SP Tulsian cautious on Suzlon, Lanco & GMR; bets on M&M

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SP Tulsian cautious on Suzlon, Lanco & GMR; bets on M&M

SP Tulsian of sptulsian.com says, he will book profits in the infrastructure stocks like Suzlon, Lanco and GMR. However, he is quite optimistic on M&M.

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Excerpts from Closing 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 Suzlon Energy BSE | NSE 29/05/12 Are Mutual Funds betting on Suzlon Energy? Other Stocks in this news Lanco Infratech | GMR Infrastructure | Mahindra and Mahindra |

SP Tulsian of sptulsian.com says, he will book profits in the infrastructure stocks like Suzlon , Lanco and GMR . "There is definitely going to be some correction. I will be cautious in entering in these stocks at these levels," he adds.

However, he is quite optimistic on M&M . "I won't be surprise to see the price of M&M moving to about Rs 780 in next one month or so," he adds.

Also read: SBI, Suzlon good bets for long term investors, says PN Vijay

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: What did you make of Lanco's and GVK's numbers?

A: It seems that market has now started discounting the results. On face of it, the results look negative. If I compare these stocks, where huge debts are lying in the books of the company because of their PPP projects, with realty stocks, the deleveraging of the infra companies can really happen very fast.

Secondly, infra stocks are catching up. If GMR or IVRCL has moved up, obviously GVK, Lanco and NCC have to catch on with that. So, it seems that there is a big disconnect between the results because they are all on the expected lines.

If you take the case of GVK Power, there is huge increase in interest cost by about Rs 100 crore. The market seems to have factored in. Probably that is the reason we are seeing the renewed buying momentum or the interest continuing in these stocks inspite of the flat to poor results.

Q: Would you like to comment on this news that the Reliance KG D6 output may fall to 27 mmscmd?

A: It is an unfortunate thing. If you see the oil and gas segment, it will start taking a hit. When the British Petroleum came in, it was expected that probably things will start improving from April 2012. There was a lot of hope that probably the gas production will again start showing northward momentum. But I don't think that is coming. I think this is very negative because oil and gas sector will keep on depressing the financial performance of the company going forward, even in FY13 as well.

Q: Would you start taking profits here or do you think infrastructure has turned the corner and will probably run away some more given that people are joining in late?

A: As a trader or as a short-term investor, I don't mind taking profit. Suzlon is ruling at around Rs 27-28. I don't think that it can fall below Rs 26. But for a trader even a fall of Rs 2-3 is a big fall. He can look to re-enter at a lower levels.

Similar will be the case with Lanco and GMR. I don't think that you have any hopes or respite for Q4. So, there is definitely going to be some correction. But, yes, if you are holding the long-term view, maybe with a view of 6-12 months, probably one can remain invested. But I don't think that it is there in the minds of the hardcore investors as well. So, I will be cautious in entering in these stocks at these levels.