In an interview to CNBC-TV18's Anuj Singhal and Surabhi Upadhyay, SP Tulsian shared his views and outlook on the fundamentals of the market ans specific stocks.
Below is the verbatim transcript of the interview.
Surabhi: IDFC and IDFC Bank, if someone were to try and play the prospects of this reverse merger, how does one go about it, which is the better stock to hold?
A: If you are playing on the theme of reverse merger then obviously IDFC Bank and actually if you see, which I have been holding my view that there is no reason for existence of IDFC from here on. In fact the entire value or whatever the prospects are lying in the IDFC Bank only. So this has been expected by the street for quite some time, in fact maybe 4-5 months back also, we have these kind of news floating in that IDFC is going to get merged with IDFC Bank.
And if it happens that that is the logical way or I would say that the merger is seen imminent and in fact I see good value in the IDFC Bank coming in because if you see the financial performance, maybe for Q4, asset quality, price to book, all the fronts, IDFC Bank is looking quite a good stock. And in fact, it has been for the last whole series, in fact when it corrected by about a couple of rupees on the expiry day, it has been practically for the June series, it has ruled between Rs 55 and Rs 57.
But just to give a weak closing by the strong hands because the share was seen in accumulation for whole of series and closing came in at Rs 55-56, that was a clear indication that stock is due for a big upmove after this accumulation gets over which has seen having taken place today. So we keep having a positive view on the stock and maybe this merger, if it comes in, it is not a surprise, this is seen imminent and this is bound to come at some point of time.
Anuj: Lupin of course has made a big move today. Is that a stock that you would bet on now at Rs 1,090?
A: No, I will not be taking a call on Lupin because if you see, as such we have been keeping a neutral stance on the big pharmaceutical stocks and only three stocks which we have been advising for buy, they are Aurobindo Pharma, Glenmark and Divis Laboratories. I will not be taking a call on Lupin thought it may recover from here because after having corrected so much, practically if you take a one year view, then it has almost corrected by 45-50 percent. So maybe from that angle, from a short-term point of view, for a trading bump, one can, but otherwise on a fundamental basis, still we are advising to remain away.
Anuj: I wanted your thoughts on the way Equitas Holdings has bounced back today about 5.5 percent, but a stock that you have liked in the past, PTC India, that is also up about 4.5 percent. Any incremental thoughts here?
A: Having highly positive on PTC India and actually you have mentioned first on Equitas, let me refer here, in fact Equitas and Ujjivan Financial Services, both are seen to be doing quite well today. I have been keeping more positive stance on Ujjivan in terms of the relative growth to be seen in the share price going forward.
But coming on PTC India, the way the situation are improving on power consumption front because of the huge capex having created in the transmission and distribution space, PTC India is seen to be a big beneficiary and PTC India is a holding company of PTC India Financial Services also. And if you take the business model of both the companies, the consolidated earnings per share (EPS) of closer to about Rs 13-14 for PTC India and available below book value kind of things, we are having extremely positive view on PTC India going forward because if you are buying it, probably you are playing on the power story because this is the only power exchange in the country having huge presence.
So yes, keeping a positive view on PTC India going forward but amongst Equitas, since you have mentioned, we have more tilted towards Ujjivan from a better share growth perspective amongst both the microfinance institutions (MFI).
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