Positivity in mkt to continue till expiry: SP Tulsian

SP Tulsian of sptulsian.com expects the positivity in the market to continue up until expiry. "I am expecting the positive bias to continue with a level of about 6200. So, 6000 plus for this week, 6000-6050 on the Nifty Future but thereafter the things are likely to continue till the expiry on the positive side,' he told CNBC-TV18.

  Super 10 multibagger recommendations: Click here for full list Below is the verbatim transcript of his interview on CNBC-TV18. Q: If we close in the red today it will be the eighth straight session of a fall for the Sensex, I mean a relief rally is surely on the cards. To what extent do you think the market could take itself on the upside? A: I gave my view on Friday that I am expecting the market to behave positive from today. I won’t be able to comment whether it marginally closes in the negative or if marginally closes in the positive but the indications which we have been gathering since morning is that the weakness is definitely not seen now. I am not talking of the event based stocks where the results are all due but I am not keeping my negative stance on the market as a whole. For whole of the week, I am maintaining my positive view, maybe for one or two days because you cannot have upside for the entire five days but overall for the week I am expecting the index to trade positive. I am expecting that the Nifty Future is definitely going to cross 6000 maybe in next two to three days time and that is going to get sustained. However, if you need take a call till expiry for whole of this series, which is expiring incidentally on the Union Budget day, so the entire Budget effect is going to get factored-in into the Nifty on the 28 February. I am expecting the positive bias to continue with a level of about 6200. So, 6000 plus for this week, 6000-6050 on the Nifty Future but thereafter the things are likely to continue till the expiry on the positive side. Q: The Supreme Court has ruled in favour of Reliance Power’s Chitrangi project. What are your thoughts on the same, 3960 MW will be now allowed to come on stream? A: This is positive but you should take this as one of the clearances because the power projects need about 40 clearances. If you have any kind of hurdle like we have seen in case of Reliance Power for their Chirangi project then this is one of the clearances. I won’t call it as a landmark victory for the company or very big positive. If you see the pipeline they have the huge ultra mega power projects into their fold. If you see their execution capacity, that is very poor. If you recall couple of years back the company has very categorically said that by the end of the calendar year 2012 they will be having the operational capacity of 5000 MW which they have miserably failed. If you look at their Sasan ultra mega power project also they have started but it is all happening in phases. So there is huge capex lined up. They have the pipeline of 25000 MW. If I take the aggregate capacity of the power generation capacity, they need to create the kind of dilution, the kind of promoter contribution they will be requiring. So, because of these reasons, I have always maintained my negative stance. Since you don’t have the cash flow from their existing operations, which is now standing to the extent of about 2200 MW of the power generation capacity. Sentimentally or technically, this may look like a victory for the company but I won’t be taking a positive call. On comparative basis or if I need to pick and choose some of the power stocks in the sector, probably there are other companies which are better lined up in terms of valuation, in terms of pipeline in terms of the operational capacity. Q: Additional subsidies will be released for some of these oil marketing companies (OMCs) in the month of March itself. This is source based information but they have got a letter of additional subsidy payment to the tune of Rs 25,000 crore. Could you give a quick word on this? We understand that it will be released in the Month or March. There is no official conformation but this is just coming out from sources right now? A: I don’t understand what is there to cheer about this. The subsidy which should have come in the month of September or may be by December if the marketing companies are getting by March also, the market is rejoicing or taking it very positively. This has been a usual phenomenon that oil marketing companies are paying interest; they are under huge debt, even by availing the working capital finance from the banks and all that. I don’t take this as too fundamentally positive for the companies. The subsidy release is happening and this is usually the case that by end of March when you will be seeing their Q4 numbers, in Q4 they see huge amount of the contribution coming in from the government as well as from the upstream companies. That is the usual phenomenon that subsidy also gets released by government at the fag end of the financial year. So, I am not too excited for this news really. Q: Any thoughts on why exactly these fertiliser companies are up and above, is it just pre-Budget rally momentum which we generally see? A: That is right in fact we always see this pre-Budget rally and pre-monsoon rally in the fertiliser stocks. However, if you see the kind of rise which we are seeing now more in case of the National Fertilizers (NFL) and Rashtriya Chemicals and Fertilisers (RCF) that has to do largely with the low float because this has been supported by the Metals and Minerals Trading Corporation (MMTC) and Hindustan Copper (HCL). You can also add the names of the Hindustan Organic Chemicals (HOC) and the Fertilisers and Chemicals Travancore (FACT) into the list, which all move in tandem. So, either you may attribute this as a pre-Budget rally or maybe the low float magic happening in both the PSU fertiliser that is NFL and RCF. Q: How would you approach a stock like Steel Authority of India Limited (SAIL) which has been under severe pressure and numbers too not expected to be great this time? A: The numbers are not likely to be improves for the next 3-4 quarters. Sometimes you feel that they are so dull and borrowing and in fact coupled with the negative perception of the industry, the kind of problems they have been facing of inventory pile up and all that in which case the SAIL kind of companies have to really offer a very big discount. So, that will get reflected into the Q4 also. So, keeping my negative stance on the stock that ahead of the numbers the things are not likely to be seen anything positive. Q: Any thoughts on PC Jeweller, it is below its issue price of Rs 130 and at one point in time in January it had surged to levels of around Rs 194 as well and currently languishing at Rs 124, any thoughts on PC Jewellers as a whole? A: When they went public at Rs 150, I had said that that is a fair value but the moment it moved to Rs 185-190 at that time I had said that now the operator element has started coming in into the stock. Whenever the operator comes in, he is not concerned with the long-term prospects or the price of the company. He will definitely be making speculative up move and will exit at those levels. These kinds of things are very detrimental and you cannot co-relate that with the company’s fundamentals or maybe with the sector prospects. We get to hear the name that one old operator who was banned by the Securities and Exchange Board of India (SEBI) has been very active and he is exiting from the stock. When they exit then the stock can fall to any level. Conversely, we have seen at that point of time Rs 190, I won’t be surprised to see it falling to low of Rs 100 also. So, this is the pain of these kind of stocks, that is the reason we advise to remain away from them. Q: Oil and Natural Gas Corporation (ONGC) reports results today. Any thoughts on what we can expect? A: I have never been taking a quarterly call on this upstream and the marketing companies because it is so difficult that how much subsidy burden is going to be get booked. I don’t think that anything is really exciting for ONGC for this quarter because the expectations or the estimates, which we have been getting are seen to be quite low. So, on a sequential basis things will be big disappointment. In fact the profit booking call, which I have been repeatedly maintaining when it was ruling at Rs 345-350, the same call continues that the stock may correct to a level of about Rs 285-290. Q: Do you track Dishman Pharma? A: Two stocks, Dishman Pharma and Shasun Pharma have disappointed to a great extent. The kind of frenzy or up move which we had seen in the stocks about couple of quarters back that time also things were very cautious. Dishman had given very good results, about two quarters back and since then people have been taking the call. I don’t think that the stock can correct below Rs 84-85 or so, because the major correction seems to have got factored in but not reliable stocks to track and look to invest into. Q: Any thoughts on Voltas? There is a turnaround which is expected on the bottomline. Would you be quite optimistic on that one? A: I am keeping my cautious stance largely because I am expecting the margin dip. If you really see the expected numbers and the kind of trend, which we have been seeing probably any bad results can make the share to fall to about Rs 85 or so. Last time when we saw the good results coming in from the company, we saw the stock moving up by Rs 20 or so. So because of kind of volatility or the high beta nature of the stock, we are seeing keeping a cautious stance on the company ahead of the numbers.