Indian market is struggling to sail through a difficult market. December quarter earnings and WPI inflation will be the key for the market next week. SP Tulsian, sptulsian.com feels that the Nifty may see a gain of 130-150 on an aggregate basis for the next week.
Indian market is struggling to sail through a difficult phase. Next week, December quarter earnings and WPI inflation will be keys. SP Tulsian of sptulsian.com feels that the Nifty may see a gain of 130-150 on an aggregate basis for the next week.
"If you see next week's events the results are lined up and probably the budget expectations will start catching on from next week. So heavy short built-up in select counters indicates a much comfortable week going ahead," he said in an interview to CNBC-TV18.
Here is a verbatim transcript of his interview.
Q: The market was quite bullish in the run up to the budget. Do you think that will prevent the market from taking ultra bearish calls in the run up to the Budget or do you think that there could be much more for downside after what you saw for last week?
A: I am not expecting downside. In fact what unfortunate part has happened till now when the February series started, it opened on a weak note. Since then it has been languishing and that has made the market to remain quite under owned, the trading positions got liquidated and in many of the stocks people are short.
If you see many of the results which have posted poor numbers like in the PSU banking space like Canara Bank, Bank of Baroda, Punjab National Bank largely got factored into the price. Even ACC and Ambuja Cement, the negatives will get factored in due course of time.
If you see next week’s events the results are lined up and probably the Budget expectations will start catching on from next week. So under ownership, heavy short built-up in the selected counters are all indicating that we will be having much comfortable week going ahead. I will keep my view of about 130-150 points gain on Nifty on an aggregate basis for the next week.
Q: If you had to pick up a couple of stocks as we head into the new trading week either with a trading perspective or an investment idea, which ones would they be?
A: First I will go with news flow and two stocks which come in my mind are Jet Airways and SREI Infrastructure Finance. For Jet Airways the due diligence has been completed by Eithad and now it seems a foregone conclusion that a formal announcement will come in next week. I am expecting the share allotment to Eithad likely to be at Rs 660-665 per share because it will be pumping in close to Rs 1800 crore for about 2.73 crore shares. So once the news flow starts coming in we can see the share moving to about Rs 630-635 and that should be a strict level. I don’t think that people should really be too greedy to look for a price beyond that. There they should look to book profits.
Second stock is SREI Infrastructure where they are looking to sell or divest their loan portfolio of Rs 430 crore of Kingfisher Airlines which they bought from ICICI Bank. This loan portfolio is backed by 200 percent shares of United Spirits Ltd (USL) margin and that will be giving them a good profit. Apart from that the company has also hinted that they will be keen to look for foraying into banking once the banking license guidelines comes out. These are two news based stocks.
Two other stocks as an investment idea which comes in my mind are Bata India and Exide Industries. I don’t think anybody can really doubt about the working fundamentals and pedigree of both the stocks and both stocks having corrected, Bata having corrected ahead of the numbers and Exide having corrected after the dull Q3 numbers also gives an entry point in both these stocks with a view of about one month or so as pure investment ideas
Q: Do you see any big accidents in the next week in the midcap earnings because you have a lot of vulnerable names like Voltas, GMR Infrastructure etc that come out with numbers?
A: Considering the trend we have seen in midcap stocks that there are all possibilities, you cannot rule out anything. Even the estimate sometimes does not work. I am not referring that in specific context to Voltas, probably things may be dull because of the kind of numbers having posted by Blue Star also indicates the same thing. Overall I don’t think it will be a prudent idea to play ahead of the event like results in case of midcaps. So it is better that we play cautious ahead of the event.