SP Tulsian of sptulsian.com shares his view on HMT and ITI.
Tulsian told CNBC-TV18, "Telecom Policy has not convinced at all because if you see the financial performance for FY11 company posted a loss of close to about Rs 400 crore on top-line of Rs 2,300 crore and in fact if you see the quarter one performance the top-line is pathetic at Rs 125-130 crore and the losses are about Rs 85-88 crore. I heard the CMD of the company saying that they will turn around maybe in FY13, but I think this is just wishful projections."
He further added, "This kind of estimation or maybe the turning around or improvement in the financials are attached with so many caveats that whether there will be adequate financial assistance, whether the order flow will come in from the parent companies or maybe the BSNL or these kind of things. But honestly I don't think that the financial improvements are likely and that has my biggest concern. But this stock has moved up and in fact it is very strange. HMT and ITI both moves together. In fact this has been the pattern if you observe the trading pattern for last 2-3 years always both the stocks moves in tandem, in line with the same kind of up move. So sometimes I don't understand what is the correlation for HMT to move? One can understand for ITI being the telecom policy having announced. So I am not convinced honestly for both the stocks."
