Check out: SP Tulsian's views on Unitech, EPC Irrigations, Welspun, M&M group

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

SP Tulsian of sptulsian.com, in an interview with CNBC-TV18's Mitali Mukherjee and Sonia Shenoy, spoke about his reading of the market and his outlook.

Below is a verbatim transcript of the interview. Also watch the accompanying videos.

Q: What do you like is about EPC Irrigations ?

A: EPC Industries has been acquired by Mahindra and Mahindra (M&M) . They have acquired a stake in the company at Rs 66.50. Pursuant to that, the open offer will be opening next week, maybe on April 8 or 9 with an open offer price of Rs 66. Since the share price is ruling at Rs 99, there will be no response to the open offer, as this is merely a statutory compliance.

If we go by the product profile of the company, they are into micro irrigation making the sprinklers, drip irrigation, pipes, etc. One can broadly compare this company with Jain Irrigation. As of today, the M&M has its presence more into the automobiles and auto ancillary. They are catering directly into the agricultural space by their tractor business. They want to move into this line which is very positive for the company.

If we go by the preferential allotment made by the company to the M&M group, on the enhanced equity of about Rs 17 crore, M&M will be having a stake of 38%, Schroder Credit will hold 32% who has invested into the company for a long time and the original promoter will hold around 16%. Overall, 86% of the stake in the company will be held by these three investors.

Open offer is merely a statutory compliance or formality. There won't be any response to the issue at Rs 66. Effectively, 15-16% stake of the company will remain with the public shareholder. If we go by the present topline of the company, it is at about Rs 100 crore.

With the fund infusion of about more than Rs150 crore made by the M&M via preferential allotment the company, is likely to take a big jump in their topline as well as bottomline. In view of the huge demand for this space, there are very few players available. Because of the pedigree of M&M, the share presently ruling at Rs 99-100 can give a return of about Rs 115 in next 12 months' time.

Q: What about the other M&M group stock, Mahindra Forgings ? There has been some renewed interest in that particular company? Do you see anything peculiar there?

A: About six months back, the company made preferential allotment to QIB at Rs 107. Mahindra and Mahindra (M&M) group have acquired the shares at Rs 137. They were sizeable investments. Over 1 crore shares have been allotted to QIB and close to about 75 lakh shares were allotted to M&M. At that time, we have seen share price moving to about Rs 150.

If we go by the present shareholding pattern, 51% is held by M&M and about 32% is held by the six institutional investors. Close to about 86-87% stakes are held by the institutional investors and M&M. The company had their problem with their overseas subsidiary. They have two overseas subsidiaries and those subsidiaries were making huge losses. Everything seems on track now.

If we see the nine months performance on a consolidated basis, they have an EBITDA of close to about 8.8%. If we go by the presence of the company and the kind of products they make into the forging space like crankshaft, all these products made by the company has a good market share of 30% to 70%.

All these products are catered to two-wheeler, automobile, car, SUV, commercial vehicle and even the agricultural sector like tractors. The company is coming back on the track. The EBITDA margin can get ramped up quite well to over double digit to about 11-12%. I expect the share price to move close to about Rs 120, which his now ruling at Rs 67 and giving a return of close to 60-70%.

Q: The other stock that you have picked up is Welspun India . Only a brave investor can attempt to get into the stock because of the way it's collapsed. What kind of a case can you build here?

A: One would need to analyse the quarterly results posted by the company than a real bravery to make investment in the stock. The FY10 performance the company posted topline of Rs 1,900 crore with EPS of about Rs 22. There weren't any issues involved with the topline of the company for first nine months.

Due to the rising cotton prices, the company has shown a dip in their bottomline. The December quarter has been quite bad. Generally, the company is the largest terry towel maker in the country and second largest in the world. They are largely catering to the high end customers like the five star hotels. They have a fixed price contract which remains valid for a quarter or so.

Largely on that account, they had a hit in the December quarter. I am not expecting very good bounce back or recovery in March quarter as well. If one can take a call for FY12 onwards, the global cotton production is high by 30% in US and about 15% in China. The scenario in the cotton front is likely to be quite stable.

The company might post an EPS of about Rs 18 to Rs 20 for FY12. Due to the poor performance in Q3, the share has taken a dip which used to rule at about Rs 95-100 to as low as Rs 40-41. If we expect an EPS of close to about 17-18 for FY12, it is available at a PE multiple of 2.5 times.

There aren't any issues involved with the company, promoters and with its performance. It is a matter of time which can give a good rerating and valuation to the stock. The shares can move to Rs 60 plus in about next six months' time.

Q: What have you made of the big move seen in Unitech ? There was an influential brokerage report where they stated JP Morgan that the discrepancy between land valuation and stock price is high? How would you approach the stock now? What kind of valuation would you give it?

A: The upside in the stock has been seen because of that report. They have referred that in NCR, the prices have not fallen so much and they have taken the prevailing market price.

If we apply the same principles in companies like DLF , Anant Raj Industries or JP Infra which has a large chunk of holding in NCR of about 3,500 acres of land, part of which has been sold, one can get that kind of valuation for those companies as well. It might be an effect of the report which has revised the valuations upward to about Rs 60.

There is definitely slowdown and that's not the correct way. The prices have not corrected in NCR region, the kind of correction that we have seen in the pockets of the Mumbai region. There is a very slow off take of the properties happening in those regions.

The sales and Rs 3,000 crore cash flows which were likely to accrue were known in the public domain for quite sometime. I am not too enthused by the facts included in the report. I do not holding a very positive view on Unitech.

Q: How much do you think Reliance is good for? A lot of this pullback is being premeditated on the fact that Reliance will lead from the front?

A: At the moment, we see profit booking to start coming at 1,050. There is some uncertainty prevailing on the ramp up or clarity of the exact production in the KG basin gas for FY12 and FY13.

Beyond 1,050, the stock wouldn't have strength to go up. The profit booking can bring it down to the level of about 1,000. For the time being, one can expect a trading range of 1,000 and 1,050 for the stock till expiry.

Q: Could you tell us more about Hindustan Oil Exploration (HOEC) and the kind of moves that it has been seeing of-late? Do you like any of the fertiliser names which have spiked up?

A: There is a positive view on the fertiliser space, either complex fertiliser or pure urea. If we take the complex fertiliser from April 1, 2012, we will see the undertaken price revision. With the new nutrient-based subsidy (NBS) pricing, no confusion and total clarity, Coromandel International , GSFC and Tata Chemicals look quite good.

In the pure urea space, National Fertilizer , RCF and Chambal Fertiliser look good too. There might be talks on decontrolling or NBS pricing to come on surface, for which the secretaries can have a meeting. This can infuse the fresh interest into the stock.

In regard to HOEC, I am unable to accept the logic for the stock to move beyond a point. Generally, they have a larger presence into the gas production where the pricing is capped. With the rising crude prices, the stock won't gain substantially.

This might be more of a trading interest. This stock isn't looking expensive at the current price, but there isn't much upside seen in the stock 205-210. The profit booking can likely bring it down to about 190. Around 190-210 is the range for the stock till expiry.