No Prime Focus, limited Max India upside: Tulsian

In an interview to CNBC-TV18, SP Tulsian says he has a negative view on Shree Renuka and the stock can move in the range of Rs 28-35. On Max India, he says that long-term investors should exit the stock at Rs 210-215 level. Tulsian also holds a negative view on Prime Focus.

Below is the edited transcript of the interview. Also watch the accompanying videos. Q: CLSA has a target of Rs 45 on Shree Renuka. What is the potential of this stock?
A: If monetisation of the Brazilian assets like the cogeneration assets or shedding of stake in two Brazilian subsidiaries happens then that can be seen as a positive for the company.
Domestic prices have also started firming up. The pending export entitlement of 2.2 million tonne is also in the pipeline. Now, the deadlock on the allocations of export entitlement has also been settled which will benefit Renuka Sugar.
Overall, there is no downside on the stock, but unless and until the moves are initiated by the company to monetise the assets and mobilise the funds to the extent of Rs 1,200-1,500 crore, I have a negative view. The stock can move in the range of Rs 28-Rs 35. Q: What is your view on the valuation that Max India has got for the deal and what is the potential of this stock beyond Rs 200 level?
A: Firstly, by off loading that 9% stake, they made a profit of Rs 800 crore.
The insurance business has been valued at Rs 10,500 crore and the company still holds 70% of the business, if you see the market cap, the value comes to about Rs 7300-7350 crore. Max India has been a very dull stock with limited activity in last one year.
The share has been languishing in the range of Rs 160-195 again corrected. I don’t think that it can move beyond Rs 210-215 and may be profit booking again will come at those levels and bring the stock in the range of Rs 190-200.
This stock looks favourable for the traders. In next 2 to 5 days, one can play on for a gain of about Rs 10, but I don’t think that one should really remain invested in this stock. Even the long term investors can look to exit the stock at Rs 210-215. Q: What is the downside for IGL from here?
A: Everybody awaits Delhi High Court hearing on April 19. Some relief is expected in respect to the application of the order. On the PNGRB front, I don’t think they will be strict in allowing higher marketing margin to the company.
It is difficult to take a call if network margin can increase from here after or may be there is a compression in margin. Taking all this into account one should expect a price of Rs 220-245 till April 19. Q: What is your view on IPOs of MT Educare and NBCC which are showing complete divergent trends?
A: NBCC will list and settle around Rs 90. There is no point in taking a call on new IPOs because for the first 4-5 days they trade in trade to trade where every transaction results into a delivery. 
MT Educare it has been frozen upward at above Rs 90. There is no reason for the stock to get frozen upward, which translates into a PE multiple of Rs 18 plus. Career Point is available at a PE multiple of maybe Rs 13-14. Definitely this is handwork of the informed circle. MT Educare may settle between Rs 65-70 in a month. NBCC is expected to settle at Rs 90 in a week’s time. Both the stocks are aggressively priced and both do not justify the current price at which they have been ruling now at. Q: Hathway Cables is down about 6%. TRAI may bring in many measures like disallowing of carriage fees etc, how detrimental do you think it could be for Hathway?
A: This tug of war will go on till June 30, which is the deadline for the first four metro’s Mumbai, Delhi, Kolkata and Chennai. Local cable operators and multi-service operators both will make their efforts to have a bigger share. Intervention of TRAI will be a balancing between the cable companies like Hathway, DEN Networks and WWIL.
Hathway is a good entry point for the investors in the range of Rs 145 to Rs 150 and the same applies for DEN. Q: Do you think aviation stocks will continue to be a trader’s delight?
A: FDI in aviation is expected maybe in a week or a month because that’s now the hard-pressed need of the sector and the government.
With the kind of fare hike we have seen in this holiday season, government also will be equally concerned to quickly redress the grievances, which are genuine by the industry, companies and sector. Q: Prime Focus has risen around 25% in last seven trading sessions itself. There are talks that they might monetizing their US subsidiary, have you taken a look at Prime Focus?
A: The stock has risen again. Apart from the US subsidiary monetization there was talk that in the company there will be some stake sale, one strategic investor is coming in. Prime Focus is into multimedia, film and special effect business and with the current trend in business their profitability is taking a hit. I have a negative view on the stock. Have you Read: Friday the 13: Will inflation, Infosys nos move market tom?