SP Tulsian's views on Glenmark, NBFC space and PSUs

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

In an interview with CNBC-TV18, SP Tulsian, sptulsian.com, shares his views on Glenmark, PSU bank stocks and why he is bearish on NBFC stocks.Below is the verbatim transcript of SP Tulsian interview with Sonia Shenoy and Anuj Singhal on CNBC-TV18.Sonia: One of the stocks of the day clearly has been Glenmark post the good sets of numbers and the company giving out very good guidance. The 52 week high of Glenmark is Rs 1,260 so there is still perhaps a lot more legroom for the stock to go up. Would you advise investors to buy it now?A: Looking to the commentary, if you really see the top line growth of the company that has really impressed. One may argue or one can question about the margins, but I don’t think that if you have a top line growth also margins may follow in the subsequent quarters that is number one on the Q4 numbers, if you go by the management commentary I have not seen management to be so confident, Glenn Saldanha has stated that you are going to see excellent numbers going ahead and that itself is quite positive commentary having come on the guidance of the company not for one quarter, but for whole of FY17. Thirdly, I don’t think that there is any meaning in taking 52 week high of, of the pharma stocks because you have seen the 52 week high touching for all the stocks in a frenzy, so even if you get a return of about 15 percent on these pharma stocks and if you see the confident and positive commentary coming in from the management, this is the right time to enter and I am actually expecting may be one can look for a 15 percent return in 3-4 months time if you have a short term investment view. As a trader probably, I may not advise to go long in the May series may be June could be the right, if one can have a position in the June series in the stock that will be better because May not be able to give you that kind of a return or you will look to create your long position in May and rollover at near expiry.Anuj: A word on SRF and whether you will buy the stock after the big dip today?A: Looking to the commentary and definitely if the management has said that the guidance is muted, they are looking for the lower growth. Actually, if you see SRF has posted very good numbers largely because of the packaging division performing very well with the huge capacity having created, but one may argue that their guidance were muted and you may have little discomfort but this is seen to be a highly volatile stock as well and if you take a call on the June quarter also looking to their chemicals and refrigerant gas business even that quarter is seen to be quite good and whenever we see the companies like Navin Fluorine and SRF posting those kind of numbers, you again see the stock moving back, so may not be an ideal stock for having F&O position, but yes as an investor after looking to the today’s correction I will advise a buy in the stock with 3-4 months view.Anuj: Any thought on this Arvind Infra up 20 percent right now?A: Excellent result posted by the company if you see the profit after tax (PAT) of Rs 18 crore against nil on a sequential basis and Q4 EPS has been at about Rs 6.70, the company has just an hour back or may be 15 minutes they have declared this numbers and if you see for whole of FY16 the EPS is at Rs 6.66 and the quarter EPS is at closer to about Rs 7 and if you see the financial position also book value of Rs 55 not much leverage balance sheet, so probably one has to analyse that which all projects have contributed to this Q4 numbers, but market is taking cue from this excellent robust Q4 numbers posted by the company.Sonia: Is there more value for an investor here because the space is really buzzing with activity the NBFC space, are there any hidden gems that one can still buy into now?A: If you see the run up which we have seen in NBFC including Manappuram I agree that their numbers have really been quite good, but I don’t think that one should really take a call. May be the monsoon, allow the monsoons to come because majority of them seem to have ran ahead of the sentiments and even the results and same view will be held on the Manappuram also. One can look for the results or one can take a call on Muthoot Finance because they are also almost in the similar space, but the kind of run up and too much of the interest and the long positions or may be the investment positions having created in this NBFC space may see some profit booking likely to happen because people have to shift into the other sectors and other stocks which will be looking quite promising or may be undervalued after this recent corrections, case in point is pharma sector and may be the pharma biggies could start attracting attention once you have the results of all the pharma companies in front of you like we have seen in case of Glenmark, so I won’t be advising now to take a call on any of the NBFCs at the current valuations.Anuj: I remember you were bullish on Federal Bank but the stock that I want to discuss with you is UCO Bank now. You have been avoiding PSU banks you said at least let see this quarter’s numbers and then take a call. Your first thought on the disastrous numbers from UCO Bank?A: I have said that I will be looking for the PSU banks number of Q4 and then only will be taking a call and if you take a call till now out of 24 or 25 listed PSU banks 11 banks have declared the results and looking to those results actually UCO Bank is the disaster or worst amongst all, but looking to the 11 or 12 banks which have declared the results till now, then I may say that I will postpone my decision to buy the stocks even after seeing the next two quarters, but on a serious note you have to see the results likely to come now to be seen from the biggies one like SBI, PNB, Bank of Baroda is due today, Bank of India, Canara Bank they will decide the trend or may be Canara Bank can also be added. I don’t think that one can really take a call by looking to the results of Allahabad Bank, Andhra Bank, UCO Bank or State Bank of Mysore kind of things. One can add the results of Union Bank also I am expecting better numbers from Union Bank, but it will be very interesting to keep an eye on the Bank of Baroda because the kind of hopes they have given while Q3 numbers may be in the analyst call or concall or the post results conference where they have given that everything is behind them and if that kind of indication is seen coming in from the other banks also in the bigger one the names of which I have just stated then probably one can look to be a selective buyer but otherwise looking to the results declared till now of 12 banks, I won’t be taking a buying call on the PSU Bank even at this stage.Anuj: Today of course we have seen Crompton Consumer do well, Crompton Greaves on the other hand has fallen a bit, but from here on how would you compare Crompton and Havells and where do you think investors can make more money?A: It is not correct to compare Crompton Greaves Consumer Electrical and Havells because if you see Havells is on a growth trajectory, cash surplus company showing good performance in their core business and on the other hand Crompton Greaves Consumer Electrical is showing a declining trend. Actually I stated yesterday also if you see their first half results which was reported by Crompton Greaves along with their consolidated number and if you see the Q3 numbers, Q3 numbers is showing a complete decline in the margin and with the flat top line. In fact, margin has fallen by about 270-280 basis point and if you go by the expected earnings for FY17, I don’t think that it is likely to be more than Rs 4 per share because I am calculating that on 62 crore shares outstanding, the similar amounts of number which Crompton Greaves has, so I don’t think that this will be a right way of taking a comparison and giving a PE multiple of 33-34 times and that to when the company was hived off in the middle of April or April 15 if I am not mistaken. At that time the combined value or the price at which it was ruling and the combined value now is also showing a huge jump in the share price, so may be in the next one week or so you may see profit booking coming in and stock correcting from hereon.Sonia: From the list of midcap stocks that came out with numbers over the last 12 hours anything special that caught your eye that one can buy into now?A: Firstsource actually has posted good numbers because if you see the geography US and Canada, both geography have shown a good rise in the margin also and if you take a debt position and if you take the book value and the growth kind of performance the company has posted the stock looks good and that stock has not seen having much participated in the today’s rally post we have good numbers from yesterday.