Short Infosys around Rs 2710- 2715, says SP Tulsian

SP Tulsian, sptulsian.com advises traders to short Infosys around Rs 2710- 2715.

Tulsian told CNBC-TV18, “It will be wrong on any traders’ part to go long on Infosys at more than Rs 2,700 because the rise which we have been seeing of 15-16 percent today is a combination of both that is short covering as well as building up of the long positions and in building up the long positions you see the exuberance also happening because the traders those who just follow the trend, as till yesterday they were following on the short side, today they are following it on the long side.”
He further added, “If I go on the fundamentals the share is now ruling at a PE multiple of more than 16 maybe 16.2-16.3 if I take the expected earnings per share (EPS) of about Rs 165-166 for FY13 and if you apply the same PE multiple for TCS with EPS of about Rs 74-75 for FY13 that is ruling at a PE multiple of 17.3 times. So I do not think that the differential of 100 bps is justified in my view looking at the track record and looking at the consistency in the performance having posted by TCS. This differential should have been at least of 200 bps. So either TCS rise from hereon with a PE multiple of 18-18.5 or Infosys contracts to a PE multiple of close to about 16 or so. So you cannot say that what will happen unless and until we see the results of TCS. So interim it is better to remain away maybe the brace traders can look to go short at a level of Rs 2,710 to Rs 2,715 in the cash rate. The equivalent rate has to be seen in the future.”
“So it will be more courageous on part of – because the moment we see the positions also shifting - yesterday we have seen the positive bias on oil and gas in spite of no reason for that sector to perform well. Today that position has shifted in IT. So, maybe the positive bias will remain on IT for a week or so but you never know the position may get shifted to the bank maybe again the traders will come back to cement because the valuations have become attractive if you talk of Ambuja Cement, ACC, UltraTech Cement, Shree Cements, in fact they are all looking quite attractive. So the shifting of the position from one sector to another sector is happening so swiftly in the background, I won’t advice to long on Infosys maybe the brave traders can go short at Rs 2,710-2,715."