CMP 884 BSE 15454
TECHNICALS:
- A look at the 2 year Price Charts reveals a definite positive trend over the longer term. Short to medium-term the feel is one of sideways consolidation but, as I said earlier, the bias is positive.
- Multi-year support along the 250 SMA which has never been seriously violated on a closing basis other than on 9/3/2011, where the bounceback was swift. SMA 250 is currently at 732.
- Short term good support at 852 and then at 792. On the upside, resistance at 903 and major resistance at 941. I would like to see it trade above 921 levels for a reasonable period for confirmation of uptrend.
- CRISIL, as we all know, is a premier Global Analytical Company providing services in the niche areas of Ratings, Basic Research, Risk And Policy Advisory Services, and high-end Financial Research . It counts among its clients some of the world's largest Banks and major Corporations. It has Standard And Poor's as its majority shareholder. In short, it is India's leading Ratings Agency.
- The Corporate Performance has been consistently good over the past five odd Quarters with a fair record of growth on both topline as well as bottom line. The only problem I have is with the current valuations at PE (TTM) 34 approx which is rich. Even if it does an EPS of 9 in Q4 of CY 2011 (FY IS THE CY), that would put it at about 31x CY2011E which is not cheap.
- Ideally I wouldn't give it more than 30x CY 2011E and that too is a bit of a stretch, in my opinion. But making allowance for the pedigree, growth possibilities etc, 30x CY 2011 should be the upper end of the Best buy range. This roughly translates to a Buy range of 760-844. Therefore buy it as close to 800 levels as possible (mid range) and hope for 25% returns from those levels in the next 12 -18 months.
Hi Sanjay,
ReplyDeleteExcellent analysis. Currently,the range seems bet 855 to 890. 890 seems a strong resistance. Although, I've full confidence in the pedigree of CRISIL & foresee it to reach around 1100/- when it completes 25 yrs in April 12 & expect a bonus or hefty dividend. I've 2 concerns as well, firstly, most RJ stocks r on a unprecedented hammering spree, particularly VIP & TITAN, which was supposedly the safest. Hope, sincerely, CRISIL is not nxt in line, incase, it does, the hammering will surely bring it down to sub 750 levels. 2ndly, a lil odd that, when the buyback price of 1000/-is goin on till 10th Jan 2012, is the mgmt purposefully, keeping the price down, so they can corner the floating stock. Kindly explain your view.. Thanks... Nikhil
Thanks Nikhil; As I gather( http://www.bseindia.com/stockinfo/anndet.aspx?newsid=b517af9a-d7e7-49a7-ad6e-39fcb33ddab5¶m1=1), the Buyback closed yesterday 30/12/2011. CRISIL corporate pedigree being great, I don't think there is any chance of artificial Price depression at the moment. In fact, gut-feel tells me that we could see a wee bit of a correction in the coming trading sessions to around 840-850 levels or lower.Of course,any dips to 800 or lower would be excellent buying opps; True, VIP and TItan have taken it on the chin as have a lot of other Consumption plays; TITAN on dips could be a good long term buy can't say the same about VIP though. All the best, Nikhil.
ReplyDeleteClarification. What I read, was the acceptance of equity shares within 15 days.!
ReplyDeleteSir,
ReplyDeleteDon't you think your analysis on a share like CRISIL is pretty obvious...? stocks such as this are considered as sure shot multibaggers in the market and that too u are advising it to buy at p/e ratios of 30!!!!I would take much conservative view and ask all to buy ABAN OFFSHORE which is trading at price even less than book value!!!!
Hi Kshitij, my post on CRISIL was in response to a specific Query by a Reader on that Stock.If you have been following this Blog closely you would agree that my view in the last month and a half or so has been that all incremental long term money should be looking at the beaten down broad CapGoods /Infra /Banking space etc. Having said that, one needs to have a fair balance in the long term Portfolio and thus the necessity of the Nestle's, Titan's, CRISIL's of the world. In so far as the Entry Price is concerned, I concede that the valuations are rich, and I have said as much in the Post, but the problem is you will not get stocks like Nestle or Crisil much cheaper any time soon. As for ABAN we'll do a detailed Post on that but it would not be correct to buy solely because it is trading at less than book-value. Best of luck Kshitij and wish you and all other Readers a Happy and prosperous New Year.
ReplyDelete