Nagarjuna, Sintex, IVRCL are good bets: Tulsian

Below is an edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.

Q: We were just discussing Reliance on the charts. There is, of course, fresh news that the arbitration process is going to start soon and that the government or the oil ministry is in no mood to allow them to recover cost of more than USD 2 billion.

What according to you is the fate of the stock? Would you sell it at current levels?

A: I don't think that the arbitration proceedings or the litigation will be seen as a negative for the stock.

If you take a call on the share buyback upto April 30, the company bought back slightly lower than 72 lakh shares which is 6% of the enabling provisions passed for 12 crore shares.

So if you see the price at which it has been bought, about Rs 748 per share, the process of share buyback will keep continuing because in April alone the company has bought back close to about 30 lakh shares.

So I think the pace will continue and get completed in the next eight-to-nine months.The  buyback will act as a good support to the stock at Rs 720-725. Inspite of posting poor Q4 numbers, the share has not corrected well.

I was expecting it to fall to about Rs 710-715, but it did not really fall. The level of Rs 725 really acted as a strong support. 

Q: VIP has reacted very badly to the results. How would you look at it now?

A: I don't think its too comforting because the weakening rupee will definitely be a big dent on profitability as a major portion of their products are imported and that has begun to put a lot of pressure on the margins.

The company is unable to cope with the kind of competition from other players in the luggage space. The price behaviour of the stock for last three months was because of trading factors or technical reasons rather than fundamentals.

Fundamental weakness was already established maybe three-four months ago and is likely to remain even over the next two quarter.

Q: IRB Infra has been quite a talking point in today's trade as it recovered from the day's low of nearly around 17% odd in terms of losses and is now down around 10%. What did you make of all the news that's doing the rounds?

A: I am not comfortable with the price behaviour of this stock. If you recall three-to-four months ago when the inter-se transfer of the stock happened between the promoters, the share fell to about Rs 145-150 and huge block deals were witnessed.

Reliance Life Insurance acquired a share in the company at Rs 160-165 and then suddenly after a month or the share moved back to Rs 200 for no fundamental reason.

So if you take a call on pure fundamental basis, there are a lot of concerns on their Ahmedabad projects which were acquired at very expensive valuations.

So taking all this into consideration, one can say that the kind of ownership pattern and the kind of trading pattern could be attributed to margin call pressure or maybe the kind of accommodation investments made by large investors at the behest of the promoter.

It is very difficult to substantiate and prove that, but the things are quite discomforting on the stock. Even at the current level, this share may move back to about Rs 170-175 , but I don’t think that that will really be sustainable at higher levels.