Tulsian bets on OBC, United Spirits & JP Associates

Tulsian maintains his bet on United Spirits as it would prove very lucrative if it sold stake to any of the liquor giants that it is in discussions with. The third and last stock of choice, JP Associates , is a good bet as it has always maintained better margins than the industry leader, L&T .

Below is an edited transcript of the analysis on CNBC-TV18.

Q: Not just Oriental Bank of Commerce (OBC), but even Dena Bank on Friday, assured that the pace of restructuring would be reduced and both banks have promised that they may not have too many accounts in the restructured pipeline in the next quarter. But which would you pick between these two?

A: Naturally, looking to the results I will go for OBC as the confidence is more visible. With the kind of mauling that the banking stocks have received, it is time to take a call on all stocks in this segment. Corporation Bank has posted very dismissal results in terms of the increase in gross NPA, increase in net NPA. Similar is the case with IOB which has posted negative results.

But the market seems to have taken to this philosophy that if the pipeline of restructured accounts is going to taper off, the impact will not be severe. I prefer to also bet on larger PSU banks like PNB  and the Bank of Baroda .

Q: What do you make of Havells ? The stock was up 50% in the last six-to-eight months? After announcement of results, how would you move on the script?

A: Considering the valuations, I have not been comfortable on the stock beyond a price level of Rs 550. The valuation is very hefty and even if I take a PE multiple of 18 for FY13, it looks very frightening.

The volatility of Rs 550-600 witnessed in the stock has really made it very difficult for traders as well as investors. So in spite of the fundamentals and improvement in its European operations, I am not comfortable on the stock beyond Rs 550.