Positive on Hindalco, Sesa Goa and Sterlite: Tulsian

SP Tulsian of sptulsian.com, expects profit booking to come in Tata Steel and JSW Steel, and after profit booking theses stock can further move up by about four to five percent. However, he is positive on Hindalco, Sesa Goa and Sterlite.

Below is the edited transcript of his interview to CNBC-TV18. Q: What is your view on the Parliamentary proceedings till now? What do you think would come out of the vote in the Lok Sabha this evening?
A: The oppositions have not been able to make their presence felt till mow. Things are looking in the favour of the Congress. Apart from unemployment, they are not able to make any big point to oppose the FDI.
The Congress is using the methodology of using FDI as a BJP-led issue to unite the non-communal forces against BJP. The Congress is using a calculated strategy to take FDI opposition move as initiated or totally mooted by the BJP which will definitely not be accepted by the SP, BSP. DMK is saying that they will support the government. Overall, I think in Lok Sabha, the Congress will be able to defeat the motion having initiated by the BJP. Q: Once the Lok Sabha vote is done today and assuming that it goes through favourably, what is the market expectations with respect to Parliament, the remaining sessions of the Parliament?
A: It is very difficult to take a call at that stage. If the BJP loses, then their behaviour will change and they will not be very cooperative because we have been expecting the cooperation from BJP in allowing many of the bills to get approved.
Initially, the BJP demanded that, unless and until there is voting on FDI, they will not allow the House to function and BJP also said that if the Congress agrees for voting on FDI then we will cooperate thereafter irrespective of the outcome. If the BJP held on to their earlier statement then we may expect many bills to get passed.
But now, I have reservations on FDI in insurance and pension bill as the BJP has categorically said that they are not favouring that bill. If Land Acquisition and bills directly related to corporate world goes through then it will be seen as positive. I would rather wait and watch in the current situation. Q: Many metal stocks have been stark underperformers in this run up to 5900. Would you advocate building some amount of positions in Hindalco, Sea Goa to see a slight bit of an up move?
A: In last 3-4 months people have made a conclusion that these stocks will not perform.
In fact we are seeing positional shorts continuing on these stocks. We saw these shorts getting rolled over for the last two or three series. This is making the shorts to get covered and I am not seeing the renewed buying coming back. However on the non-ferrous metals like Hindalco and may be Sesa Goa, Sterlite combination because Sesa Goa and Sterlite will soon get merged with Sesa Goa. So, I have a positive stance on that. Hindustan Zinc is not participating much in this rally but I have a positive stance on this stock.
In non-ferrous category, JSW Steel Bhushan Steel and Tata Steel, they have all are lying low for quite some time. There in fact we have been seeing some short covering. One can be positive on stocks like Hindalco, Sesa Goa and Sterlite.
Profit booking may come in Tata Steel and JSW Steel and after profit booking theses stock can further move up by about four to five percent. Q: Do you see the start of a big upmove for real estate names? Today, stocks like Nitesh Estates, Indiabulls Realty, Puravankara Projects, Brigade Group, Peninsula are on fire?
A: From last 3-4 months, I have been holding a positive view on all real estate stocks. I have a buy call on all these stocks. I am keeping a positive stance on three pockets namely Mumbai, Bangalore and NCR and on some top 2-3 players. Because of value differential having seen on those stocks, I had a bullish call on Brigade and Prestige for Bangalore, HDIL, Peninsula and Indiabulls Real Estate for Mumbai and on Anant Raj Industries in NCR region.
Due to differential in other stocks, all of them are catching up and there is good run up happening in the stocks like Puravankara, Kolte Patil and Nitesh Estate. I am not too convinced on the performance or the working of these companies going forward, but because of the differentials having widened between the front-liners and smaller companies, things are catching up. I am keeping my positive stance and positive view intact on all these stocks. Q: What is your view on SpiceJet and 15 percent upmove?
A: Etihad made a statement yesterday that they are in talks with two airlines from India to take a stake has given little apprehensions on Jet and given a positive view on SpiceJet.   
Jet has a debt of over Rs 14,000-15,000 crore plus suppliers’ credit so things are not very smooth on that front. So the enterprise value of Rs 25,000 crore has been a big concern for Jet Airways.
In fact, I never take market share as a key factor for deriving higher value or extracting a higher value by any airlines because any foreign airlines if they come and takes a stake in any of the Indian airlines then they will be able to ramp up their market shares by their own standards, goodwill, efficiency or other factors Things may happen on SpiceJet front but it is very difficult to give any call at this stage. Otherwise, there is no reason for SpiceJet to see an up move of 14-15 percent. Q: Your view on Petronet LNG after news of delay in the Kochi terminal commissioning? Will there be any huge impact on capex or P&L going forward?
A: I think Kochi terminal did not contributed to FY13 numbers. We are unsure about the timeline of the delay. If the delay is within three months then probably market will recoup, but if it is delayed beyond that then it will be negative. This was seen as a prestigious and almost doubling the capacity of the companies. So, it depends on the quantum of delay, the share may correct to about Rs 150,  if it remains within three months then the impact will not be severe. Q: What have you made of the 7 percent upmove on OnMobile Global, because it is coming on very large volumes?
A: I do not know the reason. We saw good buying coming in coming into the stock in last couple of months, despite all type of controversy and clarifications coming in. Now renewed buying seems to be coming back into the stock, because we have been seeing that happening with a huge volume. So maybe the positive stance may continue for sometime which can make the stock to move to about Rs 54-55. Q: The news of a possible deal for Strides Arcolab is getting louder and then they had some marketing tie-up with Eli Lilly which they signed today as well. Strong run in the stock in the past couple of trading sessions, was there profit booking today?
A: The stock has been under strong trading grip from last couple of months and the stock has moved to Rs 1200 from Rs 800. I place this more into the category of the stocks like
Wockhardt where we see the range between Rs 1,600-1,750. So probably maybe the strong run-up has come to a halt where Rs 1,200 can be taken as a resistance and I expect that stock hereon should move within a range of maybe Rs 1,125-1,225 because I do not think that any negative news flows hereon can make it correct. But this seems to be more now a trading and momentum play within that range. Q: Are you bullish on Larsen & Toubro Finance Holding?
A: Yes, in fact after seeing the profit booking in the last 15-20 days, the stock has again resumed the upward rally. In this second round of upward movement, one can expect the old high of Rs 86 to happen again in the near term.