Jan 20, 2012, 09.04 PM | Source: CNBC-TV18
SP Tulsian of sptulsian.com is positive on capital goods sector and Exide Industries.
SP Tulsian (more)
CEO, sptulsian.com | Capital Expertise: Equity - Fundamental ,IPO
He says, Exide’s numbers have surpassed the expectations. “From hereon, I am positive on the stock. The stock has corrected close to about Rs 100. It is now ruling at about Rs 125. I am expecting that probably next month or so the stock can move to about Rs 140,” he adds.
He is expecting all capital goods stocks to perform well and maybe post better results. "I am holding positive view on the sector," he adds.
Below is the edited transcript of his interview CNBC-TV18's Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying videos.
Q: What did you make of Exide’s number? How much more of a relief do you expect on the stock?
A: I am pleased with the numbers. It has surpassed the expectations. They have posted good operating profit margin. From hereon, I am positive on the stock. The stock has corrected close to about Rs 100. It is now ruling at about Rs 125. I am expecting that probably next month or so the stock can move to about Rs 140.
Q: What did you make of the environmental clearance that Indiabulls Real Estate has got on their big project? How big an up is it for it?
A: I won’t take it as such a big trigger that it can justify a move of about 10-12% in the stock price. I think it has more to do with the off take or sales, which are in fact very sluggish. Indiabulls Real Estate has its presence in the central part of Mumbai. There the off take or the sales of the real estate is really very sluggish.
The stock can cool down. It was hugely oversold. Since it has corrected in the last couple months, people have been consistently taking a secular negative call on the stock. So, huge shorts have been built up in the stock. So, I think this has more to do with the short covering rather than the fresh buying.
The stock should take a pause at about Rs 66-68, because the run-up has already happened in the stock price. Once we see the Q3 results, the stock can start correcting again from thereon.
Q: All set for Reliance . Any surprises expected?
A: It is very strange. I am on the other side of the camp. I have estimated a PAT of Rs 5,175. I am unable reconcile myself with the broad consensus of Rs 4,500 crore. I am unable to accept that petchem and upstream will disappoint. Even the treasury will have same kind of income, maybe slightly higher.
The disappointment can only happen on the refining front where I am expecting that GRM will be USD 6.8. That should drag down the EBITDA earning before interest in tax to about Rs 2,300 crore. Taking these into account I don’t think PAT can really fall below that. It is more supported by the advance tax numbers also because I try to correlate always the Q3 results with the advance tax numbers also. Three installments being paid by the company also indicates that probably the PAT has to be anywhere between Rs 5,000-5,200 crore, if I need to take a broad range.
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