SP Tulsian evaluates Dhanlaxmi Bank, Wockhardt, ITI

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SP Tulsian evaluates Dhanlaxmi Bank, Wockhardt, ITI

SP Tulsian of sptulsian.com in an interview to CNBC-TV18 citied views on stocks across various sectors. He gave reading for stocks like Dhanlaxmi Bank, Wockhardt, ITI and fertiliser stocks.

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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

SP Tulsian of sptulsian.com in an interview to CNBC-TV18 citied views on stocks across various sectors. He gave reading for stocks like Dhanlaxmi Bank , Wockhardt , ITI and fertiliser stocks.

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

Q: What did you make of the news on Dhanlaxmi Bank? The stock slipped 12.5% despite management's clarification on allegations from the union? Would you take them seriously?

A: I don't think allegations of union seem to be very serious, but one cannot overlook. But if one looks at the financials and the growth of the bank, I don't think the allegations which have been leveled can exist. In this atmosphere such adverse news or suspicion creates a bit cautious approach on the stock.

Q: What did you make of the move on Wockhardt? How do you see the stock move from here?

A: This is a very positive move because disputes have been lingering for quite some time. Earlier court was not very happy with the formula which the company has been presenting. But now it seems that company has become serious about it. It seems that unless until they discharge liability things won't move on and that is likely to happen.

Their nutrition business when sold will give them huge inflow of Rs 600 crore into the Indian companies and Rs 600 crore in their overseas subsidiary. That will be a big booster for the stock. Once the FCCB liability which is to the extent of about USD 100 million gets settled then company would come back on the track. The company has been posting quite good results for last three or four quarters. This is the last hurdle which the company has been facing now getting cleared.

Q: Are you convinced with the big rally in ITI today after the telecom news yesterday?

A: No I am not convinced at all. For FY11 the company posted a loss of close to about Rs 400 crore on top-line of Rs 2,300 crore. For quarter one their top-line is pathetic at Rs 125-130 crore and losses are about Rs 85-88 crore.

The CMD of ITI said that they will turn around in FY13, but this is just wishful projection. This estimation is attached with so many caveats like whether there will be adequate financial assistance, whether order flows will come in from the parent companies etc.

Honestly I don't think the financial improvements are likely and that is my biggest concern. HMT and ITI both move together and this has been the pattern. If one observes the trading pattern for last two-three years both stocks moves in tandem. I don't understand what is the correlation for HMT to move? I am not convinced by the movement for both these stocks.

Q: What has happened with JP Infra that stock suddenly made a big move today?

A: We have been seeing consolidation or informed buying in the stock. It has moved to about Rs 54 in the last week and then corrected to Rs 46-47. At Rs 50-55 we have seen good accumulation happening in the stock. There are positive news flows of F1 track getting commissioned by the month end. Also prices in Greater Noida and Gautam Buddha Nagar have shoot-up to Rs 9,000 per square meter of the land which were at about Rs 6,500-7,000 per square meter earlier. Also, the company has huge chunk of land in that pocket.

The public float of the company is very low at about 5-6% because promoters are holding close to 80% plus. They might commission the Yamuna Expressway by March 2012. On valuation front, the stock still has good upside potential. They have also been reducing their debt every year and Rs 1,500-1,800 crore is earned as a PAT for development of land. Taking all this into consideration, I have been keeping a positive view on the stock with a time perspective of 6-12 months.

Q: Fertilizers are seeing very good move today. Do you think it's because of how oversold they are that there is a technical bounce or is there some news driving them?

A: I can understand the technical bounce factor purely applying for Chambal Fertilizers. This stock has been technically holding very strong at Rs 110 level in the previous series in spite of no fundamental positive news. Till last week, the stock was ruling at about Rs 85 and now it has moved to Rs 95-96. But I don't understand the case of RCF , Nagarjuna Fertilisers and National Fertilisers moving up, because there has been no positive news.

There might be some news building up about urea decontrol. But I don't think these meetings will have any concrete outcome. I don't have a fundamental call for any of these stocks. But Chambal Fertilisers is looking very strong on the technical charts.