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Last Updated : Jul 28, 2017 03:50 PM IST | Source: CNBC-TV18

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.

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: Thoughts on India Cements? I am sure you would have studied the numbers. And prima facie, even HeidelbergCement India, your thoughts?


A: India Cements numbers are looking flat. In fact I am not so much disappointed but yes, they are looking flat and the kind of expectations which market had probably has disappointed, but HeidelbergCement has shown the disappointing number and in fact that has been happening with Heidelberg for last two quarters or so.

But I do not think that maybe because the June quarter is seen to be the best quarter for all the cement stocks then with the approaching monsoon, you always have the September quarter as dull maybe because of the lower offtake of the cement. But I do not think that that should really be the case that you take a general call on all the cement stocks looking weak and you avoid taking a call. In fact we are keeping extremely positive view on the cement stocks.

Maybe this one quarter that is the current quarter will be having lower offtake, but going forward you need to be very selective and if you take a right call on the select stocks, maybe either on the earnings growth expected to be seen or maybe on enterprise value (EV) kind of basis, on the valuations seem to be quite lower. Those two parameters can justify making investments, but yes, the positive bias continues to remain. India Cement looks flattish kind of number, Heidelberg seems to have given disappointment.

Anuj: Which private sector bank can be accumulated at current levels for a period of five years? Also, are the non-banking finance companies (NBFC) a buy for five years?

A: Amongst private sector banks, probably I can give him three ideas. One is Yes Bank, second is Kotak Mahindra Bank and third is RBL Bank. And these three stocks, we have been recommending for the last about 18 months for Kotak and Yes and since listing for RBL Bank. Coming on NBFC, again, maybe three stocks can be picked up by him. One is Bajaj Finance, second is Ujjivan Financial Services and third could be Cholamandalam Investment and Finance Company. So these three are looking good because I am not going by the other stocks like Mahindra & Mahindra Financial Services and all kind of things due to volatility. Since he needs to have a five year view, these three are again looking good for NBFC.

Surabhi: Thoughts on two stocks. Godfrey Phillips India brought me to the bigger question on ITC as well, now that the rates have settled, we know, we have seen the company's performance. Is there any merit in thinking of buying ITC fresh or is the best behind it and one more stock and that is ICICI Bank, severe 4 percent pressure, what is your advice now?

A: Coming first on ICICI Bank, the kind of run up which we have seen in the last series, the expiry which has happened yesterday, the run up of about maybe Rs 12-15. In fact it went up to as high as Rs 313 and considering the results, Q1, I am not disappointed with the Q1 numbers. In fact largely on two accounts, that there is no shocker on the asset quality and second is the increasing share on the retail lending kind of things.

Both these things are looking quite good and maybe once you take the situation going forward, I am in fact keeping an eye on the Essar Rosneft deal which is of about Rs 83,000-84,000 crore of which about Rs 64,000 crore will come to the banks and all that in which ICICI also will have its share.

So keeping a positive view on ICICI going forward maybe with a one month view or maybe with a three months view largely because of the NPA resolution also in which they have the exposure in nine accounts out of those 12. Coming again now, on the ITC in spite of having seen the fairly reasonable numbers, in spite of the 2 percent quantity degrowth in the cigarette, I am happy at least that the quantity degrowth is being seen in the cigarette.

I am not keeping a positive stance, not from the social point of view or maybe the ethic point of view, but apart from the valuations also, does not justify and the kind of volatility which we see in the share price of ITC does not justify to have the stock in the portfolio as a portfolio stock.
First Published on Jul 28, 2017 03:33 pm