SP Tulsian reviews Suzlon, IVRCL, banking stocks

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SP Tulsian reviews Suzlon, IVRCL, banking stocks

SP Tulsian, sptulsian.com in an interview to CNBC-TV18 gave reading and outlook on stocks across various sectors.

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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, sptulsian.com in an interview to CNBC-TV18 gave reading and outlook on stocks across various sectors.

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

Q: What are your thoughts on Suzlon and IVRCL , they rallied today.

A: I have been maintaining positive view on both these stocks for last one month. The first positive trigger for IVRCL came because management is merging IVRCL Assets and they also want to monetize realty stocks held in IVRCL. That will help the company in a big way. On the merger, equity is getting extinguished, about 75% stake held by IVRCL in IVRCL Assets .

Even in IVRCL, the company is looking to monetize some of the assets and even IVRCL assets like other PPP power projects like Chennai desalination plant. They are also looking to exit from the Hind Dorr-Oliver, which can give them an inflow of about Rs 400-500 crore. That was the reason for taking a positive call on IVRCL. In spite of having seen a huge run-up, I am still maintaining positive view from hereon.

Suzlon has been seeing order inflow from India and abroad, mainly from Europe and US. After REpower 100% squeeze out the management has indicated that they have cash of about USD 1.5 billion, this quite comforting on the net debt of about Rs 12,000-12,500 crore. Suzlon, is a USD 5 billion top-line company and the long-term prospects are very good. In fact the company needs to improve its profitability.

Probably Q3 may not be able to give much comfort and not much can be expected from Q4. But going forward, FY13 will start giving comfort on the bottom-line. USD 5 billion top-line is quite comforting with Rs 25,000 crore top-line. Taking these into account, I am holding positive view on Suzlon. Apart from technical factors taking a day-to-day call or a week-to-week call, if someone can keep a view of about one year on both these stocks, IVRCL is capable to give a return of 30%, while Suzlon can give a return of 40-45% in next one year.

Q: Banks have done very well, but among the smaller ones, not the index stocks which banks look the best to you on results or any other parameters now?

A: If we knock off tomorrow's event, if there is no disappointment and I am not expecting anything much from the Reserve Bank of India, then I will be keeping positive view on midcap PSU banking stocks. Private sector large banking stocks like Axis Bank , ICICI Bank , HDFC Bank have already moved in. We have seen that effect getting partly reflected into other stocks also. Same thing is happening for larger PSU banks like SBI , PNB , Bank of India , Bank of Baroda or Canara Bank .

Canara Bank has not participated much in the rally, I am expecting quite a good upside in that but I will wait to see Q3 results. But apart from that in the midcap PSU bank I am quite optimistic and some of the stocks in that space could be Vijaya Bank, Uco Bank, Dena Bank or Indian Overseas Bank. This is because Syndicate Bank has already come out with results and if you need to add two stocks it could be Allahabad Bank and Andhra Bank, which show huge trading interest or one can say that these stocks are holding quite well.

Even those are looking quite good. These five-six stocks are looking quite good in spite of having seen a run-up of about 30% in last 15 days. I am still maintaining positive view on these banking stocks. They can move further from hereon by about 15% largely because they are at a very low PE of close to about 4 or less than 4 and price-to-book of less than 0.75%. These are two parameters which are attracting towards these midcap PSU banking stocks.

Q: How do you think GAIL numbers look?

A: It is looking good on the top-line and bottom-line. We don't have details of petchem, but I don't think it will be something different than posted by Reliance Industries. In case of Reliance Industries, we have seen a drop of about 60 basis points because currency gain has flown to petchem sector, but I don't think that things were anything extraordinary. I don't think that there will be much disappointment, because overall results have shown quite a good growth in terms of top-line Rs 1,500 crore, bottom-line by about Rs 1,000 crore. One has to hunt for such variation in other segments minus petchem segments.