Feb 20, 2013, 09.52 AM IST
SP Tulsian of sptulsian.com feels that the non-expectation from the Budget there so no major pre-Budget rally in the market. "Budget should give a fillip to the market," adds Tulsian.
In the run up to the Budget, the Indian market on Tuesday, rallied with the Nifty gaining 42 points to close at 5940 and the Sensex gaining 135 points to close at 19636. However, SP Tulsian of sptulsian.com feels that the market may not run up much going into the Budget. "I am expecting the Budget to give a fillip to the market," he says.
Tulsian is bullish on Mahindra and Mahindra ( M&M ) after the gradual increase of 50 paisa in the diesel prices from Friday. "If we have these kind of 16 or 18 increases, you will be knocking off the complete under-recovery on diesel," Tulsian adds.
Below is the verbatim transcript of SP Tulsian's interview on CNBC-TV18
Q: Historical data shows that what happens pre-Budget does have an impact on what happens post Budget in the market. How are you feeling about the way we are moving into this Budget event and how will we come out as a market?
A: I think because of the non-expectations from the people we have not seen the pre-Budget rally happening into the market. People have not been widely talking about that and a lot of confusion on both the ends is positive as well as negative. I am expecting that Budget should give a fillip to the market.
Q: You have picked M&M, is it because you think that hike is not coming or is it something related to the tractor side of the business? Why are you buying that stock?
A: Again, a combination of two-three factors. First, very positive on the agriculture front because we need to. If we are again talking of the increase in gross domestic product (GDP), the contribution has to come from the agriculture also. You can't overlook M&M being the leader in tractor that is one point.
Second, I see a gradual increase of 50 paisa into the diesel prices and we all know that we have seen this second increase. If we have these kind of 16 or 18 increases, you will be knocking off the complete under-recovery on diesel.
So, people have now taken or now you can't justify any increase of excise duty on the diesel car. Since M&M being the leader, you cannot kill the industry by increasing the duties or excise duty on the diesel car because on the other hand you have decided to wipe off the deficit of the diesel under-recovery by gradual increase of 50 paisa. Fortunately, we have been seeing that happening. We presume that this government is going to remain atleast for the next 12 months and even if they are able to make the next 6-8 increases in the similar lines, they will be able to wipe off the under-recovery to 50 percent.
Nifty trend remains up; minor dip in prices is opportunity to buy. Within the up move, there will be choppy conditions
A minor correction in prices saw the Nifty move down, just on the eve of the publication of exit polls on elections to five state assemblies. Markets are in an up trend. We follow the up move while it lasts.
Action in Mahindra and Mahindra
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