Crompton Greaves results may disappoint: Tulsian

SP Tulsian of sptulsian.com, says that maybe on a sequential basis, the PAT or margin is likely to fall for Crompton Greaves. Their consumer division has been posting flat numbers. The power system segment is very critical but their overseas contribution from the power system segment is negative which is dragging down the EBIT margin to 3-4 percent.

Below is the edited transcript of his interview to CNBC-TV18. Q: Titan and Tata Global Beverages are the two stocks which have rallied well today. Of the two, which company posted better results?
A: Tata Global has posted very good numbers even after removing the effect of Tata Coffe and the stock looks attractive. Going forward, we expect Starbucks to open 50 outlets in next six months, though the company has mentioned that they may not be able to meet the target of 50 outlets by March 13. Going forward the pipeline looks quite healthy.
Q: What is your view on Godrej Properties results?
A: The bottom-line has been slightly better, but sequential flatness has been seen. In the Q1, the company has posted higher other income which contributed to a slight bottom-line. If the other income is excluded, then it can be said that the bottom-line has improved on a sequential basis. The top-line has been similar to the Q1. The company has launched many projects and the Gurgaon project has been a big success and the effect of it has not reflected into the financial working. Going forward things are looking quite good. The results are flat. Q: Tomorrow, many midcap stocks will announce their numbers. What is the expectation from Shree Renuka Sugars, and how would you approach the stock?
A: I expect the bottom-line to be in red. Last time, the company presented their Q1 numbers on a standalone basis, however this time I expect the company to post consolidated numbers. The effect of the Brazilian operations, where crushing has started, will be seen in the Q2, will be the key. One can’t expect domestic operations to contribute much as the crushing has been delayed. I am unable to crystallize my exact estimates on the results. Q: What is your view on Wipro post today's announcement? How it would benefit shareholders and how would you approach the stock?
A: Though it is a belated move it is sensible because there is no point in continuing with the consumer and the lighting business in a software company. I think the share was not getting proper discounting because of that mix. Q: How disappointed were you with VIP results?
A: It was not a surprise to see disappointing numbers because after considering their import content and continuous decline in performance in last two quarters. I have been keeping a negative stance on the stock. Q: Crompton Greaves will come out with its earnings tomorrow. How are you placed on the stock?
A: I think maybe on a sequential basis, the PAT or margin is likely to fall. Their consumer division has been posting flat numbers. The power system segment is very critical but their overseas contribution from the power system segment is negative which is dragging down the EBIT margin to 3-4 percent. However, there is no concern about their domestic operations. The performance of consumer division has been flat and industrial product division is also not performing.  Overall, I am not too excited. The disappointment is likely to continue and the share may further fall after result announcement. Q: Jet Airways will announce its results tomorrow, how would you approach the stock? It generally tends to get volatile on the day of its earnings?
A: This time on a sequential basis the results are likely to be better because of the advantage received by both Spicejet and Jet Airways because of the non-operations of the Kingfisher Airlines. The base has been very low, today the share has moved up by Rs 15, but earlier it used to rule at Rs 375-380. Post results announcement, we may see some positive surprises to come in which may make the stock to move in the range of Rs 365-370. Q: As digitization deadline came to an end yesterday most cities we understand are now digitized with Mumbai having 100 percent digitization, how do you approach Dish TV and what kind of potential would you see there?
A: I have a positive view on Dish TV, Hathaway, DEN and Sun TV. The process has been rolled out and they will be seen as a big beneficiary. I am surprised to see why Dish TV is trading in mild negative. For this series I have a target of Rs 84-85 for Dish TV, while on other stocks one can expect an upside of maybe 10-15 percent in next couple of months. Q: Many brokerages have now started to come out with their Diwali picks both in the front-liners and in the midcap space. What are you watching out in this festive season?
A: I would pick Reliance Capital and Reliance Infra, as both stocks looks quite good as both have corrected. Digitization kicker in the above mentioned four stocks can also be looked at. Though both Karur Vysya Bank and J&K Bank are ruling at 52-week high, but still there is good upside potential available. Bilcare can also be considered for investment.