Find out: Tulsian's take on Pipavav, Suzlon, Parsvnath

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SP Tulsian, sptulsian.com in an interview to CNBC-TV18 shares views on stocks across various sectors. He gave outlook for stocks like Pipavav Defence , Parsvnath Developers , Suzlon Energy and others.

Below is the edited transcript of Tulsian's interview with CNBC-TV18. Also watch the accompanying video.

Q: What is your view on Pipavav Defence? What you made of the deal, the little that is known today?

A: There are two positive things, firstly the 10% stake of diluted equity, which is about Rs 8 crore plus shares will get issued at a stiff valuation of about Rs 110. Secondly, this is a strategic investor who has expressed the intention of putting money in tranches of 5% each. So, the stiff valuation gives confidence.

Their present market cap of Rs 4,000 crore will get additional amount if entire 10% gets placed. It will see another infusion of about Rs 900 crore. That will be very positive and that would be taking valuations of the company little higher. So, one has to wait for the deal to get concluded, at least the first tranche, which is likely to happen in the first week of December.

Q: What is going so badly on the Parsvnath Developers? The promoter pledge issue is there with a whole lot of companies but this one slipped 20% day after day?

A: We haven't seen any alternate arrangement being made by them. I don't want to name those eight-10 companies which have given alternate comfort either in the form of margin or getting that position shifted to other financiers or arranging finance from their own sources. That is not the case with Parsvnath Developers and there is still pain left in 30-40 companies of this category and cadre.

Today, on BSE about 30-40 companies were down by about 20-10% downcircuit depends on the circuit band which applies to each of the scrip. They all fall in the category where promoters are very weak and are not able to do alternate financing arrangements. In majority of cases like the operator-driven kind of stock we have seen huge speculative activity happening earlier.

We keep hearing that lot of so called operators are stuck in those stocks. So, this trend will continue in these kinds of stocks where promoters are not able to make alternate arrangement. They may say that we are not involved, our stake is not pledged but it is promoter's equity or benami holdings which are sold due to problem of promoters in the huge financial mess.

Q: What did you takeaway from what the Suzlon management said today?

A: The words were little comforting and the projections were given by the management seems to be ambitious. They said that they will be having debt equity of 1 by FY13 year end which means by March 13 that is 18 months from now. If they are able to achieve that, it will be a big positive for the stock. But I have my doubts that market will accept that so quickly. So, near term concerns will remain.

Because of Tulsi Tanti's comforting words, body language and confidence has probably given a base of about Rs 20 to the stock. It was earlier expected that REpower has a cash of about USD 1 billion but now we learn that the amount is about USD 1.5 billion.

Their total loan stands at about USD 2.5 billion and that doesn't give such a precarious financial situation. It may be positive but one needs to have a longer term time horizon of six to twelve months. I feel that Rs 20 looks a strong support for the company on a pure fundamental basis.

Q: What is your take on the textile space? We first saw Arvind crack down quite a bit, then S Kumars , today it was Bombay Rayon and now S Kumars is seeing a recovery. How would you move on this entire sector?

A: If I take an individual call, Arvind has to move in the range of about Rs 85-95. As I have been maintaining, I don't see much upside. It will be difficult for the stock to even breach three digit marks considering the expected EPS of Rs 10.

S Kumars has taken much more hammering than required. I don't think that their financial performance has been a disappointment. But there were some financing issues. The promoters say that everything has been offered to the collateral. As I said earlier it is not exactly directly in respect to the promoter share but there are definitely in the system the huge amount of shares having pledged and the finance have been availed against that.

My view on Bombay Rayon is very cautious. Here one has to see the difference between cash and future and option. Future and option is ruling at a discount of Rs 25 and I don't think that that kind of discount is warranted. That means the future view on the stock is very negative.

Whenever any kind of news comes in the stock can fall below Rs 230-240. This can be seen as price management but I am not at all comfortable with Bombay Rayon considering the difference in F&O. Cash is ruling at Rs 286, F&O is ruling at around Rs 260, so that's a clear-cut case of negative view on the stock going ahead.

Q: Between Titan and VIP would you buy anything at lower levels or do you expect both of them to sink further from here?

A: I'll totally give a pass to VIP Industries. I don't think it justifies the valuation of Rs 75 considering their major component of import and the way currency has depreciated. So, I will remain away. But if Titan falls below Rs 180, one can take a call from a technical and fundamental basis with a view to earn about 10% in next one month or so.