Here are SP Tulsian's views on the newly listed Advanced Enzymes

In an interview with CNBC-TV18, SP Tulsian, sptulsian.com, shares his views on the newly listed Advanced Enzymes and explains why he is bullish on the stock. He also talks about Crompton Consumer's numbers in the first quarter earnings. He also discusses Tata Steel and the UK limbo. Below is the transcript of SP Tulsian’s interview to Anuj Singhal and Sonia Shenoy on CNBC-TV18.Anuj: First a word on the new listing of the day, Advanced Enzymes and at current levels, what should an investor do?A: I am keeping very positive view on the stock and if you have maybe about 2-3 years view, probably this will prove to be the best stock to give the investors returns. And if you really see the kind of behaviour now, actually the stock has seen an oversubscription of closer to about 390 times in the high net worth individuals (HNI) category and we always see that in the last half an hour, all the trades have to get liquidated. So if those who have a medium-term view at least of six months, and if they get to see a price of Rs 1,175, or maybe Rs 1,160-1,175, that makes a very good entry point because if you really quickly come on the financials or maybe the fundamentals of the company, having seen an EPS of Rs 36 or FY16, I am expecting company to post an EPS of Rs 47 for FY17, Rs 60 for FY18 and for FY19, I am expecting it to be anywhere between Rs 78 and Rs 80. So, the kind of growth which we will be seeing, compounded annual interest rate (CAGR) on the bottomline of more than 25 percent will always be seen giving a very good discounting to the stock. And as I said that if you have Rs 48 EPS, I will not be surprised that why you should not have a discounting of may be 32-34 times. So, maybe with a medium-term view over six months, I am expecting the share can move to a level of Rs 1,500 as well. But, this makes a very good entry point because maybe the stock will remain subdued for couple of days, as I said that because of this stayed adjustments and all that. But once it takes off, I will not be surprised to see it moving very sharply by Rs 100-150 as well in the next 15-20 days.Sonia: I wanted your view on this because the investment of the company is now behind it and most of the hospitals that they have added over the last three years will now start to bear fruit. Do you think that there is a multi-year rerating that is in place for Narayana Hrudayalaya or do you think that the best is already in the price?A: If I take a call on this numbers, for the Q1, definitely numbers are looking good because if you really see the operating profit having risen to Rs 36 crore. But if I compare it with Apollo Hospitals, quickly, on a broad parameters, still first take a market cap. Apollo Hospital has a market cap of Rs 19,000-19,500 crore. Narayana Hrudayalaya has Rs 6,500 crore. Exactly one third. But if you take a top line, Apollo Hospital has a topline of closer to about Rs 6,000-6,500 crore while Narayana will not have a topline of more than Rs 2,000 crore if I just take the current year’s performance. And I disagree that the investment phase is over, because investment phase is continuous feature. Even for Apollo Hospitals having so many beds, still they are into the investment phase. That is why, both the companies have interest liability and not worried for the interest liability. But come on the earning part. I have my doubt whether the Narayana Hrudayalaya will be able to post the EPS in the double digits. Forget double digit, even closer to Rs 5-7 will be too difficult considering Rs 200 crore is the paid up equity as against Rs 26-27 EPS of Apollo Hospital. So, on a pure financial parameters, maybe the turnaround, maybe the growth things because of the lower base may look quite good, but if you really ask me or may be given choice, I will always be with Apollo Hospitals rather than Narayana Hrudayalaya because ultimately everything boils down to the bottomline also where we see the profit after tax (PAT) of closer to about Rs 350-360 crore in case of Apollo Hospital looking to the size, stability, track record. So still maybe the market is giving this kind of thumbs up to the results which are showing, I am not saying that extraordinary performance has been shown, because even if you take a topline having increased from Rs 428 crore to Rs 452 crore on a sequential basis, and operating profit has risen from Rs 32-36. So, there has been a minor uptick. But I, on a valuation parameter, if I compare with Apollo hospital, still I find Narayana Hrudayalaya to be expensive.Anuj: I remember when this whole UK limbo was going on you were not too positive on Tata Steel and the stock has corrected. But it is now again making a move