The best buys for the day, market analyst SP Tulsian of sptulsian.com, points out on CNBC-TV18, are Petronet and IGL irrespective of the Delhi High Court’s decision to be issued on May 3.
Q: What’s the problem with Sintex? Is the price level good to buy it again or are you cautious?
A: The stock equally surprises me too. The market felt that the company will reverse its forex losses in Q4. But the renewed negative call on the rupee forecasting its rise to to 54-55 has brought back the forex loan problems to the company.
Though there is pressure on the margins, the stock cannot fall beyond a price level of Rs 70-75.
So in my view, considering all the negatives, including the future impact of currency, weakness due to the forex loans and depressed margins in the coming two quarters, I feel that stock will see the renewed buying interest at about Rs 70.
Q: Is there any news or any pressure expected on GAIL? Why is it sitting at a 52-week low?
A: I don't know, again it is very strange. It is difficult for investors to believe that a stock can continue to rule at Rs 330 on the charts.
It could be the effect of waiting for the Petroleum and Natural Gas Regulatory Board (PNGRB) order, set to be issued on December 3 and definitely a boost for IGL, which remains to be seen as a positive.
Otherwise I don't know any other reason for such a big fall. Either the market is taking big concerns on their core business or the investors are exiting the stock.
Q: The news from PNGRB has hit IGL sending down 42% and impacting the sentiments of Petronet. Is this a good opportunity to buy or do you think one should wait till the hangover of the news to lift?
A: Definitely it is a good opportunity. I prefer to buy Petronet LNG at Rs 130 because that makes a good investment bet at this point of time. Brave investors could buy IGL ahead of the Delhi High Court hearing fixed for May 3 when I expect PNGRB's retrospective order to be quashed.
That could take the share price to move to Rs 240 and even if the judgment doesn't come, the hearing is further adjourned or no relief comes in favour of IGL, I see very limited downside from hereon because the level of Rs 200 looks to be a very strong support for IGL.
In the present situation, the PNGRB order stands. So probably IGL looks to be a good buy for traders. Those who want to play safe can go for the Rs 200 - 220 call for the May series. But yes, Petronet LNG looks very good at Rs 130 as an investment buy.
Q: Infrastructure stocks like GMR, GVK have seen a lot of selloff. How would you react to Punj Lloyd which is up 7% today?
A: I have been maintaining my negative view on the stock based on the company's financial performance for the last four quarters, which has been troubled by margin compression, and working capital pressure.
Any upside movemement in the stock is sporadic and will not last. So any rally of this kind is best for making an exit.
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