Concern remains on GMR; enter Suzlon for long-term: Tulsian

In an interview to CNBC-TV18, SP Tulsian of sptulsian.com recommends Suzlon Energy to long-term traders. He says the news of Suzlon Energy's debt restructuring is actually positive news for the stock. He says anyone with a couple-of-years interest in stock, can take up Suzlon Energy.

Tulsian also says that despite GMR Infra's under-performance, its effect will only be "mildly negative" on the stock. "So overall, concerns will definitely remain, but since the stock has corrected close to about Rs 18 already, not much downside will be seen, It may see a fall of about a rupee or so," he adds.

Also read: GMR Infra cracks after Maldives cancels airport project

Below is the edited transcript of Tulsian's interview.

Q: GMR Infra has been under-performing because of all these concerns from Male. How do you see that situation impacting the stock?

A: I think the effect will be mildly negative. I am not too worried for the termination of the contract, because if you see their overall airport bouquet, that has not been doing well. However, that has been because of the drag by the Delhi Airport, but Male has been seen as a good property or as a good contract having taken by the company. Sometimes corporate governance issues emerge on the scene, like whether the process by which the company was acquired is really good or not and what kind of rub off effect will it have on their other airport project. We have the CAG report against land parcels given to the company and that is a negative report. So overall, concerns will definitely remain, but since the stock has corrected close to about Rs 18 already, not much downside will be seen, it may see a fall of about a rupee or so.
 
Q: How do you approach Suzlon Energy?

A: It is positive news for the stock. I have been keeping my positive stance on it. If you see the language of the bankers, they have been very much supportive of the company and rightly so, because this is the fifth largest wind turbine company in the world. If you see the top-line of USD 5 billion, it is quite intact. The only breather the company requires, is about a couple of years moratorium on account of the repayment or maybe the interest. REpower is a very priced asset which is valued at close to about USD 3 billion. So the Indian bankers may assume the date of the German banks and can make it as a consolidated entity. Overall, I am positive, but you need to have a very long-term view. You cannot keep a short-term view as a trader. If you are really an investor for a couple-of-years view, you can expect good returns from the stock.

Q: Is there any specific reason for the rally on textile or is it just trading interest?

A: I think it is largely trading interest. If you really see the rally, it is not sustaining. One can exclude Century Textile from that lot, because this is not a textile company. However, if you take the case on the other stocks like Arvind or Alok Industries, things are not really working on a sustainable basis. So it should be taken more as a trading rally only.