Here are SP Tulsian's top trading ideas

In an interview to CNBC-TV18's Anuj Singhal and Surabhi Upadhyay, SP Tulsian of sptulsian.com shared his views and outlook on the fundamentals of the market and specific stocks.

Below is the verbatim transcript of the interview.

Anuj: I know you have not liked Page Industries' valuations in the past but at lower levels, is it a buy for you if the stock corrects or would you give it a complete pass?

A: The reason for not liking is the stagnation in the growth which we have seen. If you want to give a price-earnings ratio (P/E) multiple of 40-45 or 50 to any stock, you must see the earning growth in the same ratio seen coming in for the company as well. But we have not seen, there is no point, I have heard Navin saying that the input credit of the lease, rental and advertisement of the hoarding boards, or maybe the advertisement will all be seen receiving. This is nothing new. This has been very much well defined. This is the thesis of goods and services tax (GST) that all the input credits will be given.

So if we want to highlight something  positive, we will try to collate all the positives. And if we try to highlight negative then we collate all the negatives. Honestly, I do not see any reason of that input credit of the lease rental space and the advertisement being available now. That was known very well and yes, coming on the Rs 1,000, below Rs 1,000 lower GST rates and all that, but see the kind of valuations which we have been seeing. I do not want to talk of the companies in specific.

I have been going through one company. Huge inventory piled up of about maybe 4-5 months or six months. I am not saying that is happening in case of Page Industries. In fact you have seen 3-4 companies where the current assets having written off or specifically the inventory having written off, just in one quarter, the companies have posted 10 times losses.

Case in point has been Mandhana Industries, Alok Industries, Bombay Rayon Fashions. I am not saying that they are the comparable peers. Mandhana Industries used to show a profit of Rs 60 crore every year. Shown an inventory write off of Rs 600 crore in one year. So what I am trying to say that these kind of branded goods, you are all very jubilant, very positive, but high inventory, I can understand for the receivables. Sometimes, Sundry debtors can get tolerated.

But if the inventories are so high there are cause of concerns which needs to be addressed. I am not saying that that particularly is prevalent for Page Industries, but I am keeping neutral view on all these garmenting or maybe the branded innerwear stocks like Rupa and Company or maybe like Page Industries and all.

Surabhi: What is your view on the GAIL?

A: Maybe I will take a call at buying at about below Rs 350 because the kind of correction which we have seen of about 20 percent, I do not have the data but I think it was ruling at around Rs 410-415 in the month of June when the month has started and you have already seen the correction of about more than 15 percent or so. So maybe I will be a buyer at Rs 350 because the stock is definitely seen under owned.

Even the shorts are all seen having built in the stocks and all that and I do not think that beyond a point, the fundamentals of the company can really take a hit. So I will not hesitate in buying as an investor below Rs 350.

Anuj: Just wanted your thoughts on Indiabulls Real Estate. I remember, you had recommended to book profit at around Rs 200 but at what point would this become a buy for you again?

A: Sometimes I wonder that the kind of volatility which we see in these stocks, those who are making it, they should really get qualified for the Padma Shri Award. See the kind of swiftness at which it has moved from maybe a level of Rs 100. We have been extremely positive on the stock from the levels of Rs 80-85 when nobody was touching the stocks some six months back and then gave a screaming profit booking call from Rs 190-200. But see the kind of swiftness from which it has moved from Rs 100 to Rs 200 in these last four months.

And then you see the promoter or trust stake sale happens and thereafter the stock corrects. So this is a classic case of market making and then you have the classic companies. They do not come on the radar of the SEBI also for the investigation. And in fact the stock price of Rs 200 was definitely seen quite risky at that point of time. And you are right that since then we have been saying that get out of the stock.

I do not know, difficult for me to say that what will be the level, but at least till Rs 160, we will not give a look to the stock because as I said that we have been giving a buy call from Rs 90-100, it moved to Rs 200, so maybe allow the stocks to settle because they will be seeing a lot of long liquidations also happening and maybe some kind of delivery selling also seen happening. It will again bounce back but probably that may happen at the level of Rs 160-165. So till then, I will not be taking a buy call on the stock.