Tulsian's call on Tata Motors, Coal India & others

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Tulsian's call on Tata Motors, Coal India & others

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com, spoke about his reading of various stocks and sectors.

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Excerpts from Markets Midday 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 Tata Motors BSE | NSE 29/05/12 Are Mutual Funds betting on Tata Motors? Other Stocks in this news Gokaldas Exports | Coal India | Bajaj Hindusthan Sugar & Industries |

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com, spoke about his reading of various stocks and sectors.

Below is a verbatim transcript of the interview. Also watch the video.

Investor query: I have 10 shares of Tata Motors at Rs 1188. I want to know what the future prospect of the stock is.

Tulsian: Tata Motors posted good results in third quarter, which has really cheered analysts and the market. There is going to be the volume growth of margins or at least it is going to get maintained. The company is likely to have a volume growth of top-line growth of about 11-12% and correspondingly the PAT also or the bottom-line also will get increased in the same proportion.

If we take this financials, an EPS of Rs 40 plus maybe will get reflected for Q4. If you take this on an annualized basis, probably for FY12, company should be heading for an EPS close to about Rs 145 to Rs 150.

I am not taking state that as multiplied by 4 but even if you take for FY12, it should be about Rs 145-150. If somebody wants to take a fundamental call we have not seen the automobile stocks ruling in a single-digit in the last couple of years. In fact, traditionally, they have been ruling at 11-12 PE multiples.

Maybe one can keep a view of about six months but the investor seems to be more of a short term trader and since the investor has bought 10 share at Rs 1188 he can look to exit somewhere at around Rs 1250.

I don't think that post results we will see big corrections. Maybe the analysis or the review on FY12 can upgrade the target of the stock and the investor can look to exit at Rs 1250. But if the investor is a short-term investor, he has a time horizon of six months or so, he can remain invested.

Latha Venkatesh : Do you track Gokaldas Exports ? A lot of the textile companies like Arvind and Alok, have been turning around showing positive, in fact, good growth. Gokaldas has not been able to do so. At one point in time it was the prince among textile exporters. What is your sense of the numbers?

A: It has a reason to it. If you compare Gokaldas with Arvind - Arvind is an integrated operations. They make denim and then the denim is exported etc, but the same is not the case with Gokaldas. We have heard just Chakravarti, CEO of the company, saying [numbers are poor] due to the increase in the prices of fabric, or maybe the textile, in fact, that has been the case.

Large money has been made by the company who are making the fabrics or textile. The company [Gokaldas Exports] has been buying this textile or maybe the fabric from the market, so that has really put the cost pressure on the company.

Also, whenever we see change of management - this has been a traditional case - whenever we see stake sale or change of management which we have seen here because from Hinduja's it has gone to the management of Blackstone and the now the new CEO or the new team has come in place we always see a big write-off or big losses gets booked and that is again very much on the expected line.

So probably because of these two reasons the performance has not come on line of Alok and Arvind.