HDFC may rally to Rs 690- 700, says SP Tulsian

HDFC may rally to Rs 690- 700, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “We have results of HDFC on June 11 for Q1 and considering the advantage tax payments and the indications or the guidance having given by the management that they are likely to post their growth of 20% on whole of FY13, I think this is an excellent play because if you see the share, in my view I am unable to understand that why these warrants are ruling at a discount of Rs 4-5 over the underlying shares because if you see in the futures, the futures are suppose if now the shares are ruling at Rs 674-675, the futures are ruling at a premium of Rs 3-4.”
He further added, “This is a very good proxy to the warrants because warrants are going to remain tradable till the end of the expiry because the conversion date of the warrants are August 24, 2012 by which you can convert them into the share by paying Rs 600 and now there are no ex-dividend element involved because share is already ruling at ex-dividend.”
“So anybody who is taking call on HDFC shares maybe at Rs 675, they can look to buy these HDFC Warrants which are ruling at a discount of Rs 5-6 because logically in my view if you are paying a premium of maybe about 15% for buying futures in F&O, it is better to buy the warrants. So still I see some upside happening because I am keeping a positive view on the share, I am expecting share price to move to about Rs 690 or maybe closer to Rs 700 by July 11 when the company will be declaring their Q1 results. So positive stance from hereon infact if you see HDFC Warrant has already appreciated about a month back, they were ruling at a price of about 34-35 and now ruling at Rs 70. So they have already given a 100% return in last one month and still I am expecting them to move by about 15-20% from hereon maybe in next week or so.”