SP Tulsian of sptulsian.com, tells CNBC-TV18 that the time was right to take a selective call on public sector banks. Some of his picks are IOB, UCO Bank and Andhra Bank.
Tulsian is also positive on Petronet LNG with the PNGRB rejection of the government's plea. The market analyst points out to the re-bound quality of JP Associates and says that the fine imposed by the court would not affect the stock.
BHEL remains inexplicable to Tulsian who adds that the market either holds the stock in high value or regards it as the weakest. Except for IVRCL and Nagarjuna Construction , Tulsian holds an overall negative outlook on the infrastructure sector.
Below is an edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.
Q: What is your reaction to Petronet LNG’s move today on hopes that the PNGRB might not impose a cap on marketing margins?
A: The move is definitely positive as PNGRB clearly said that the decision does not fall in its jurisdiction and has rejected the plea of the government. So this is an overall positive for all the gas carriers but more so for Petronet LNG which has been buying and selling a lot of LNG.
Investors should overcome their fear on the stock and look at the company’s expansion plans. The company will start its Kochi terminal in the next six months or so, so that is a big positive. I think gradually the share will return to about Rs 160 in the next 30-45 days.
Q: How do you approach stocks like JP Associates which have, of late, been on a bad ride? Can you take a valuation call and buy the stock at Rs 65 because just a few days ago the stock was at Rs 85?
A: When SEBI had implicated the promoters of the company on insider trading three-to- four months ago, the share corrected to Rs 52-53 from Rs 56-58 only to quickly bounce back and return to Rs 80-85 even.
Having witnessed this kind of volatility, one can safely say that Rs 60 looks to be a strong support for the stock on technical as well as on fundamental grounds.
Yes, Monday's news about the Rs 100 crore fine has been very negative, but I am not too disturbed with the fine imposed by the court, as it was towards not allowing the company to set up a 62 MW captive power plant.
But I think still if you take a valuation call, it's a hybrid company with presence in engineering, construction and cement. So Rs 60 looks to be a strong level to make a buy. With a view of three months, I think the risk reward goes in favor of a good amount of returns in that time horizon.
READ MORE ON public sector banks, Petronet LNG, PNGRB, re-bound quality , BHEL, infrastructure, Tulsian
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