Don't see trading hrs' extension this fin year: SP Tulsian

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com, spoke on a few stocks and gave his take on the extension of trading hours.

Here is a verbatim transcript of an exclusive interview with SP Tulsian on CNBC-TV18. Also watch the accompanying video.

Q: A word on the Great Offshore battle. For Bharti , it will now be two offers- mandatory and controlling stake. How do you read the situation right now?
A: This seems to be more of a technical amendment, which they may have to go through. If you recall, Bharti earlier had made the open offer under regulation 10 which got triggered when this stake got raised beyond 15%. However, then they did not seek for the management control which they have now. In the process, they have changed their mind.

I don’t understand the reason how these two offers can run simultaneously because the Securities and Exchange Board of India (SEBI) seems to have given 20 days' time to both the parties to keep their offer open and make the counter bidding or revise the offer for first 10 days. This could just be a technical amendment in the offer, which has already been made by Bharti. Regulation 12 also needs to get incorporated for the open offer.

Q: You track some of these agriculture stocks. Many of these stocks like Meghmani Organics have been moving up because of the Rabi crop not looking bad. Any takeaways or picks in that side?
A: Meghmani Organics, Advanta , Rallis India , Hikal , and Nagarjuna Agrichem had a tough time because we did not have much of the Kharif crop. Now all the hopes are on the Rabi crop, as it is likely to be good. Generally, these companies always post very good performance in first two quarters, which does not seem to be coming through from them. The hopes are getting postponed for the Rabi crop. It is definitely going to be better than Kharif crop.

However, I am not impressed with the valuations which they have all been ruling. They seem to have run ahead of their expected performance, which they are likely to post for next two quarters because generally you are then running a risk of getting stuck in those stocks at higher levels.

Q: You keep an eye on all those stocks which own land parcel where fundamental operations are not very strong yet. Hindustan Motors is a classic case in point. Are there any developments which have happened over the last few weeks on that front because the stock is getting excited again?
A: I don’t think there has been any news on that account because they have only agreed to sell 300 acres of land and still they are sitting on a surplus land of about 330 acres. About three months back, the indications were coming from the management that they are thinking of developing of their own. Due to the rise in real estate value all over in teir I cities like Mumbai and Delhi, there seems to have good value. The way shares have been moving in the last one week, it has risen by about 20%. However, there has been no indication coming with respect to the 330 acres of surplus land which the company is sitting on.

Q: The stock that was very excited yesterday was JSW Steel . Initially it was Nippon Steel , but they said we are not buying any stake. What is happening there?
A: There has been news that the management is thinking of divesting part of the stake for about Rs 2,000 crore. If that happens, it amounts to be close to 10% stake dilution. Looking at the capex plan of the company, I don’t think that even Rs 2,000 crore infusion would serve the purpose. So let us wait for the announcements to come which are expected this afternoon. On the pricing front, share price seems to have run beyond its fundamentals.

Q: What is going on with Austral Coke ? The stock has slipped to Rs 8.80. Is it going to Rs 1? The volumes are still very large.
A: We need to remind our viewers that Rs 10 stock will go to Rs 1. Sometimes people get confused that maybe the stock has spilt to Rs 1. However, I don’t understand the reason why we should not write off these kinds of stocks. In fact, they have all been setting the wrong precedent. There have been many stocks on these lines. I don’t see a worse instance of any stock having behaved in this manner. Hence, one needs to write-off the stock from the list or maybe by all the investors.

Q: On Wednesday, you must have heard the National Stock Exchange (NSE) Managing Director talking about the situation on trading hours' extension. Does it look like it is not going to happen for the moment?
A: Yes I am happy that it’s not likely to happen. They have indicated that unless you have a robust system in place, it will not take place. It has been postponed at least for four-six months. Maybe then it will be given a renewed thought. I don’t think it is going to happen in this financial year.