Positive on Adani Power, JSW Energy & Tata Power: Tulsian

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Positive on Adani Power, JSW Energy & Tata Power: Tulsian

SP Tulsian of sptulsian.com has a positive call on stocks like Adani Power, JSW Energy and Tata Power.

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Excerpts from Closing Bell 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 Adani Power BSE | NSE 01/06/12 Are Mutual Funds betting on Adani Power? Other Stocks in this news JSW Energy | Tata Power Company | Coal India | Voltas | Thomas Cook (India) |

Coal India (CIL) has agreed to sign the Fuel Supply Agreements (FSAs) with power firms to ensure sufficient supply of dry fuel, even if the coal miner has to import it.

SP Tulsian of sptulsian.com says, it is extremely positive for all the power producers and all the thermal power projects.

He has a positive call on stocks like Adani Power , JSW Energy and Tata Power .

Also read: Left out of the rally? You can still bet on 3 sectors!

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompany video.

Q: What did you make of the signing of the FSAs between Coal India and the private power companies? At a practical level, do you think it will change the fortunes of the power companies?

A: It is extremely positive for all the power producers and all the thermal power projects. I think that 90% of their problems will get resolved. If you see the December quarter results, especially of Adani Power, inspite of the promoters having good hold on the international market in the coal trading, they have not been able to procure the coal.

Given the situation, one should be taking a positive call on stocks like Adani Power, JSW Energy, Tata Power-those who have gone for the huge capacity additions, ranging from 1,000 MW to maybe about 2,500 to 3,000 MW in this last six months or so.

Q: All of them have moved- Adani Power, Indiabulls Power or a Tata Power, which one would you recommend as a good pick?

A: My first and top pick would be Adani Power. The kind of addition to the power generation capacity the company has made, they will be having a total capacity of 6000 MW by this 31st March. That will be seen quiet big capacity. Followed by JSW Energy and then maybe one can take up a call on Tata Power. So, these three stocks are looking quiet good.

Q: Do you think Voltas deserves the reaction it got today? Do you think there could be more of an upside for the stock from here?

A: I won't justify this upmove purely on fundamentals. The counter has been seeing a lot of shorts, which were all carried forward for last couple of months. Probably the cumulative short covering has come maybe because of some renewed buying or fresh buying having seen in the opening trade.

I don't think that the fundamentals justify this kind of upmove in one go because the results are not very exciting. They have made a one time provision. Even if you knock that off then also you cannot take a positive call to this extent.

Q: Any execution difficulties do you expect for the private power companies in terms of either possible ramp-up in coal production for Coal India or ability to deliver to the coal as they are promising in the FSA?

A: I don't think that there is any problem, except for the ramping-up. I don't think that logistics is really such a big issue. That can really get very well coped up or managed.

The only problem remains whether Coal India can really ramp-up the production. It will be huge allocation. As I said that 11th five year plan, which is expiring on March 31, has seen huge capacity addition. Those who have added the capacity of about 8000-10000 MW in this last six months are starving for the coal. I don't think that there are any problems existing at the level of the power producers or even at the logistic end.

Q: What is your view on Thomas Cook ?

A: The news came ten days back, parent company has confirmed that it is officially going for the stake sale. Since then I have given the valuations of about Rs 76 to Rs 82. Even if you take that kind of valuations, I don't think that the valuations are looking stretched, in fact the parents are expecting much more.

I am expecting that valuations are going to be quite stiff or quite attractive. Taking all- the organisation, the business model, real estate, profitability- I think the Rs 2,000 crore valuation looks quite justified.