back to its previous highs. Do you think it is an exit opportunity, any kind of positive news flow or do you think the stock can meaningfully rise from here?A: This should definitely be used as an exit opportunity because what I have been maintaining specifically in respect to the exit from the Europe business for Tata Steel is they are not fetching anything. Even if I just rely on this story now what kind of realisations or what kind of money recipe we are talking off 100 million pound i.e. Rs 1,000 crore. I don't think these kind of things can be reconciled with the fact that the company will not be making losses from here on. Here it is not the question of what will happen to the debt which has been existing in the books of the company to the extent of Rs 80,000 crore.Mind it, that the company, the unit, the Corus was acquired by Tata Steel in 2007 for USD 13.2 billion and in fact for that they have drained so much of their investments and funds and all that and just to say that we are getting rid of a loss making company even at a nil cost I am not there to subscribe to this argument.Now come on this specifically in respect to the other companies like JSW Steel and all that see the kind of performance they have all been reporting an EBITDA of Rs 9,000 plus, Rs 9,200 which you have not heard of. I doubt that that kind of performance will be shown by the Tata Steel for their Indian operations also. I will be definitely expecting an EBITDA of closer to about Rs 8,000 per tonne.So, overall the weight of the Corus Steel is going to continue on Tata Steel and I am not too happy just merely on the pretext that they are exiting from the loss making operations. They are not exiting totally from the Europe operations. Apart from that south east Asian operations also continue to see problem of the viability. So, overall honestly if you really ask me I don\\'t see any reason, this I have been repeatedly saying for the last one year that if you want to remain in a steel stock it is JSW Steel when it used to rule at Rs 700 or so and the stock has already risen to a level of Rs 1,700. So, if you have any compulsion to remain invested in Tata Steel do it otherwise this is the right time even now to exit from Tata Steel and move to JSW Steel kind of stock or even if you want to remain in the steel or ferrous steel industry only.Sonia: I wanted to ask you your views on Crompton Consumer. That stock is seeing a big move right now. You have told us in the past that you prefer Crompton Greaves to Crompton Consumers but now at this juncture what do you do with a stock like Crompton Consumer?A: Looking to the results definitely the results are looking quite good and now people have started comparing it with - rightly so - with maybe stocks like Havells and all that. But if you really take the valuation and maybe the situation because let us not forget I don't know how many of them have tracked it but the kind of reporting which the company has shown FY16 is a six months performance and people probably have got misunderstood that the growth can be four times while it will be a marginal growth that means the growth could be double. Because the FY16 numbers were only representing six months because while I have got many of the queries also where it has said that the company will show a growth of 100 percent plus but it is not so.And yes, the one thing which I didn't like about the stock is that still the company is carrying the debt position or they have the interest liability while if you recall when it was a consolidated entity there was not interest or debt element in respect to the electrical business for which the company is engaged into. So, keeping a mild positive view because of the good numbers, Q1 numbers seen from the company and overall FY17 numbers were going to be good and the kind of run up which we have seen in the peer stocks like Havells and all that are giving a good valuation to the stock as well.Anuj:Muthoot Finance its being doing quite well since its numbers. We all have the example of Manappuram which of course was rerated, but do you expect similar rerating in Muthoot as well?A: Yes, in fact, Muthoot and Manappuram both and you are right post the numbers in Muthoot Finance and the kind of diversification they have all been making in the other areas of the financing also. Now they just can’t be called merely the gold financing company. They have been moving in consumer finance, housing finance, microfinance I agree that the scale has all been picking up, but the kind of performance they have all been showing and aided by the positive view now building up on these all NBFCs are really helping both of them, so yes I will keep my positive stance on both of them going forward.