Here are some fundamental trading ideas from SP Tulsian

I don’t think that it will be correct to presume that the entire or major purchasers will move to buying Titan because for the simple reason that now the taxes are at par with all the jewellery makers. I am not saying that the things will continue to be in the cash segment also because when you talk to the jewellers with the new law having enforced that if you find more than Rs 2 lakh getting transacted and if the department catches the receiver or the person who has received the amount of more than Rs 2 lakh in cash, he will be charged 100 percent penalty or 100 percent fine.

Actually when you talk to the people, like for the BKC complex, diamond bourses and all that, they all say that things have become really very strict. So, even if I presume that everything in the jewellery market will be in the books only and nothing will happen out of books, then also even if you presume that as I said that it will be the making charges which will really be the key because from here on metal charges will not make a difference.

Come on the diamond jewellery, diamond jewellery will again be having a very differential between the selling prices. If you talk to the people, in the trade, they offer you the discount of as high as on the published price, again I am talking all official, nothing of the cash element or nothing of that sort. The discount is offered anywhere between 20 percent to 30 percent or maybe 20 percent to maybe 25-27.5 percent which is not seen available in case of Titan jewellery because actually in the case of Titan jewellery, it will all be fixed and you have no kind of scope of discount which is seen offered by the diamond jewellers to the diamond jewellery purchaser.

So, I don’t think that the kind of upsurge which we have seen, of about 13-15 percent in the share price, is justified. This is more of the irrational exuberance and I see no reason why one should not go for profit booking and look to buy again at lower level in the stock.

Surabhi: One stock that has been in focus today is Oil and Natural Gas Corporation (ONGC). It has been moving higher steadily. Couple of brokerage notes came in and some of these foreign brokerages are sounding optimistic, they are raising their ratings basis on the expectation of higher gas prices come October. Would you side with that view?

A: No I won’t be taking a positive view merely based on that because if you see the ONGC gas proportion, I don’t think that things are really significant in their total turnover, number one. Number two, if you see the global production of the gas, is likely to get increased. I don’t see any reason why the gas price will really be moving up from here on.

Apart from that, if you take the calorific value conversion with the crude, the differential which used to be maybe at one point of time about 300 percent between the calorific value of gas and crude has already narrowed down and virtually the gases are now ruling at a calorific value of closer to crude if not high or maybe discount of 25-30 percent which is not attractive.

So, I won’t be taking purely on the basis that gas proportion or the gas quantity is going to get increased for ONGC and then take a buy call.

Anuj: One stock where we have got a lot of queries on Twitter as well, Sintex Industries. Of course the plastic division will list later but how do you value the one that is listed right now? At Rs 24.5 what is the call here?

A: I am not very positive on their textile division, because if you see the situation going forward, the kind of growth which we have seen in case of other textile stocks, the same kind of things have not seen having reflected into their textile working. Probably maybe because though the Sintex was known more as a textile people, 70-80 years old company from Gujarat, but if you see their focus lately has shifted on the plastic division and more we know them by the water tanks and all that.

So, when you don’t have the aspiration or you don’t have any kind of growth plans lined up in your old business, it is like when you compare it with sometimes the Sintex, it coincides with Bombay Dyeing who have lost their focus. At one time they were nearly seen pioneer in that segment. So, I am not very positive on the textile division and the stock which is already listed now represents a textile business. So, I won’t be keeping a positive view on that but yes once the plastic division lists, at that time, at the relevant valuations, we will be taking a call on that piece of stock and not the current one.

Anuj: I just wanted thoughts on Raymond, whether the worst is really over because you had that letter from Gautam Singhania, we had the proxy advisory firm saying that, you just can't get away like that, but the stock is up 7.5 percent right now. Of course textile in general has done well today but thoughts on Raymond?

A: I don’t think that there is any negative seen for the stock. Actually this proxy of the sale of the Breach Candy property was misunderstood by many of the market people also because we all know that there has been family partition in the JK family and now the Vijaypat Singhania or Gautam Singhania chain is controlling Raymond. The building which you see opposite Breach Candy Hospital, there the construction and all going on where the claims by the other family members are seen being made on the property. So, obviously even the present management does not want that the property should go to those chains of the Singhania family.

So, I don’t think that that was unwanted or unnecessary controversy having raised because present management was never a party to it and secondly if you see the kind of talk which has been going on for monetisation or the development of the property of the company at Thane of about 140 acre, plus apart from the GST positive and the kind of valuations which you take a call on, though the profitability or the financial performance has not been very great, but the intrinsic value of the company has seen to be quite high. So, I am keeping a positive stance on the stock.

Surabhi: You did discuss Tata Elxsi a while back, actually both the stocks, Tata Metaliks and Elxsi are seeing a big move today. Any thoughts, would you advise investing in either?

A: We have in fact given a buy call much earlier. So, now probably having seen such a big run up we probably advise investors to go for profit booking because maybe the other comparable peers are seen to be better instead of remaining invested in both these stocks.

Surabhi: Some of the pharmaceuticals stocks are cooling off after the big bounce back or relief rally of sorts that we saw today, I mean the likes of Lupin, Dr Reddys is quieter, a little bit of incremental buying continuing in Aurobindo Pharma. What is the advice now?

A: We have been saying that remain away from the pharmaceutical stocks but maybe as a compulsive buyer there have been only two or three stocks which we have been giving a buy call i.e. Aurobindo Pharma, Glenmark and Divis Laboratories because I don’t think that the downside is seen in all three of these stocks and any positive news once comes in can make this stock move up higher by about 8-10 percent the way we have seen in case of Aurobindo Pharma post Q4 numbers, the things have gone up by about 10-12 percent.

Same thing is due for Glenmark also. If any kind of positive news flow coming in but I don’t think that there is any point in taking positive call on any of the other stocks whether it is Lupin or whether it is Dr Reddy. So, keep the neutral view on the pharmaceutical stocks, remain away. Unless and until you have the compulsion to go for buying any large pharmaceutical stocks then we only advise these three stocks i.e. Aurobindo Pharma, Glenmark and, Divis Laboratories.