Here are top trading picks from SP Tulsian

Anuj: Your thoughts on tyre stocks. I know you like Balkrishna Industries among the F&O ones, but Apollo Tyres is up 6 percent, Ceat up 5.5 percent, even MRF up 3.5 percent.

A: Difficult to take a call on these F&O stocks because you may get caught on the wrong end on the volatility front, but apart from Balkrishna Industries, though I am keeping because the Apollo Tyre numbers have been relatively better for Q4, so apart from Apollo Tyres and in fact the JK Tyre and Industries has made an announcement that they have turned around on the acquisition of the Kesoram tyre plant, so that also looks a little reasonable.

But maybe one can give a thought to the TVS Srichakra also because if you see, because of the big subdued Q4 numbers with an earnings per share (EPS) of closer to about Rs 40 and company having posted an EPS of Rs 200 because FY17 was a bit soft for the company, so I will not be surprised to see the company posting an EPS of maybe about Rs 250 which translates to a growth of about 25 percent and the price is now ruling somewhere around Rs 4,050-4,070 where one can give a look mainly from and investment point of view. But traders I will be a little cautious in initiating long positions except in maybe Apollo Tyres in the F&O space.

Anuj: Remarkable month for Voltas now, up 25 percent this month and this is not a small company that we are taking about approaching Rs 17,000 crore market cap. Are you tempted to book profit here or would you let them run?

A: If you take one week behaviour, it has risen by 20-22 percent because a couple of days ahead of the results what I remember, results came in last week and couple of days ahead of that, the share corrected from Rs 430-435 to a level of Rs 410 and actually it was expect that results were seen to be quite good.

But yes, we are right, in fact we have been advising, we gave a buy call on the stock from a level of sub-Rs 400 on the theme of the higher air condition sale and better numbers to be seen and the same thing, same trend will continue for the June quarter also, but I think the pricing has to get booked somewhere and in fact, because of the high beta nature, you see these kind of, honestly, if you really ask me I do not see any reason for the stock to move up today by 6-7 percent, so you see this kind of upmoves coming in, the kind of high beta nature.

So we definitely advise the investors to go for profit booking at the level of Rs 500 because what happens if the investors keep looking to the levels of Rs 510-520, they will never be able to sell and after the June numbers, once the June month gets over, no point in waiting for the Q1 numbers. Even then, thereafter, the stock will start seeing some kind of profit booking so one should use this opportunity by the investors to book profit and exit from the stock.

Anuj: What explains this 4 percent fall in Indian Oil Corporation (IOC) because it is a stock which has seen a decent rally up until now, but down 4 percent today?

A: Difficult to give any reason because if you take a call on Hindustan Petroleum Corporation (HPCL) one may say that the company is likely to see a change of promoter, Oil and Natural Gas Corporation (ONGC) is coming in. But even if I just try to analyse HPCL, I do not see any reason there also because if the government of India is getting replaced with ONGC as a promoter, what are the metrics which will get changed for HPCL.

Similar is the case with IOC except for because if you see on a relative basis in this IOC in this last couple of weeks has risen much more than the other two oil marketing companies (OMC) that is HPCL, Bharat Petroleum Corporation (BPCL) and maybe profit booking could only be the reason because there is no renewed interest now seen in the oil marketing companies because of this change of guard or change of promoters or company going into the fold of ONGC kind of things or maybe the consolidation seen happening.

So that could only be the reason which I see otherwise no any fundamental or logical reason.

Surabhi: Do you track Adani Transmission by any chance? If you have a thought on the company, 60 percent up in one month and this is when Q4 numbers, if I remember correctly, earnings before interest, taxes, depreciation and amortisation (EBITDA) was down, margins were also slightly compressed. Any thoughts?

A: Yes I do track it, but results were not that bad and in fact if you see the transmission and distribution (T&D) space amongst the private sector, after Power Grid you have the credible kind of growth which is shown in the T&D space is Adani Transmission and probably market is looking more on the because T&D is such a space where the capital expenditure of Rs 3 lakh crore is being envisaged in the next 2-3 years largely by the Power Grid and amongst the related industry and that is the reason we have been keeping bullish view on the T&D space including transformers.

