RIL results may not excite mkt, positive on Sintex: Tulsian

Below is the edited transcript of his interview to CNBC-TV18.

Q: What is your view Goa Carbon it is up today by 11%?

A: There is no specific reason for the up move of this stock but this type of move always happens ahead of the results. This company always comes out with good results as their realisation of Calcined Petroleum Coke (CPC) has been doing quite well.

Q: What is your view on AP Paper? Do you think that the stock has topped out as it has more than doubled in the last six months despite poor results this time?

A: When we looked at the Q4 results we thought that the company is on a turnaround path, but Q1 results are very disappointing. After the take over by the new management, there was a view that conditions could improve but the results posted in last four quarters are horrible. A turnaround may not even happen in the next couple of quarters. I have been maintaining my negative view on the paper stocks.

There is news of delisting or raising of open offer price. Even if the open offer price is allowed, that will go to the shareholders those who have already tendered the share. Earlier, some experts where saying that shares are moving because of increase in the open offer price.

There is a hope that since 75% stake is held by the promoters now they will go for complete delisting and since last time the open offer came at Rs 550, this time the delisting may happen at Rs 350-400. I am not gung-ho considering the Q1 results as of now and on this open offer issues. Definitely, one should exit from the stock and can look to reenter maybe at a level of Rs 260-275.

Q: What is your view the comment made by Sintex management and what price target would you assign to the stock now?

A: I have a confident and positive view with a long term prospects on the stock. The concerns raised are largely revolving around the FCCB liabilities which I repeatedly said that it should not be seen as a big issue. The total liability during March stands at Rs 1,200-1,300 crore along with available cash balance of Rs 700 crore and expected annual cash flow expected of Rs 400-450 crore in FY13. The same thing has been reiterated by the management.

The thinking on FCCB liability will start only from October to March, by that their Q2 results will be out and the global operation, which has been mainly a cause of concern, is also likely to get improved. If they are able to conveniently retire the entire FCCB liability or the entire overseas debt of Rs 1200-1300 crore by March 2013, then the share can move to Rs 100.

Q: What is your view on upcoming Reliance Industries results and what kind of stock movement do you see?

A: I don't expect any improvement in the upcoming results over what we have seen in Q4. The H2 of FY12 was extremely bad.  If you need to take a call on FY13, the H2 results need to be extrapolated. I expect some positive relief to happen on account of the GRM, we may see a marginal increase of 30-50 bps.

I don't think Petro chemical and upstream can give a positive surprise, similar is the casewith finance activity, we are continuing to see good amount of profits coming in from other income or interest income on the surplus of amount of Rs 70,000 crore which the company has deployed. So, overall flat results what we have seen for Q4 which is not going to excite the market.

Q: By when do you expect the diesel price hike to happen and what quantum?

A: I expect the diesel price to rise by next Monday, week beginning July 23. I expect the price hike to be in the range of Rs 3-5, coupled with Rs 50 increase in LPG price. However, I expect kerosene price to remain unchanged as it caters to the BPL or lower strata of the society.

Q: Which stocks would you buy in real estate pack and on which stock would you be most cautious?

A: I am currently cautious on three stocks, DLF , HDIL aand IndiaBulls Real Estate . In DLF, there is news that a deal may happen in case of Aman Resorts or Mumbai property though the stock has been showing a weak trend. One can look at a price of Rs 200 for this stock.

Profit booking and fear of bad results may keep IndiaBulls Real Estate further weak for may be a week or so and then can correct to Rs 55-56 where relook can be made on that stock at those levels.

Q: DCB is down today and do you think there is more downside for this stock?

A: I don't see the stock to cross Rs 50. Results are good but there is an increase in NPA by 15 bps. Though the results are good the asset quality is not tolerable by the market. The only trigger for this stock would be takeover if the stake sale happens by the promoter. The increase in the NPA is a trigger for the stock to correct to Rs 42-43 and again the renewed buying interest may come. 

Q: What is your view on Orchid Chemical ?

A: I have a positive and comforting view on this stock. I don't see any structural problem with the company. Though, some quarters had been bad, but going forward they have a strong presence in Cephalosporin space. This is not a traders stock, but an investors stock with a gain of 35-40% gain in next 6-12 months. The stock can touch Rs 16-170 by March 2013.