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Sunday, January 10, 2010

Nirlon - Small Cap Stock For Mid-Term Investment

Nirlon Ltd. was an industry leader once, slid into loss making category long ago and since then lost its position in the stock market as well as in the industry segment.

It was due to this reason and also the climax of the bearish phase in the stock markets that its share fell to a low of Rs 13.90 in March, 2009 when the market in general formed second and a higher bottom at 8047 on the BSE Sensex. However, from March onwards the markets resumed their long lasting uptrend and this share also started climbing up phasewise and reached a high of Rs 72.25 sometime in August- September, 2009.

Since the share had risen so much in too short a period, it was obvious for it to attract selling in the nature of profit-taking. It therefore, corrected upto Rs48.70 in October, when the maket also fell sharply down.

Nirlon - Small Cap Stock To Buy For Mid-Term InvestmentHowever, the share is showing up-going tendency thereafter and closed at Rs 62 on Friday.

Market Cap 361.52
* EPS (TTM) 0.25
* P/E 248.40
* P/C 101.80
* Book Value 11.46
* Price/Book 5.42
Div(%) 0.00
Div Yield(%) -
Market Lot 1.00
Face Value 10.00
Industry P/E 9.91

The stock looks very expensive in terms of valuations looking at P/E Ratio and earnings. These expensive valuations seem to be on the back of Nirlon business park developed by Nirlon in Mumbai. The stock has shown a distinctive uptrend against the downtrend in the market. Investors willing to take risk can buy stocks for medium-term investing.

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