So yes, Adani Transmission is the only space available amongst the private sector if you want to play on this sector where there is a lot of potential. So, probably market is playing on the future prospects of the company because of the good expansion there, they are showing in this sector.

Anuj: The other interesting stock has been Max Financial Services. If this deal is not happening, in that case, why should the stock go up and the numbers were not good either for Max Financial, but even after that we saw the rally in the stock.

A: You are right, in fact numbers were quite bad and I do not understand, in fact I have never liked the stock on a valuation basis maybe beyond a point. And yes, these things are now seen that probably if the deal does not go through then HDFC Life may go for the IPO and then thereafter, they may look to go for Max Financial, but we have seen the kind of institutional holdings because there are some of the stocks which never goes down even if there is a bit of the negative news and Max Financial probably falls in that space, but I have never been comfortable with the kind of valuations and with this recent speculative moves seen that probably the merger will not happen, will be seen negative.

Surabhi: One more stock for you, Vijaya Bank. We are now looking at a double digit gain on it.

A: Actually Vijaya bank if you see the results were really very good and two things I wish to draw the attention here. One is book value of closer to Rs 74-75 and they posted an EPS of if I am not mistaken at Rs 7-7.50 and I think the government holding is quite high at 75 percent plus with the improved asset quality being seen.

And in fact, what I have been noticing since yesterday that in fact I am seeing the good accumulation seen happening in the PSU bank, if I just give the three or four names, it could be Punjab National Bank (PNB), Oriental Bank, Vijaya Bank or maybe Canara Bank, these are four or five banks and in fact I am expecting that probably good upside may be seen in these PSU banks in the next couple of weeks or maybe in this series itself because we have seen these all PSU banks having correction by about 15-18 percent in this last maybe couple of weeks.

They seen having risen in the May series in the first couple of weeks and thereafter have seen massive correction maybe in the pretext of the results not good and all that, but now that the same kind of pattern I am seeing in all these PSU banks seen in accumulation and that is the reason I am keeping the positive stance. But coming specifically on Vijaya Bank, fundamentals are looking reasonable for the bank considering their Q4 numbers and overall financial position.

Anuj: Your yesterday's blank cheque question I still remember when you were asked in the morning yesterday. It was Sharda Motor Industries, Rs 500 higher on that stock in two days, almost 30 percent gains. What next for this stock and the obvious question is even if someone gives you the second blank cheque, what would that stock be?

A: Coming first on Sharda Motors, we need to understand that they are into exhaust system and they have 55 percent market share. 45 percent share is in the sheet metal component and the other accessories and if you keep the BS-IV in mind, they will be seen the largest beneficiaries. They will be seen the largest beneficiary and actually if you take a call going forward, Rs 95 EPS they have shown for FY17 while the Q4 EPS was closer to Rs 32-33, obviously if a stock has risen by about Rs 500 from maybe Rs 1,700-1,800 to Rs 2,300 now, one has to give a pause, but I will not be surprised to see the share crossing Rs 3,000 also in the next six months.

And since I am keeping the positive stance on the auto ancillary and since you have asked me a stock, probably I will pick and choose the Banco Products (India) because the company, if you see, Q4 seasonally is always the dull quarter. They are into auto ancillaries, they are a very cash rich company, they have gone for share buy back, they have given a dividend of Rs 5, but still if you see, actually I compare sometimes these Banco Products with Subros when we gave a buy call on Subros at about Rs 90-95 and there was fire last year and now, Subros if you see the financial performance, no one will be convinced to buy Subros at Rs 250 looking to the EPS of Rs 3-4.

So, similar is the pattern with Banco also, but we are quite bullish and I will not be surprised to see Banco, I will not call it as a blank cheque buy, but I will not be surprised to see the share moving up by maybe about 10-15 percent in the next couple of months also.