Tulsian's view: GTL Infra, Rel Infra, Everonn, Alfa Laval

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 GTL Infra BSE | NSE 30/05/12 Are Mutual Funds betting on GTL Infra? Other Stocks in this news Reliance Infrastructure | Everonn Education | Delta Corp | Alfa Laval (India) | Reliance Capital | GTL | ACC | Ambuja Cements | UltraTech Cement | Madras Cements | Shree Cements |

SP Tulsian of sptulsian.com, in an interview to CNBC-TV18, gave his views on stocks like GTL Infra , Reliance Infra , Alfa Laval (India) , Everonn and  Delta Corp . He also spoke about the cement sector in detail. 
 
On GTL Infra

As far as GTL Infra is concerned, loan restructuring is a foregone conclusion, but the market is still hoping that loan restructuring will go through. Since last week, we have seen the stock moving up by 30-35% for GTL Limited and GTL Infra. Hence, it's a foregone conclusion because both these entities have huge debt of Rs 12 crore.

However, unless loan restructuring happens, the assets sale deal cannot get concluded. GTL Infra promoter holding is largely held by GTL and hence, everything is reflected into the valuations of GTL Limited . You can't take a call beyond Rs 75 for that share. We will keep seeing this kind of technical volatility unless loan restructuring happens. We will see the stock moving by 6-7-8-10% and once the trading interest goes away, then in couple of days, you will see it correcting by about 4-5-7%. So, the stock is likely to remain in the range of Rs 65-75 till the loan restructuring happens, which is expected in next 10-15 days.

Also read: GTL twins surge on lenders' nod for debt restructuring

On Reliance Infra

Both Reliance infra and Reliance Capital have been seeing lower bottom continuously. Once you see the share of Reliance Infra getting hit for 8-10%, then you will see a trading bump in the form of short term buying made by the traders, and then, the stock will see correction.

There is no negative news on the company yet due of which the stock is unable to sustain the levels. Moreover, weak market has adversely affected the ADAG lots, especially Reliance Infra and Reliance Capital .

On Alfa Laval

I won't be taking a call on this stock beyond Rs 2200. If you go by the company's financial performance for calendar year 2011, the company is likely to post an EPS of close to Rs 75 to Rs 80. As far as the kind of delisting the company is planning to have, it will happen at a PE multiple of about Rs 28-30 because about 11% of shareholding is held by 10,000 shareholders. So, the investment bankers need to push the delisting plan hard. In that case, the stock may go to about Rs 2400.

If the floor pricing for delisting is likely to get indicated by the company, which I am expecting to be about Rs 1750, then profit booking is likely to happen, which can bring down the share price to about Rs 2200-Rs 2250. Hence in that situation, I don't think that one should play long for Rs 2300. Those who are holding the stock can book profit at Rs 2300. I'm expecting the delisting to happen on a realistic basis at about Rs 2400, but that's a long process. It may happen after a couple of months.

On Everonn

As far as Everonn is concerned, there is a talk that an overseas investor is eyeing a stake in the company at Rs 440-450. The term sheet is likely to get signed up in the next couple of days for that deal. If one has to rely on that news, then the share can move to Rs 375. The price, at which, the investor is acquiring the stake in the company, 20% less of that can get reflected into price, into the secondary market.

So, if the investor is eyeing for a sizeable stake in the company, which would be anywhere between 20-26%, then Rs 375 is the target for Everonn.

On Delta Corp

Delta Corp is moving in a range of Rs 100-115. We see it moving to Rs 113-Rs 114 levels and the profit booking should come from tomorrow or day after. The stock may correct to Rs 104-105.

Currently, it is holding a tight range of Rs 100-115 with a renewed interest buying coming in on some expected news flows. However, I won't be taking a positive call beyond Rs 115 on this stock and any fresh profit booking can bring it down to Rs 104-106.

On Cement Stocks

There has been some price increase of Rs 15 per 50 kg bag in cement, which is giving a short term positive move in all cement stocks. However, I don't think these stocks will give a great performance. Traditionally, the second quarter is always subdued for all the cement companies. Apart from that, the new capacity addition or some CCI action is looming large on the larger companies. There is a possibility that the price increase may off-set the cost to a greater extent.

However, I don't see any incremental addition happening on the margins. Mid-sized players, who have a production capacity of around 6-10 million tonne, are finding it hard to push the product and that's the reason why the industry utilisation is lower than 80%. So, apart from ACC , Ambuja Cement and Ultra Tech , there is unlikely to be relief in remaining stocks. Shree Cement is seeing some sporadic moves.

As far as Madras Cement is concerned, we have been witnessing some positive up-moves since last one week. Thus, some of these stocks can give you a short term trade, but on a long term basis, I don't think that there is much hope on all the cement stocks.