CEO, sptulsian.com | Capital Expertise: Equity - Fundamental ,IPO
SP Tulsian of sptulsian.com advises traders to exit VIP Industries on rally.
Tulsian told CNBC-TV18, “ VIP Industries , I was never convinced with this kind of valuations. If you recall about 12-18 months back it was very richly valued. If you really go by the management which has a very low market perception and if you go by the business model, 90 percent of its imported contents, they import from China and they have such a big competition threat. To push the product you have to offer discounts to the dealer, discounts on the product to the consumers and you have a lot of competition from the imported stuff.”
He further added, “Taking all this into consideration, you cannot really realize on the consistency of the financial performance of this company and I have as I said that I never had the confidence and the faith in the financial performance of this company considering its business model where the weakening rupee can eat away your entire profits. 85-90 percent is the imported content. So, taking all this into consideration I was always very worried or remaining away from the stock, still keeping the negative view only- whenever we see any kind of up move that should be used as an exit opportunity.”