Stay away from Tulip Telecom, Varun Industries: SP Tulsian

SP Tulsian, sptulsian.com advises traders to stay away Tulip Telecom and Varun Industries. He is positive on Royal Orchid.

Tulsian told CNBC-TV18, “Tulip Telecom, which has been hitting lower circuit for so many days and maybe the stock becomes or comes to a value where again you start seeing some value, similar is a case with Varun Industries. But you really need to take a call on the credibility of the promoters.”
He further added, “If you recall about a year back in case of Varun Industries they have said in Madagascar so much of the natural resources have been found when the share used to rule at Rs 250 and with the kind of pledge and financials. So, I won’t be really trusting the financials and even the promoters of both the companies. So maybe it may excite the traders when you have these kind of news flows that the company has gone for the CDR – you see these kind of shares again hitting upper circuit. But that will be for a shorter horizon. Maybe in the next 2-4 days you will again see the stock correcting or maybe correcting back.”
“Yes, for Royal Orchid, since it is an asset-backed company – they have the hotel properties at various places. We all know that hotels are not doing well. The hospitality industry has been really finding it tough. So, maybe yes, one can take the value that if they monetise some of the property or if they have some reschedulement of the debt from the bankers. They have requested for the interest reduction also in the initial year, which can get recouped in the later part of the repayment schedule. So overall one can take a positive call on Royal Orchid, but I will remain away from Tulip and Varun Industries.”