ICICI Bank numbers may surprise the market: Tulsian

SP Tulsian of sptulsian.com, says that PNB may disappoint the market due to fear of asset quality However, ICICI Bank may surprise the market with positive numbers. Axis Bank, Yes Bank, IndusInd Bank and Kotak Mahindra performed well.

Below is the edited transcript of his interview to CNBC-TV18.

Q: What is your view on IRB Infra?

A: I have a cautious view on the stock. After seeing the indications with respect to the payment made by the companies and clarifications issued by the promoters, the clarification will not suffice. The ruling party or the Congress will bend upon unearthing all the so-called scams or allegations against Nitin Gadkari. If the probe goes on then it can take an ugly turn and it will have a direct impact on the share price. However, since last 4-6 months there is non-interest in the stock due to previous CBI allegations against the promoters. There is no point in going for bottom fishing.

Q: What is your view on M&M numbers?

A: The results are good. It will good to see if the operating profit margin comes close to 12%.

Q: Has M&M second quarter operating numbers surprised you?

A: Operating profit margin of 13.8 percent is a very good surprise but the entire result must be checked in more detail. Even if there is any shrinkage or shift in some income or under expenses head. The results are very good.

Q: What is your target on Peninsula Land after looking at its numbers and the take off it has taken in last 3 days?

A: The rally should take a pause. I don’t expect the stock to move beyond Rs 82. In the morning the stock tried to hit the 20 percent upper circuit. At Rs 80-84 there seems to be strong resistance for the stock. A month back the stock was ruling at Rs 40. The company has posted good Q2 numbers where the top-line increased 5.8 times and the bottom-line increased by 6x. The management has indicated that they will sell their remaining area of 2,35,000 square feet in the second half. Even after considering this factor one cannot go gung ho beyond a point. At Rs 80-84 the stock seems to be in the danger zone. The stock cannot be given a fundamental value of more than Rs 72-25. There may be strong resistance at Rs 84 and profit booking can bring the stock down to Rs 72-74.

Q: What is your view on the development on Sun TV buying an IPL team?

A: The development is very strange and I won’t be too convinced that a call to acquire an IPL franchise is made by a listed company.

Q: What is your view on Kingfisher post new development?

A: The excitement can only come for Kingfisher once the stake sale happens in United Spirits, from where funds can be used to start the operations by making payments to banks, creditors and others. However, from the market point of view, this development will result in the up movement of the share. The stock has been hitting both the upper and lower circuit for last 15 days, making life difficult for traders and short-term investors. This may make the stocks to move back to Rs 12-12.50 and again probably we will see the pause if the stake sale in United Spirits doesn’t happen by then.

Q: What is your view on Lanco Infratech post Crisil downgrade?

A: Lanco is unable to monetize their road projects. It was known that around 4000 plus megawatt of power project was under construction. They were planning to monetize those power projects into their subsidiary company which did not happen. With no monetization, huge debt is lying on the books of the company and the default is likely to happen. Unless they monetize assets to the tune of Rs 3,000-4,000 crore, the problem will not be solved. Till then, I have a negative stance on the stock. However, I don’t expect much downside and the stock has a good trading and technical support at Rs 11.50-12. Once the process of monetization starts then the share can move above Rs 15.

Q: OBC surprised on the upside with its asset quality and maintained NIMs. What is your view on OBCs numbers, up around 7% for the stock?

A: I am not too excited with the OBC number. In the Q1 they have improved their gross NPA and net NPA in the June quarter. There is no improvement or deterioration in the asset quality, so I won’t be too excited with the 6-7% up move which we saw today.

It is more non exuberance or there have not been any deterioration in the asset quality so it can be considered as positive. These are the technical forces which have been holding on. In fact, we have seen huge run up in the share price after the Q1 numbers which legitimately justified the up move and that is being held on. The share seems to have reached its optimum value and profit booking may come in the next series once the expiry comes to an end today.

Q: What does the Deccan Chargers' stake sale means for Deccan Chronicle?

A: I don’t think it will be too exciting. One needs to see how the proceeds will be utilised. What are the debt reductions of the various banks involved? What are the investigations coming out from the investigations being carried out by the authorities and the government and the banks and all.

Q: What is your view on PNB, ICICI Bank and other financials?

A: PNB may disappoint the market due to fear of asset quality However, ICICI Bank may surprise the market with positive numbers. Axis Bank, Yes Bank, IndusInd Bank and Kotak Mahindra performed well.

 

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