Exit Kingfisher Airlines on rise: Tulsian

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Exit Kingfisher Airlines on rise: Tulsian

Investment Advisor SP Tulsian is of the view that one can exit Kingfisher Airlines on rise.

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Excerpts from Your Stocks on CNBC-TV18 Watch the full show » RELATED NEWS Stay away from aviation space: Sukhani Kingfisher Airlines teams up with Hilton HHonors ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Kingfisher Air See messages about Kingfisher Air Kingfisher Air BSE | NSE 28/05/12 Are Mutual Funds betting on Kingfisher Air?

Investment Advisor SP Tulsian is of the view that one can exit Kingfisher Airlines on rise.

Tulsian told CNBC-TV18, "Whatever rise or spurt which we have been seeing maybe for last couple of days in the aviation especially Jet Airways and maybe the Kingfisher Airlines more as a trading call. If I take a fundamental view on the stock the present marketcap of Kingfisher is close to about Rs 1,000 crore while they are making a loss of close to Rs 1,500 crore. If I just take an estimation for FY09 on the expected topline of about Rs 5,000 crore and to finance these losses they will have to keep struggling to infuse capital at every point of time maybe on a quarterly basis for which they need to look for the fresh equity or maybe the line of credit from the bankers and all that."

He further added, "Earlier they were struggling because of the high crude prices and now inspite of crude process have come down their losses can only get curtailed even by making some arrangement or collaboration for Jet also and maybe going for wet-leases and curtailing the cost and rationalising the air route and all that. So if you have so many problems then there is no compulsion for any investor to go for fresh investments and even if you are holding maybe on a technical bounce whenever we see the kind of spurt in share price which could be in the Kingfisher level of about 45-46-48 that's a right point to exit. I do not advice fresh buying or any recommendation to buy it and maybe those who are holding should look to exit on a rise in the near course of time."

Disclosure: Analyst is holding position in Renuka.