Tulsian reviews United Spirit, Sintex, Sesa Goa

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Tulsian reviews United Spirit, Sintex, Sesa Goa

SP Tulsian in an interview with CNBC-TV18 gave reading and outlook on stocks like United Spirit, Sintex, Sesa Goa, Petronet LNG and others.

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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

SP Tulsian in an interview with CNBC-TV18 gave reading and outlook on stocks like United Spirit , Sintex , Sesa Goa , Petronet LNG and others.

Below is the edited transcript of Tulsian's interview with CNBC-TV18. Also watch the accompanying video.

Q: Did today's 12% rally in United Spirit surprise you all the way back up to Rs 640?

A: Not really because I gave my view day before after the results that market has become very negative, it can probably be a technical call. I agree that Q3 has been disappointment with EPS of Rs 3-3.5 against Rs 10 having posted in the previous two quarters. But if you see the fundamentals, it is the largest breweries in the world, largest spirit maker in the world and the kind of valuations it is getting now at PE multiple of close to 12-13 against United Breweries ruling at PE Multiple of 70 plus. I don't think these kind of valuations are justified for this largest spirit maker.

So, taking a pure fundamental call, I have been maintaining my view that it can move to about Rs 750. I maintain that same view. In fact Rs 750 was the target given in next 4-6 months, but that is likely to get achieved in the next couple of months. I maintain my positive view. The technical factors have been making the stock so volatile. On January 12 it had 52 week low of Rs 450 and today it is ruling at Rs 640-650. So, this kind of volatility is largely due to technical factors.Fuel has been added to fire because of bad Q3 results.

Q: Sintex was up 7% today, do you think the worst is over for that finally?

A: Yes it looks like that because if one looks at the Q3 results we have seen good relief. They have written back some of the forex losses, so that pain is not there. The kind of corrections seen in the share price and the kind of shorts seen built up on the stock, on the technical side that makes you feel that the stock can move, like we have seen in Exide , Jain Irrigation and Welspun Corp . The kind of run up these three stocks have shown largely on technical factors can be seen in Sintex, which can make it move closer to Rs 100 in next 1-2 months.

Q: What are you expecting from Sesa Goa's numbers and how would you approach that stock now?

A: This time Sesa Goa's results will be quite interesting. One has to see Cairn India, which posted a profit of close to Rs 2,300 crore for Q3 and if that is extrapolated, it works out to a yearly profit of close to about Rs 9,000 crore. So, 20% of that will straight away get added as a minority interest in the PAT of Sesa Goa. Now that Rs 1,800 crore alone translates into an EPS of Rs 20-21 in the books of Sesa Goa.

They have made investments of about Rs 13,000 crore in Cairn India, that Rs 13,000 crore can give them a PAT of close to Rs 1,800 crore on a yearly basis from FY13, so that is going to get liked by the market very much.

Their core operations will be broadly on the lines of Q1, marginally down than Q1. Quarter one had maybe EPS of close to about Rs 11, but core operations for Q3 will given them an EPS of Rs 9. So, if we take this call Rs 40-45 for FY13 from core operations and Rs 20 from Cairn India, Rs 65 EPS on Sesa Goa makes it a good buy. That is the reason I have been maintaining my positive stance on the stock for last 15 days.

Q: What are you expecting to hear from Petronet LNG and how are you positioned on the stock now?

A: Except for marketing margin, I don't think there was any fear. This is their Q1 and Q2 results were good and that made the share to move to as high as Rs 180. I am expecting Q3 results to be marginally better, largely on spot LNG transactions on which they will be making profits. That can make the stock to move to about Rs 168. The fear of marketing margin has been receding.

Indraprastha Gas has seen good recovery because that was worse affected and has started moving from Rs 315 to Rs 335-340. Petronet LNG looks strongest amongst marketing margin fear. It should bounce back, but one has to keep a caution that it cannot move beyond Rs 170. So if it gives a gap up opening probably one should look to exit between Rs 168 and Rs 170.