SP Tulsian of sptulsian.com told CNBC-TV18, “I have given a sell call on Jubilant Foodworks, but in the interim these results have come. I have gave the target of about Rs 1,065 for the day, but I think now the stock is correcting to Rs 1,055, so the courageous trader can go short even at these levels with a stop loss of close to about Rs 1,075 and look for a target of Rs 1,040. Lot of longs are seen built up in the stocks and that may get liquidated so one can catch a gain of Rs 15, 1.5 percent in remaining 45 minutes of so.”
He further added, “The second short call is on Idea Cellular which I have been giving for last three days and I am continuing with that with a day target of Rs 125 with stop loss of Rs 128.”
For a slightly longer term on Jubilant Foodworks SP Tulsian said, “If you really recall at that time too much of the momentum was there in the stock and at those levels we have seen the promoters reducing their stake on two occasions and you can say that there was the irrational exuberance prevailing in that stock. If you are not able to post a growth of 40 percent or 35 percent hereon which is impossible to come, now market should reasonably accept a growth of 15 percent to 20 percent, so you cannot justify a PE multiple of 35-40 times. The thumb rule is that suppose if you are giving a growth of 20 percent you justify a valuation or a multiple of maybe 20-24 times. I agree that in the due course of time even the PE multiple will keep on shrinking. If you take practical assumptions on the growth that can make the stock to correct to about Rs 750-900.
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