Moneycontrol
Nov 18, 2016 07:35 PM IST | Source: CNBC-TV18

Mkts may have bottomed out, could gain ahead of expiry: Tulsian

The Indian stock market definitely looks under-owned and SP Tulsian of sptulsian.com tells CNBC-TV18 he will not be surprised to see buying coming back.

The Indian stock market definitely looks under-owned and SP Tulsian of sptulsian.com tells CNBC-TV18 he will not be surprised to see buying coming back.

"I am taking a positive view on the Nifty ahead of the expiry and as I said I won't be surprised to see an aggregate upside of about 100 points from the closing what we have been seeing today," he says, adding, even for December series he is not not keeping a negative bias.

He also shared his take on specific sectors and stocks. 

Below is the verbatim transcript of SP Tulsian’s interview to Anuj Singhal and Latha Venkatesh on CNBC-TV18.

Anuj: The stock of the day is Petronet LNG. It is a stock that you have liked in the past. Looking at the numbers do you think the stock can climb more?

A: Yes, the dramatic turnaround and in fact if you see the H1 numbers and that is if you go from where I have been recommending that yes, the stock looks very good. I don't think that now you have any kind of concern seen in front of the company and if I just go in a very short manner the H1 earnings per share (EPS) of closer to around 12 what the company has posted for the whole of FY16 are definitely seeing quite positive and if you see the situation going forward I am keeping a positive stance on the stock. But stock since having risen so much today by about 8-9 percent I don't think one can take a call now at the current level but yes, maybe if it corrects by about a couple of percent maybe 3-4 percent then that makes a good entry point for the investors.

Latha: Some of those favourite chemical stocks, Bhageria Chemicals, Thirumalai Chemicals all of them are also in this current rush seeing a lot of selling. Would this be a good time to latch on to any of them?

A: Firstly we need to understand the kind of rise which we have seen in these kind of stocks. Number two, you need to break up the stocks into two parts. The four stocks Kiri Industries, Bodal Chemical, Bagheria Chemical and Akshar Chemicals four falls in the dye and dye intermediate space and largely the vinyl sulphone where the prices have risen really very high and in fact if you see Kiri and Bodal they have posted very flat kind of numbers while the results of Bagheria and Akshar Chem were excellent.

In fact Bagheria and Akshar Chem both have shown a growth of almost 100 percent on a sequential basis from Q1 to Q2 while the other two Kiri and Bodal have posted flat numbers. So, obviously this kind of profit booking is likely to be seen. If you come on the other stocks since you have referred of Thirumalai Chemical and IG Petrochemicals let me again go by the product profile phthalic anhydride. Again phthalic anhydride and maleic anhydride again if you see the kind of run up which we have seen in the run up which we have seen in these stocks they have also tripled.

So, sometimes you see that these kind of euphoria building up is not going to last for a very long time. Let them cool off. I am not saying that things have changed negative for these companies but definitely the growth which we are going to see in Q3 are not going to be similar what they have posted in Q2 over Q1 and the best part is that if you take the dye intermediates the major contribution comes from export. And they are not going to get affected which is the worry on the domestic consumption story or maybe the slowing down of the economy and all that.

So, maybe the kind of run up which we have seen in these stocks are now leading to profit booking. Probably things will stabilise in the next couple of days. They have all been seeing profit booking for the last one week. Maybe things will cool off in the next couple of days and then you need to take a reviewed call on the stocks.

Latha: Now for the analysis over the weekend, what would you think investors should pick from the fall in stocks that we have seen?

A: If you see the behaviour of this market of last three days we may interpret that market has been very bullish or we may interpret that the market has been finding bottom and I won't be surprised to take a call which looks very risky or maybe aggressive, I won't be surprised to see Nifty showing a rise of 100 points ahead of the expiry in this next four days because if you really see now the positions are getting cut on the long side of the retail traders either by brokers about 3-4 days back and now by the traders themselves.

If you really take a call now market is definitely seen under owned and I won't be surprised to see the buying coming back. We have all been talked of the negatives which has happened because of the demonetisation and I don't want to elaborate that but if you just ask the other side of the people many of them have not gone for exchange of notes but there is no shortage of cash withdrawal. You can draw Rs 24,000 from your saving account and Rs 50,000 from your current account. So, yes, the situation specifically coming on the market that I am taking a positive view on the Nifty ahead of the expiry and as I said I won't be surprised to see an aggregate upside of about 100 points from the closing what we have been seeing today. And situation thereafter for December series I am not keeping a negative bias.

Just to give you an example till yesterday people were unanimously short on cement stocks and today if we are showing any kind of revival we may call it short covering, I am not saying that things are seeing renewed buying. So, this change of sentiments can happen in 24 hours. The same thing has happened in case of Non-Banking Financial Company (NBFCs) and housing finance companies. We have not seen them correcting, none of the housing finance companies have corrected in this last couple of days. So, my overall view of the market is that it seems to have bottomed out and now maybe on technical factors it will rise in the next four days ahead of expiry but keeping a positive stance on the market for December series.

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