In an interview to CNBC-TV18's Anuj Singhal, SP Tulsian of sptulsian.com, he spoke about his readings and outlook on the fundamentals of the market and specific stocks.
Below is the verbatim transcript of the interview.
Anuj: First your thoughts on the stock that you like, Motherson Sumi Systems. These numbers, what is the call now on the stock?
A: Numbers are decent and in fact, if you see the management commentary and the order, across all the geographies, I am satisfied with the numbers. Looking to the situation going forward, I am keeping positive view because as such, we have been keeping positive bias on the auto ancillary stocks and Motherson Sumi is definitely in our top 4-5 stocks which we have been keeping a positive bias. But from here on, maybe on a relative basis, if you want to take a call, probably Motherson Sumi, after having move past Rs 400 plus will be a consistent kind of performer where relative returns may not be higher as compared to other auto ancillaries, but we continue to like the stock very much.
Anuj: State Bank of India (SBI), I remember you have been very positive on the sector and SBI in particular. Numbers look good. Your sense of how the stock would move from here?
A: Numbers are quite good and better than expectations. In fact, I find the numbers quite interesting and if these kind of numbers having posted by the largest bank and just add the non-performing assets (NPA) resolutions which will start happening very soon. Yesterday, we have seen the inkling of Jaypee Group loans getting recast and all that and once the other steel sectors and all that, the Finance Minister has been saying that 30-40 accounts needs to be tapped.
And in fact, in all those accounts, you have the presence of SBI and more specially after the merger of the associate banks, five associate banks having got merged and having the enlarged balance sheet of SBI from April 1, 2017. So, I am keeping my positive stance largely because of the good numbers having posted. No complaint on any of the heads. If you take on the slippages, on the asset quality or maybe on the operating profit or maybe other kind of provisionings and all that.
So, keeping positive view, but along with that, for the last 3-4 days, I have been in fact, keeping a positive bias on the larger 4-5 PSU banks also because maybe the smaller one or those who are into the midsized space like Allahabad Bank, Andhra Bank, Indian Overseas Bank (IOB), they may have disappointed, but I am not having any kind of disappointment. So, obviously now the pecking order goes to SBI as the top with four other top bankers because you have practically seen the results of all the banks also except Canara Bank and Bank of India amongst the larger ones. So, maybe taking overall positive view, but definitely SBI stands out amongst all these banks.
Anuj: What is going on with Ujjivan Financial Services because at Rs 450-500 people were just in a mad rush to buy the stock. Ever since it has come in Futures and Options (F&O), it has just been a one-way journey and now out of ban and even then, today also down 6 percent. Rs 320 now on the stock.
A: You are right. That is right. In fact maybe probably if you see the institutional investors are seen divesting the stock for the last couple of months and probably people thought that this F&O inclusion which has happened from this May series probably would see the renewed buying coming back, but that is not happening in case of Ujjivan. And on and off, in F&O ban, so there is a little mystery because purely on the microfinance business, there has been some kind of apprehension in case of Bharat Financial Inclusion or maybe in case of Ujjivan, but I do not think that these kind of corrections were really warranted.
Q4 numbers were a really dampener because the management commentary was very confident when they have said in Q3 that this high provision is one-time and majority of that will get covered in Q4, but that is not happened having taken place in Q4. So, probably that disappointment may be there, but it cannot linger around for such a long time. So yes, it is very difficult to diagnose that why the continuous fall is happening in the share price.
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