In an interview to CNBC-TV18's Anuj Singhal and Surabhi Upadhyay, SP Tulsian of sptulsian.com shared his views on the fundamentals of the market and specific stocks.
Below is the verbatim transcript of the interview.
Anuj: Incremental thoughts on Reliance Industries from here on. Rs 1,583 now on the stock, getting back to the morning highs.
A: Actually if you see, we have discussed post that the annual general meeting (AGM) also and I reiterate the same view which I have expressed that yes, you have a near-term factoring in of the prices have seen happening because of the mild increase because of the one to one bonus and this Reliance Jio plan which is really well structured and a very calculated move which will have a far reaching impact on the peer groups and the benefits of which will start flowing into the company.
Except for that, I do not think that any of those historical data there has been emotional movement probably. This is the longest speech you have seen of corporate history and you have seen the maximum applause, the way we see in the stadium on a batsman hitting six. So we have seen maybe about 40-50 sixes having hit, not six hits six sixes in over and rightly so because even at one point of time Mukesh Ambani had gone emotional in respect to Dhirubhai Ambani which is rightly so because the kind of company having created with multiple growth in all respect, topline, bottomline earnings, earnings per share (EPS) wealth creation, compounded annual growth rate (CAGR) growth and also, yes those things have all been factored in.
But coming on the outlook of the share, the same view is maintained that probably in one year, once the share goes ex-bonus after a couple of months, I will not be surprised to see the share again hitting closer to four digits whether it moves in the range of Rs 950 to Rs 1,000 or it moves in the Rs 960 to Rs 1,040. That difference can only be seen. So share now ruling closer to about Rs 1,600 capable to give you a return of about 25 percent from the current level in the next one year.
Surabhi: While Mr Ambani was hitting those sixes, as you call it, a lot of the stocks as far as cable operators are concerned, we saw what is happening there and even as I look at the screen now for instance, Dish TV is still down about 6 percent. So what is the advice on this front, on Den Networks, Hathway Cable and Datacom, Dish TV? Is there reason to worry?
A: Sometimes you feel that why in fact this all cable or maybe the multi service operators (MSO) should really exist because we are talking of the wireless era, the digital kind of things. I have heard many of the experts expressing concerns on Rs 153 package per month that it will not get paid. But when we see any kind of new additions, I am not trying to criticise. Just take a case like, I do not understand, in fact I am not so savvy, I am not fond of all this movie watching and all that, but if you see Netflix or maybe Balaji Telefilms, we very loosely say that people will not mind paying Rs 70.
Now take the case of Shemaroo. They have started a channel on Tata Sky where you have to pay some Rs 70 per month. If you really want to watch the movies and I have been talking to many people. When we want to take a positive call on a stock like Balaji Tele and Shemaroo, we feel that Rs 70 is nothing. But when we start looking at Rs 153 where you have been offered unlimited data, free handset, voice telephony free, we say that who is going to pay Rs 153 because average revenue per user (ARPU) of the lower strata is Rs 50-60.
I think there is a great resolution which is seen happening. In that era, all this cable, MSO cannot really exist. Even on the Dish or maybe direct-to-home (DTH) kind of stocks like Dish TV or maybe Tata Sky, they are all unlisted, but even there they will be having problem because sooner or later, we are going to see the things happening going into Reliance Jio. So I see this, if you take a broader picture, you have concerns for all these things. You have to write off all these technologies.
Today, you do not find fax in any of the offices which earlier used to be the essential part of any offices. So these kind of revolutions will come in and we have to remain prepared to get factored in. so I am keeping a very cautious view on maybe like Den Networks or maybe Siti Networks or GTPL Hathway which has been a recently listed stocks. Even on the DTH hand of stocks like Dish TV and all sort of things.
Anuj: Housing finance has been one of your favourite sectors. Dewan Housing Finance Corporation (DHFL) based on these numbers, how would you approach the stock?
A: I am not disappointed with the numbers and after hearing the management commentary and if you are keeping a positive stance on housing finance sector which we have, then probably DHFL is seen the cheapest amongst the fundamental valuations. You may have some kind of technical positions or maybe your expectations on the results, but that should not be taken into account if you are a medium-term investor. So keeping a positive stance on the sector as well as on the stock looking to the Q1 numbers obviously.
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