superstar Navin...today I booked more than 100% profit in FCS software (bought at 43, sold at 95)based on your advice.Wonderful call! I cannot thank you enuff for it because I needed this money for my sisters wedding in one month.Where can I send you the invitation card?I would also like to send you a profit share cheque if you dont mind. Today bought PSL Ltd.....hope it doubles soon! Thanks a million friend. God bless you

Ravi said...

Hi Sir,
Whats your view on
Gujarat flourochem , I wanted to invest in this for medium term.

Thanks
Ravi

Siva said...

Super *,

What is your view on "Oscar Investments Ltd" :
Promoters holding 69.11%
EPS: 548.32
P/E: 0.77 (<1)
CMP:400
Show me ur view?
--Siva

Superstar said...

The market seems to have entered a phase of correction and it can be pretty steep. So all bets are off at this moment and fresh buying should take place only after the correction is over, which may take from a few days to few weeks.

Cheers!

rkt222 said...

Hi Superstar, I am new to stock market, and wishing to invest for short term gains. Any tips?

Manu said...

hi ,what is the near term and long term target for PSL at this point.

vinod said...

I have been following your blog and would like your views on Hinduja Ventures post the Hathway ipo as they also a big exposure to the TV cable and internet space