Jun 30, 2014, 11.07 AM | Source: CNBC-TV18
SP Tulsian of sptulsian.com recommended buying DB Realty at Rs 95 and Unitech at Rs 25, in an interview to CNBC-TV18. For Ambuja and ACC he advocates buying at current levels.
SP Tulsian (more)
CEO, sptulsian.com | Capital Expertise: Equity - Fundamental ,IPO
Below is the verbatim transcript of his interview to CNBC-TV18
Q: When you see Unitech and DB Realty, you worry about what kind of stock price movement they have seen. A lot of influential investors have been putting their money in DB Realty in the past one month or so. What do you see as the stock price movement from here on? How long do you think this latest revelation in the 2G conspiracy will linger?
A: If you see the reason for correction of both these stocks because of the revelation of the prosecutor in collusion with the accused, I honestly don’t see any. In fact in my view no effect should have come on this. This is either the knee jerk reaction because whatever damage has to happen has already seen in the share price way back.
Since then even if one takes the worst case scenario that all of them have found to be guilty, may be the alleged promoters of both the companies and may be the public prosecutor that is advocate Singh, the new charges will be initiated against them. It will be a new inquiry, initiated against them. However, I don’t understand how that will affect companies working.
We have seen the damage having taken place when the things were at its extreme against the promoters of the company. Since then lot of water has flown under the bridge. We have seen lot of realty stocks having re-rated. Both these companies have seen execution of projects. So, I see this as an overreaction. It is very difficult to say that till what it can really go on.
In fact after watching this news, I thought this may have a mild negative effect. It should get erased or subside over the next couple of days, but that has not happened. So, probably this looks to be the extreme reaction.
The share price should settle in case of Unitech because that has its presence in F&O. The stock may bounce back because of the technical supports or due to kind of shorts having seen built up in the counter.
Q: Do you think for a trader it is a good time to buy DB Realty?
A: Yes, I will recommend buying maybe at Rs 95. In case of this volatility one never knows that it can fall by about Rs 4-6.
Maybe the company having completed their Goregaon projects and the possession of that will be handed over. It will get reflected in the next two quarters. In case of Unitech, I will advice buying at Rs 25.
Q: What are your thoughts on Industrial Finance Corporation of India (IFCI) and the profitability of Rs 70 crore that they reported this quarter?
A: Very poor numbers even if one takes the extra provision. The numbers have really been very bad and what I have been maintaining my view on the IFCI. It seems that they have lost their focus. The amount or maybe the funds at the disposal of the companies are just utilised for any unrelated activity or maybe without having any focus. With this approach yone cannot really take a call on the company.
We keep seeing the news, which have been coming in that government is looking to induct a strategic investor. That also seems to be a non possibility because of government holding 56 percent stake in the company. So, in the interim I don’t think that anything has happened.
This has to continue to remain as a public sector undertakings (PSU), unless and until we see the change in the management or the total revamping of the business. This can happen either by the merger. I rule out strategic sale, but considering the results, the results are really very bad and I am keeping a very cautious-to-negative stance on the stock.