Refresh your portfolio: Stock ideas by Tulsian for 2012

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Refresh your portfolio: Stock ideas by Tulsian for 2012

SP Tulsian of sptulsian.com in an interview to CNBC-TV18 gave reading and outlook on stocks across various sectors like Reliance, Bajaj Hindustan and Balrampur Chini. He also picked stocks which are expected to be star performers in 2012.

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Excerpts from After the 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

SP Tulsian of sptulsian.com in an interview to CNBC-TV18 gave reading and outlook on stocks across various sectors like Reliance , Bajaj Hindusthan and Balrampur Chini . He also picked stocks which are expected to be star performers in 2012.

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

Q: Are there some selling pressure on Reliance or some other concerns that are being talked about?

A: This has only to do with Q3 results because in H1 their PAT was Rs 11,400 crore and the main concern is on GRMs which is likely to be anywhere between USD 7.50 to USD 8 per barrel. If we go by the advance tax numbers, the company has paid third installment on 15 December and third installment always proves to be quite close to the expected profitability.

It indicates that the company should be able to post Rs 10,600 crore against Rs 11,400 crore in the first half. So, that shows a reduction of about Rs 800 crore in the second half on the bottomline. So, whether that comes straight way in the Q3 or whether that gets staggered under two quarters has to be seen.

But I won't be prepared to accept that their bottomline can slip below Rs 5,000 crore under any circumstances. People are talking about Rs 4,500-4,600 crore, but I don't think that kind of numbers can come in for Q3.

Q: What are you gauging about the sugar cycle going into next year? How would you look at some of these sugar names, the likes of Bajaj Hindusthan and Balrampur Chini?

A: The next cycle which will start in October 2012 and in my view is likely to be very good because we are not going to see production. It is too early to take a call because it can only be seen as a futile attempt. But cane arrears are likely to develop in UP and the amount could be anywhere between Rs 6,000-8,000 crore, so definitely there will be disappointment amongst farmers, they won't go for cultivation of sugarcane in the next season. The movement they harvest in this crushing season they will go for the other crop. That can lead to the lower production of about may be 20 million tonne.

I am just making a hazardous guess for next season that is 2012-13 which will start in October 2012 and that is likely to be a very good period for the sugar industry. I don't know whether any investor can take such a long term call, but under the given circumstances still I'll advice that it is not necessary that one should look for the UP based sugar mill. One should avoid because all the stocks that are available are largely from UP space.

One can look for the non UP space like KCP sugar , Renuka , Ugar Sugar or Sakthi Sugar . I am not saying that one can always take the exposures in the same ratio but Renuka looks good provided somebody has a view of at least about 18 months from here on. In the given scenario, one can wait for 3-4 months. I don't think stocks are going to run up like that. Someone can catch Renuka and get at Rs 21-22 which in my view is unlikely in the next 3 months. That is a better entry point with a long term horizon.

Q: The likes of Tata Coffee , Shrenuj , Patni , Lupin or Petronet LNG have been star outperformers in 2011. When you speak with the management they indicate that there are still better things to come. From this entire lot which ones would you bet on for 2012 or if you have any of your own?

A: I will go with Petronet LNG. I don't think there is story in Patni or Shrenuj. Patni has moved because of the delisting news indicated by the management, so I will only be picking up Petronet LNG. Going forward, apart from IT I will go with pharma and healthcare also. Amongst the healthcare, I will go with two stocks - Apollo Hospitals and Fortis Healthcare .

I don't think that I will be worried on Fortis Healthcare from hereon because it seems to have been bottomed out. Once the deal gets completed they will surpass Apollo Hospitals also in terms of bed capacity which will be at about 12,000 against 8,500 of Apollo Hospitals. In addition to that, I will go with pharma stocks also; one would add stocks like Wockhardt , Orchid Chemicals or Biocon selectively. I am not picking up names like Lupin and Sun Pharma or Cipla which can always be seen as an evergreen stock and can always remains in the portfolio.