Renuka, Sakthi turn sweet; Sesa Goa is hot magnet: Tulsian

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

Q: Is the worst of the price correction in for the cement stocks or will this correction drag a bit longer?

A: I maintain my negative stance on Century Textiles and JP Associates on the quantum. I do not think that the technical positions seen in the last one week have unwound, but in the case of ACC and Ambuja Cements there is a strong grip of the short-term traders.

This morning ACC held at Rs 1,230-1,235 on short-term technical forces or the management staving off the effect of the damages. But that may not happen in the case of JP Associates and Century Textiles.

So a negative view maybe taken on JP Associates, Century Textiles and India Cement which at Rs 78 is seen to be a good support and has been witnessing good buying for last week or so ahead of the CCI order. The stock can also be considered for creating long positions at these levels.

Q: Sugar stocks have seen quite a run today. Shree Renuka is up almost about 7-8% this week. Is there more on the trading side there?

A: Yes, I think so. Shree Renuka will start its crushing season very soon. One of the units has already started the production. A weakening rupee and a firm white sugar prices at about USD 600 are making the realisations better in India.

With the off-season, the inventories are also seeing better realisations especially in the western and southern parts of the country. I will hold a positive outlook in the short-term on Renuka and Sakthi Sugars , but not on the UP-based sugar mills.

Q3: Jubilant Foodworks has corrected quite a bit today. SEBI is conducting a probe on stock manipulation by the promoters. How would you approach this stock?

A: I have maintained allegations of manipulation for the last six months coupled with the fundamental valuation. The price movement and the kind of unloading by the promoters in small portions of 2-3% are suspicious. Though it is difficult to allege the involvement of promoters in the run-up, one can definitely say that the fundamentals don't justify this kind of valuations.

Increased volatility was also observed in the stock and a couple of months ago it used to trade in the range of Rs 850-1,000 and fluctuate by Rs 100-150 within a week's time. Now the fluctuations are by Rs 1,100 to Rs 1,200. So if the inquiry finds anything fishy, the stock can correct to a great extent and fall to about Rs 600-700.

Q: Do you expect the Sesa - Sterlite merger to go through smoothly?

A: I think this is likely to go through. But the promoters that the Vedanta Group have to consider that the group does not have a reputation of being on good and friendly terms with its public investors. But I do not think that the merger will be stalled.

The promoters should take into consideration that the transfer of the Cairn 's holding into the Sesa-Sterlite at Rs 395 per share, assuming the rate of the Vedanta Aluminium merger with Madras Aluminium which is now a delisted company, will offer very poor valuations to the shareholders of Madras Aluminium.