Book profits in Peninsula Land: SP Tulsian

After real estate company, Peninsula Land gave a 50 percent return in the last three days, SP Tulsian of sptulsian.com says he will book his profits in the company. “About a month back I gave a recommendation at Rs 40 and if you get a price of Rs 80 just within a month or so giving you almost 100 percent return there is no justification,” he says.

 

Tulsian, however, advises profit booking anticipating a correction in the stock prices. “I won’t be taking it as too exciting now at these levels. I advise profit booking because I am expecting that the share will correct to about Rs 70-72 in next week or so.”

 

Below is the edited copy of Tulsian’s interview with CNBC-TV18.

Q: IRB Infra has become a very interesting trading idea. After the kind of damage that you have seen yesterday what would the most prudent trading strategy be now on IRB?

A: I think it is better to take a bearish call. There maybe some technical upmove, maybe of about couple of rupees or so. Maybe the stock can move back to Rs 122-123, but every rise should be given as a shorting opportunity. With the kind of built-up which we have been seeing on the saga of Nitin Gadkari, the company will definitely be having  a tough time explaining the things. With so much to explain, the stock can fall in the double digit.

 

Q: How do you expect CESC to react to the news of the Firstsource Solutions deal today?

A: I think it will be quite negative for the company. The business it is totally unrelated. The entire cash amount, because the total outflow including the open offer for the company, will be somewhere around Rs 600 crore plus. The 26 open offer on the expanded equity will suck the entire 30 percent which is held by the individual shareholders.

 

So, I do not think that there is any kind of justification. The only solace in case of Firstsource is that it is not a loss making company. They have a very meagre net profit, but that will not be sufficient.

 

Yesterday I heard Sanjiv saying that the existing team is very good. I am not trying to say that existing team is not competent enough, but they would have then definitely ramp-up the financial performance of the company as well. It is a very good BPO company but I do not think that there is any kind of financial sense or even the strategic sense behind this acquisition by CESC. So, definitely it will be negative. I will not be surprised to see the share price falling to Rs 300 maybe in next week to 10 days.

 

Q: Peninsula Land has given a 50 percent return in the last three days. Would you continue to be a buyer or would you take your profits there?

A: I will definitely book the profits. About a month back I gave a recommendation at Rs 40 and if you get a price of Rs 80 just within a month or so giving you almost 100 percent return there is no justification.

 

If you see the Q2 numbers came on the weekend and again on the Monday for the first half we saw the share remaining up by 5-6-7 percent. So, that can just be considered as the effect of the better numbers, but thereafter we have been seeing this buying and with upper circuit hitting for the last three days or so and share having moved to Rs 80-81 there are all kind of talks that one big investor has come in into the stock.

 

But all these things were very much in the public place, even the acquisition of 19 acre land at Sewri from the Bhattad Group everything wes known. I won’t be taking it as too exciting now at these levels. I advise profit booking because I am expecting that the share will correct to about Rs 70-72 in next week or so.