Reliance results may surprise market: Tulsian

SP Tulsian of sptulsian.com, says that he feels that the company will give positive surprise. In the Q1 the company reported a PAT of Rs 4500 crore and according to my calculation the PAT for this quarter will be Rs 5,380 crore, and the increase can be largely attributed to refining and petchem business.

Below is the edited transcript of his interview to CNBC-TV18. Q: The Hyderabad Court has issued a non-bailable warrant against Vijay Mallya, promoter of UB Group. What is the case about? Is it about dishonouring of cheques?
A: Unless and until we know the exact reason for the issue of warrant it would be difficult to make a comment. It can either be the case U/S 138 of NI Act, which is dishonour of cheque or the suicide of one of the employees or any other matter. I don’t think there is any serious matter and it should be resolved in a week. The due process of the law has to be complied, where Vijay Malaya has to personally appear in the court and then a bail will be granted. Q: What is your view on TTK Prestige?
A: The numbers were disappointing and poor now and even in the Q1 and despite of increase in the top line. The bottom line has also shown lower performance compared to Q1. The valuations are also looking expensive.
However, trading grip is strong for this stock. If the stocks corrects to Rs 3200-3250 in next 15 days then this stock can again move back to Rs 3600. It won’t be feasible or profitable to go short at these levels. The movement is very volatile it swiftly corrects and goes up by 5-6 percent due to strong trading grip. I think Rs 3250 is the trading support in the near term. Q: Reliance will post its results on Monday. What’s the expectation this time around and ahead of the numbers what do you expect the stock to do?
A: I think the company will give positive surprise. In the Q1 the company reported a PAT of Rs 4500 crore and according to my calculation the PAT for this quarter will be Rs 5,380 crore, and the increase can be largely attributed to refining and petchem business. At the Singapore benchmark it is ruling at USD 8. The company has always been posting better GRM by about USD 1-2. A GRM of close to USD 9.2 can be expected from the company. Despite the closure of one domestic refinery unit for 16-17 days, the numbers will surprise the market. Q: What is your view on DCB and the numbers they delivered this quarter as well as HDFC Bank?
A: DCB have been posting good numbers. Their asset quality has been improving from the last 3-4 quarters; the stock has been seeing good resistance at Rs 50 from last 6-8 months. The market also cheered the Q1 results. But with 80 branches if you see the valuations, and the market cap of around Rs 950-1,000 crore, the value per branch comes out to Rs 12 crore which is quite high.
There used to be a trigger that DCB is seen as a takeover target by HDFC Bank and they are only waiting to see improvement in asset quality of the bank which is gradually happening. Traditionally, the stock has been ruling quite expensive and it has not been able to move past Rs 50 in last 6-8 months. So, profit booking can come at Rs 49-50 level and the stock can correct.
HDFC Bank has been a consistent performer and they have posted a continuous 30% y-o-y growth in last four years. So, it is the most expensive stock and on a price to book also it is ruling at 4X.  I don’t think that there is any kind of complaint or disappointment from HDFC Bank and the same trend, same trajectory of the performance one can expect from the next 4-6 quarter from HDFC Bank.