Cement, pharma and banks look attractive: Tulsian

Anuj: The sector of the moment today is pharma. It looks like the market at least on this particular index is showing the signs of short covering and they are buying Dr. Reddy's, Sun Pharma, Cadila Healthcare all of them up quite a bit. Do you think these stocks can maybe recoup some more losses from here?

A: If you take a technical view then definitely they will see some kind of recovery still from here on because the way actually - before that let me just put one thing here which may not sound very soothing or very respectable but what I have seen the irrational behaviour having seen from the experts and the investors in how many incenses we are going to taste when the market goes off we see all the experts give the buy call, yes, that was a buying opportunity, everything turns out to be good in the hindsight. We have seen Brexit, we have seen Rexit, we have seen this US presidential poll and the polls which we have seen if you take the US media more than 50 percent has not expressed their opinion, 25 percent have expressed opinion in favour of Hillary Clinton. Only one expressed in favour of Trump. So, those things definitely scare the investors.

Now coming specifically on the pharma talking something before the poll and implementing them both are different. US cannot afford to have these pharma ban or cutting of prices or maybe rigid behaviour or maybe scrapping Obama healthcare plans and all that but if you take a fundamental call on all these pharma stocks they are looking quite cheap. But on your relative basis in the morning also I have said that I will probably be looking more on the Non-Banking Financial Companies (NBFCs), cement kind of stocks they are all looking attractive because from here on you don't have any kind of hangover from US or from India and if you state the demonetisation move or maybe the currency move in conjunction with the US presidential election both goes in favour of all these sectors like cement, NBFC, banks and all that. But since you asked me specifically on pharma yes, you are only now seeing the short covering but the renewed buying is still to be seen in all these stocks which can make it go up further from here on.

Sonia: You have been bullish on many of those names like Ujjivan etc, how would you read into the numbers?

A: I have been keeping positive view on Ujjivan and in the last couple of weeks when you and Anuj asked me I always chose Ujjivan over Equitas. If you see now the earnings per share (EPS) of closer to about Rs 7. Companies consistently posting these kind of performance, what is the non-performing asset (NPA), just 17 bps. Sometimes you feel that can a microfinance company have such a low NPA with no promoter, professionally managed company as you have said this these stocks should be bought at the time of the crisis. That is what I said in the morning. Yes, I would say the results are really superb. If you see on a sequential basis also it has been showing a marginal growth. So, I am keeping a highly positive view on Ujjivan.

I won't be surprised to see the share moving to its previous high of maybe closer to Rs 550, maybe in the next 3-4 months. So, yes, results are excellent, excellent management, excellent asset quality, no hangover of any promoter, purely professional management company which generally see these kind of liking by the overseas investor and that is why we have seen the overseas investor having a huge chunk in the company. So, yes, from all the angles my positive view and still as I said I am expecting it to move to a level of Rs 550 in maybe in next 2-3 months.

Sonia: I wanted your views on the story of Bharti Infratel stake sale is getting closer and closer to culmination of that sale. How are you positioned on this stock. eIt has seen a decent move in the last couple of weeks?

A: I will be keeping the neutral stance on the stock for the simple reason that there is compulsion for Bharti Airtel to exit from the stock for the simple reason of the debt reduction and the huge capital expenditure (capex) lined up ahead of them if you take a specific call on Bharti Infratel the flat kind of earnings these are all annuity kind of earnings which you see which may excite the long term investors like the Price-to-Earnings Ratio (PE) investor and all that but I don't think those are really the cup of tea for the investors those who are looking for growth here in India.

You are right in saying that in the last couple of weeks stock has moved up but if you take the last 3-4 months view post their buyback plans and all that in lieu of all dividend reduction and all that those policies have not really gone well with the foreign investors. If you take a call on the company high promoter stake of 70 percent plus then for a foreign investor holding large chunk in the company they always like these kind of assets. But if you take the Indian public or the retail floor that is very minimal of maybe a couple of percent only in the company.

So, I won't be keeping a positive stance. You may have some kind of trading bump coming in but this is not the stock to have in the portfolio when you are keeping a bullish view on the overall market and when the much better opportunities and ideas are available.

Anuj: Your thoughts on especially the Mumbai-based real estate stocks which were staging a bit of a comeback, the likes of Indiabulls Real Estate, HDIL and the kind of punishment that they are taking in today?

A: I will be taking a positive call and use this as a buying opportunity, more specially the Mumbai based real estate only. I won't be going long on DLF kind of things or maybe Prestige Group or maybe Sobha but yes, if you really take a call on the stocks like Indiabulls Real Estate, HDIL or maybe DB Realty because if you see these companies they are the big corporates and you are not seeing the kind of cash elements which we used to see earlier happening and now with these new realty regulations coming in I won't name the company but I know that even the listed corporate ones they earlier used to sell 2-3 lakh square feet on a pre-launch basis taking a cash of Rs 5,000 square feet, I am just giving live example which has happened, the deal having taken place. Those things are not seen happening maybe because of the lack of confidence of investors making investment in the real estate. So, don't have that cash element or fear of any kind of cash crunch seen happening at these company levels because they can easily borrow from the corporates and all that and the kind of corrections which you have seen today of 18-20 percent in Indiabulls Real Estate, HDIL kind of stocks should be used as a buying opportunity.