Positive on Sintex, Voltas; negative on Crompton: Tulsian

SP Tulsian of sptulsian.com, says that he has a positive view on Sintex because there is no fear of FCCB redemption happening and the share can move to Rs 85-90. For Voltas, Rs 100 looks a strong support for the stock and a strong resistance maybe seen at Rs 118-120. I will keep myself away from Crompton Greaves because nothing substantial or comforting is seen from the stock.

Also read: Sensex, Nifty close in red despite IIP surprise; autos zoom Below is the edited transcript of his interview to CNBC-TV18. Q: How do you read the market concern about royalty from HUL and do you think it is overrated?
A: I will not call it overrated because if this possibility happens then it will have a straight reflection on the reduction in the EPS of the company, which the market may not like.
One can't rule out that this is not likely to happen because if you see the real royalty having being charged this seems to be quite low when compared to the other foreign promoters, which they have been charging in their Indian outfits. So one cannot rule out that the fear is unfounded or it is not likely to happen, so one has to be little cautious. If that happens then there will be reduction in the earnings per share (EPS) so we are seeing this weakness. Q: GAIL has lost close to 2.5 percent. If the cap on LPG cylinders is increased to 9 from current 6 then what impact will it have on GAIL and others?
A: It will be difficult to take a call but I don't think that it will be too negative for GAIL because ultimately everything depends on the subsidy sharing and that major portion has to come from the Government of India. I don't understand why the fear should be there in respect to GAIL alone. So, I am not taking too negative stance because of that but maybe this could be the sentimental negative which we have been seeing on the stock happening. Q: What are your thoughts with regards to NMDC offer for sale (OFS). Most brokerages are of the view that it is a good entry point?
A: Yes, this is a very good entry point but I am little perturbed or little disturbed in respect to the price. News indicate that there are bids for 12.5 crore shares at Rs 147 maybe sub Rs 148. The issue is very attractively priced.
Going by the share holding pattern, 90 percent is hold by Government of India, 8 percent by the LIC and the domestic institution, definitely FII should show much interest in this issue. In fact, I need to wait for the quality of the investors, who will come to subscribe the issue and price also.
If the response comes below Rs 150 or below Rs 152-153 then it will be called as a dull or lukewarm response but it is too early. In fact we get all major bids in the last half an hour or so, so one has to wait. But I am hopeful that issue will sail-through and LIC may not have to come for subscribing the major portion of that not at least more than 30-40 percent. Q: What is your view with respect to the news flow on the banking amendment bill?
A: It is very positive to see that BJP is keen to talk to the ruling party for the passage of banking amendment bill. In the current bill, the BJP is adamant that the derivative clause or the power given to the bank to trade in the derivatives is dropped, and then BJP will support the bill. If the Congress is able break the ice and agrees to this demand than that will be positive. This will pave way for the passage of other bills like insurance and pension. The apprehension related to banking amendment bill is now getting diluted. Q: Why are many energy or power stocks are down today like JSW Energy, Indiabulls Power, and JSPL?
A: I don't know the specific reason. It may be a case of profit booking or dim chances of any power revision which led to the correction.  Q: What is your view on Crompton Greaves, Voltas and Sintex?
A: I have a positive view on Sintex because I don't see the fear of FCCB redemption happening and the share can move to Rs 85-90 as the business model is much in place and the company has a cash flow of Rs 400-450 crore every year.
For Voltas, Rs 100 looks a strong support for the stock and maybe Rs 118-120 is seen as the strong resistance. This is a good trading stock. One can buy this stock at Rs 105-106 and sell it at Rs 112-113. I will keep myself away from Crompton Greaves because nothing substantial or comforting is seen from the stock or nothing is expected even from the Q3 numbers as well. Q: What is your view on NMDC?
A: I am expecting subscription to come for NMDC. We have to see how much amount will come from LIC which will be seen as salvaging the issue. The price is very important. If we see a price of less than Rs 152-153 I will be disappointed. Q: Where do you stand on the entire auto space because now many brokerages are coming of the view that Utility Vehicles (UVs) will be the star sector with Commercial Vehicles (CVs) lagging behind. What’s your opinion?
A: Yes, I agree with that view because the competition in CV segment is hotting up. So maybe the two-wheeler will be on the top followed by the passenger car segment and then thereafter the commercial vehicles.
So, in this scenario one can have a positive stance on Hero MotoCorp and Bajaj Auto and amongst the others I am keeping my positive stance on Mahindra and Mahindra (M&M) and Maruti. Profit booking is adviced in Tata Motors. If you see the trading pattern of the stock for the last maybe couple of weeks it is finding very difficult to move past Rs 285 and maybe any big profit booking if comes into the stock we can see it sliding to Rs 255-260. Q: Any view with regards to how exactly the Nifty would possibly trade in the rest two trading sessions considering that we have the inflation numbers, proceedings from Parliament and then the Federal Open Market Committee (FOMC) meet concludes today from the US as well?
A: I think things will remain very range bound, dull and boring. I don't think that the trading range of more than 40-50 points will be seen on intraday basis. But keeping a resistance on the Nifty I don't see it crossing 6000 even maybe for whole of the December series.