Here are a few stock ideas by SP Tulsian

Latha: India Meteorological Department (IMD) has told us that the monsoons are going to be normal, will you start looking at any of the agricultural stocks afresh?

A: I think though the normal monsoon has been predicted by IMD which is at 96 percent, if it is normal, it has to be presumed that it is 96 percent to 104 percent but I do not think that the prediction has been with full conviction given by the IMD because on the El-Nino front and yesterday in the afternoon show, I have said that probably El-Nino will be seen and monsoon this time is coming little ahead of the usual deadline of June 5. I was looking for two things with a certainty, one when it will be touching the Kerala coast which is predicted to be at about May 26-27 this time. So if you have El-Nino somewhere in the end of August and if you have the monsoon onset in Kerala somewhere in the last week of May, I do not think that there will be any kind of problem. You may be seeing the back-ended rain getting affected because of El-Nino but that will be seen overall positive.

It will be difficult to take a call to play on the theme because if you take a rural play then the consumption and non-banking financial companies (NBFC) space are looking good and already both the sectors are doing quite well. If I take a call on maybe stocks like Mahindra and Mahindra (M&M) or Escorts, it is already ruling at the upper end of the range on the valuation front maybe one can take a call on M&M kind of things or maybe NBFCs, which have a rural presence like M&M Finance or maybe the microfinance companies like Ujjivan, Bharat Financial Inclusion, they are all looking good. There may be some kind of political headwinds with respect to the few microfinance companies in respect to Tamil Nadu and Karnataka where the water shortage or the drought kind of situation is seen prevailing now because we have already seen water cutting Tamil Nadu so that may lead to some kind of headwinds for these microfinance companies.

So overall I will not say that this monsoon theme or the normal monsoon prediction theme can be played at this stage at least. One needs to wait for about maybe couple of weeks more to take a call on this theme.

Anuj: Your thoughts on Indiabulls Real Estate. We have discussed it two days back and yesterday as well. It was clearly over-exuberance this 42 percent rally, it was down 10 percent yesterday, do you expect more correction now?

A: We have discussed this yesterday and day before also when the price was at Rs 145-150, I have clearly said that this kind of nearly restructuring move where you are hiving-off the annuity assets into separate company where the expectation or the enabling provision, enabling resolution has been passed. I do not think that that was warranting a rise of about 45 percent. Definitely, these kind of things were seen a pure speculative moment and when the stock comes into the F&O ban next day that itself says that things have all been cornered and Moneycontrol has flashed that Securities and Exchange Board of India (SEBI) is looking into these trades where the concentrated position is held by a few of the people, definitely these kind of things does not warrant.

Maybe investors – I will not call it that for the traders because they all play on the intraday basis or on the swings - should definitely take these as a lesson that whenever you see this kind of upsurge and if they are holding the stock, they should take this as an opportunity to book profit and look to re-enter.

So definitely if the stock corrects by about another 10-15 percent, I will not be surprised because we have been giving a buy call on the stock from Rs 80 where we have been saying that it is a very good buy from a medium-term perspective but if you are seeing a price of Rs 145-150 just in a couple of days, I do not think that kind of rise was warranted.

For full interview, watch video...