Tulsian reviews SKS Microfinance, Jubilant Foodworks

Below is the edited transcript of Tulsian's interview. Also watch the accompanying video.

On SKS Microfinance

The stock has witnessed a 30% run and has been a big mover last week. I am not comfortable with the upside beyond these levels. Even today it is up but it should settle around Rs 280-285. Once we start seeing profit booking the share can correct to as low as Rs 220-225.

We have been witnessing these kinds of moves for last couple of months. One-one and half month back the stock had hit two upper circuits and two lower circuits of 20%. So, profit booking may start happening at Rs 280-285 levels again.

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On Jubilant Foodworks and Lovable Lingerie

I was never convinced with valuations of both these stocks I will also add VIP Industries  to it. Lot of technical recommendations have been coming on all these three stocks, which I am unable to accept.

For example Jubilant Foodworks had a market cap of Rs 6,500 crore, which I don’t think was justified. Given any stretch of imagination with 350 or 400 outlets it has been given a valuation of Rs 15 crore, which is costing them about Rs 50 lakh. Similar is the case with VIP Industries and Lovable Lingerie because it is being compared with Page Industries .

Technical is not my subject and I cannot scratch my head on the technical aspect. That has never given me a comfort. I still feel that they are overvalued to the extent of 25% in spite of these corrections.

Whenever the market will take a pause or start recovering or showing some sign of technical bump then these stocks will move back. From a fundamental point of view, as an investor these investments are not worth from a six-12 months horizon.

On Infrastructure sector

Last week it was thought that renewed buying interest was coming in IVRCL . What we witnessed in Lanco might be a technical bump. I don’t think we had comfort in Punj . But HCC gave an impression of fundamental or value buying. Those kinds of cues came from GMR and GVK also.

Comfort has still not come in the infra space. It can come once we see rate hike coming to an end by RBI or we see interest rates peaking out, till then I don’t think one can say that fundamental values have emerged in this sector.

On Real Estate stocks

Some real estate developers are hopeful that during Navratri till Diwali, they are likely to see good sale of flats. But prospective flat buyers have no confidence of going for under construction projects which are likely to get completed in next two-three years.

In last couple of months we have seen 10% price hike on ready flats. But prospective buyers are not so interested in under construction projects. This apprehension is likely to continue. I don't think hopes on which real estate developers are sitting will result in any fruitful sales or growth in topline. This is real concern for this sector.

On Cement stocks

I am not maintaining positive view on cement stocks. Ambuja has seen a rise of about 4% largely because there have been talks about promoter Holcim increasing stake in ACC and Ambuja, then merger is on the cards.

But considering the demand supply scenario and cost pressure, Competition Commission's (CCI) action is likely to come in next couple of months. I don’t have positive view on the sector as a whole.