Tulsian bets on Hindustan Zinc, SAIL, ICICI and HDFC Bank

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Tulsian bets on Hindustan Zinc, SAIL, ICICI and HDFC Bank

Despite metal stocks have taken a lot of beating, SP Tulsian of sptulsian.com has a buy call on Hindustan Zinc and SAIL on current levels. From the banking space, ICICI Bank or HDFC Bank on the frontline leading private sector banks look very attractive, but I may not be too positive on Axis Bank, he indicated.

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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

Despite metal stocks have taken a lot of beating, SP Tulsian of sptulsian.com has a buy call on Hindustan Zinc and SAIL on current levels. From the banking space, ICICI Bank or HDFC Bank on the frontline leading private sector banks look very attractive, but I may not be too positive on Axis Bank , he indicated.

Moreover, Tulsian remains extremely positive on Orchid Chemical . With any positive move on FDI in retail by the government, he feels that it can take Pantaloon Retail to about Rs 225 levels. However, he isn't too positive on SREI Infra .

Here is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying video.

Q: SKS Microfinance has drifted down into double digits. Would you buy it here?

A: I don't see much downside from here for the stock. I am not too convinced with the actions initiated by the management. The kind of talks that they are initiating now are still a bit scary with respect to the write-off of the Andhra of about Rs 600 crore, which might keep the results subdued.

Taking a contrarian call, it cannot fall below these levels and some kind of trading run can be seen in the stock which can make it move to about Rs 115-120 levels. I am not taking a linear long call on the stock from a three to six months horizon, but it can gain for the short-term.

Today, the stock has frozen upper circuit 5%. This trend is likely to continue probably may be for next Rs 15-20 or so and we may see profit booking coming in. If someone is interested in the stock, look for about Rs 115-120 levels, but I don't see much downside in the stock below Rs 90 levels.

Q: What have you made of the way some of these metal names have moved? Can any specific stock in metals or banks see further upside?

A: Metal stocks have taken a lot of beating. This kind of beating was not warranted. In some of the cases like SAIL, the market has taken a stand that they cannot give more discounting than on an earning multiple, which is ruling at about 6-7% or may be 8% maximum. Taking that into account, the share has beating to as low as Rs 80 levels. These kinds of violations were not warranted.

We have not been seeing any kind of volatility in the non-ferrous metal. The zinc prices or lead prices have not softened in last 45-60 days. Conversely, the rupee has become weak in this period, which has given them a large benefit. Taking all this into consideration, my buy call would be on Hindustan Zinc and SAIL on current levels.

In the banking space, we might have some ideas available in the smallcap or midcap private sector banks like Karnataka Bank and DCB . If someone can buy them at current levels with a couple of months' view, they can expect a gain of about 15-20%.

Even if a call is taken on the frontline leading private sector banks like ICICI Bank or HDFC Bank, they look very attractive. I may not be too positive on Axis Bank. I won't be too comfortable taking call on any of the public sector bank like Bank of Baroda , SBI or Canara Bank .

Some midcap PSU banks like Dena Bank , UCO Bank and Central Bank have been giving sporadic news, but they are not very sustaining. So, one should be selective in banking stocks like Karnataka, DCB or may be ICICI Bank and HDFC Bank.

Q: A couple of stocks have got hit very hard in past many months, but today, there is a bit of a recovery. SREI Infrastructure is up about 4% or so. Pantaloon and Orchid Chemicals have seen a tad bit of up move. From this list, has anything bottomed out? Can you see a good move on the upside from here for these stocks?

A: I have an extremely positive view on Orchid Chemical because that stock doesn't have any reason to fall below Rs 150 levels. On fundamentals, I might give a valuation of close to about Rs 180-190 levels in the near-term or may be next couple of months.

Any positive move on FDI in retail by the government in the parliament can take Pantaloon Retail to about Rs 225 levels.

For SREI Infra, I won't take a too positive call. For last two to three months, the stock has been languishing. With the kind of erosion we have seen in the stock price, this could be taken as a bounce back. I won't be too convinced with the stock to take a call either from a technical or fundamental angle.