See Jet-Etihad deal in Dec; USL at Rs 1900-2080: Tulsian

In an interview to CNBC-TV18, S P Tulsian of sptulsian.com says he expects the Jet Airways- Etihad stake sale to come through this month. "Though Kingfisher Airlines is also in talk with Etihad, but I don't think that they will really be zeroing in on Kingfisher Airlines. So, I am keeping an eye on Jet with a timeline of end of this month," he adds. Tulsian also says he expects United Spirits to be rangebound at Rs 1,900- 2,050, or Rs 2,080 if stretched further.

On expectations of important economic reforms being passed, Tulsian says he is unsure if the banking amendment bill will get through this winter session of the Parliament. He adds, "I am not expecting the pension and insurance bills to be discussed in this session, so that is a foregone conclusion that those two bills will be postponed to the budget session."

Also read: Sabharwal upbeat on aviation space

Below is the edited transcript of Tulsian's interview to CNBC-TV 18. 

Q: We still have a few days left in this Parliament session. Are you setting a lot of expectations on what might happen next week before the curtains come down on December 20?

A: Now all eyes will remain only on the banking amendment bill. I don’t know whether that can really get through in this session, because if you really see the approach of the BJP, that has not been very positive. I am not expecting the pension and insurance bills to be discussed in this session, so that is a foregone conclusion that those two bills will be postponed to the budget session. So, now all eyes are on banking amendment bill. I have my apprehension of that being passed.

Q: The star sector was aviation. Do you expect to hear a deal sometime in the next week on either Jet or Kingfisher, which can keep this momentum going?

A: It is most likely, that we are going to see the deal happening or maybe getting consummated in this month, if not in this week. I am keeping my eyes more on Jet Airways with Etihad, because there has not been much progress seen with respect to the debt redemption or the debt payment by Kingfisher Airlines. Though Kingfisher Airlines is also in talk with Etihad, but I don’t think that they will really be zeroing in on Kingfisher Airlines. So, I am keeping an eye on Jet with a timeline of end of this month.

Q: You have been quite cautious about United Spirits ever since it went to Rs 2,200, but the stock has now come down quite a bit to Rs 1,800 level. Do you think it’s a good idea to go and buy it again?

A: I have been keeping my view that Rs 1,900-Rs 2,050, or maybe Rs 2,080 if stretched further, seems to be the range in which the stock is likely to move. I have indicated that the stock is likely to continue to trade in this range only because now there are not many opportunities. Since the stock has corrected to the level of about Rs 1,900 or Rs 1,920, I find this stock interesting again and expect that price can move to about Rs 2,040-Rs 2,050 in the next week.

Q: What do you do with sugar? Balrampur Chini was down 15 percent this week, Renuka lost 8 percent. Do you see this weakness persisting?

A: No, I think that all sugar stocks seems to have bottomed out. From hereon the Tamil Nadu stocks will really be doing quite well, because they have the comfort on the cane pricing front. They have good realisation. They have access to the export market also. It is even coming specifically on the UP front also because of the increase in the production, which is expected to be seen up this year, by about 12-15 percent. That will be a big positive for those mills. The differential between the cane price or the conversion margin of Rs 6-7 still persists for the sugar commodity as a whole, apart from the better realisation by them in the distillery and the co-generation front. So, overall the weakness seems to have bottomed out. I am keeping a positive stance on all the sugar companies with more preference on the Tamil Nadu-based sugar mills.

Q: Do you see the Nifty making any dash towards 6,000 next week? Or in your eyes, it is unlikely?

A: It is unlikely by the expiry of this series. Only the last two days, which will come in the January series, seem to be having some fireworks. Otherwise till then, things will remain rangebound to a bit subdued.