Realty a 'no' for 2012, infra lacks value picks: Tulsian

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

Q: Are you picking anything on the fertilizer bunch or is it just a trading move?

A: I have no idea about any moves likely to happen. However, if you need to take call on FACT, NFL, RCF, probably all the PSU fertiliser stocks are moving up but I don’t understand any reason. I don’t think there is any policy initiative likely to happen on urea or any kind of relief because RCF doesn’t need any kind of relief on the government, FACT is a loss making case; NFL is a case of migration from naphtha to gas. So, it’s a mix of thing but I am not aware about any specific news.

Q: Is there anything in the infrastructure space where you believe that there is screaming value at all?

A: I won’t be calling any stocks having screaming value but if I need to pick and choose probably my call will be on IVRCL. We have seen that they are looking to monetize the 1600 acre of land held by the company. Apart from that company has already initiated a move of merger of the IVRCL Assets And Holding Company, which is in fact their infra or maybe the PPP assets like the Chennai desalination plants, all real estate in which the company has been holding close to about 75%. The move has been so pragmatic that the company is extinguishing the equity so on the merged entity basis there won’t be much increase in the equity. And, it means that all the sincere efforts have been initiated by the company and that looks may be an interesting idea.

We had news on GVK Power that they are likely to mobilise maybe USD 400-500 million by shading part stake in their Australian Coal subsidiary which they have acquired maybe couple of months back. However, I will not be too enthusiastic and again same goes for GMR.

In GMR Infra there has been news that they are looking to bid for the Brazil Airport with 51% stake alone, so that will further the balance sheet. Hence, I don’t think there is any screaming value in any of the stocks but IVRCL can get singled out amongst this lot on a selective basis.

Q: Do you think there could be more steam on the upside for Apollo Hospitals?

A: I have been maintaining my positive view on Apollo Hospitals. There were one positive news and one contradictory news that promoters have subscribed the shares at a lower price. And, since that clarification has come that the subscription was made when the face value was Rs 10 and accordingly, the share issue  price was adjusted to about Rs 370 and odd. If you take the case of this company, 8000 beds and about 55-56 hospitals and one of the largest hospital in Asia. So obviously, the kind of growth they have been consistently posting and maybe the performance going ahead, I am keeping my positive view on the stock and expect maybe about 20% rise from hereon in next 6-8 months time.

Q: Is there anything in the real estate space which you will think of as a buy for 2012?

A: Broadly, the real estate sector is looking negative. Anant Raj, which couple of years ago used to be a cash surplus or debt free company, today it is sitting on a debt of about Rs 1500 crore and it is the same with Prestige . If I broadly take the companies like maybe the Indiabulls Real Estate or HDIL or Unitech or even DLF , they are all sitting with huge liability in their books.

You have not seen any kind of debt getting reduced in their book I won’t be taking a call on any of these stocks. There are very few ideas maybe available in this space, which are too tiny or which are too small, which could be one be Ajmera or one could be Marathon So, if you don’t have the comfort overall and the kind of poor off take in all the metropolitan whether you talk of Bombay, NCR or maybe Bangalore, I don’t think that there is going to be any kind of relief or respite for these companies, so definitely a clear avoid for whole of 2012.