Here is why Tulsian bets on NBFC and bank stocks

In an interview with CNBC-TV18, SP Tulsian of sptulsian.com, keeps a positive stance on Yes Bank and Kotak Mahindra Bank. In the non-banking financial space he bets on Bharat Financial and Satin Credit.Below is the verbatim transcript of SP Tulsian's interview to Sonia Shenoy and Latha Venkatesh on CNBC-TV18. Latha: Delta Corp Limited had a fair share of losses obviously because it was expected to be a victim of the lessening of the cash economy. Lately it has started rising. Is that a stock that you care for at all, have you analysed it? A: Two things, firstly momentum which we have seen in the stock has made it move to that high. I think the previous high was Rs 180-185 and maybe this demonetisation or this cashless transactions has made the stock to correct to reasonable level of Rs 100 or so and from there it is again seen to move up. But, I will take a fair value of closer to maybe at around Rs 120 or so. So, if you have the share available within that range one can look to trade or look to buy at Rs 100 and book profit at Rs 120 and that seems to be the ideal range between Rs 100 to Rs 120.

Sonia: Two days now, volatility in the market. How does one approach it, will you wait for a real trend to emerge after January 2? A: If you see yesterday's rally of 400 points on the Sensex. In fact, the rally which we have seen in the morning was more of a surprise because always ahead of the expiry you see one day with such a big rally and that has expectedly come yesterday and I won't be taking any bearish view for the simple reason that today's move is seeing more of a consolidation. And, actually if you see the renewed buying and the short covering both has been happening yesterday as well as in the first half. So, maybe whatever profit booking which has happened in the intra-day has been seen in this last one hour. Even tomorrow I am expecting it to be a range bound day. Maybe one can expect a Nifty expiry to happen anywhere between 8,000 to 8,100 level. It will not be below 8,000 and it will not be above 8,100. So, I don't think one should really be drawing any conclusion that this is a setback for bulls or victory for bears or the market will keep behaving negative from here on or you don't see much upside because I am taking this on a very positive and healthy line that today we have seen the consolidation having taken place. Latha: Is there anything in the finance space that you like. We have discussed of course Bharat Financial at length in the morning. But within the banking space anything that you would go for small banks, the newly licensed banks? A: In fact, I like everything in the financial space for the simple reason that if you first take a call on the Non-Banking Financial Company (NBFCs) and the small finance bank, microfinance all of them seem to have bottomed out. In the morning also I have said Bharat Financial and Satin Credit because of the two issues of Uttar Pradesh and Maharashtra. Satin Credit Care has a presence in UP of 32 percent. So, I am keeping positive stance on that. Come on public sector undertaking (PSU) banks we have all been debating and discussing this. About a couple of months back we have said that the Reserve Bank of India (RBI) cannot declare the dividend and all that. But let us understand whatever currency which will get extinguished the ultimate beneficiary is the government and if you combine the balance sheet of RBI and government the ultimate benefit flows to the government and yes that will be a big positive scene for the PSU banks from here on because if you see going forward the recapitalisation amount if you expect an amount of Rs 40,000-50,000 crore to get earmarked in the Budget that will be seen quite positive. Come on the non-performing asset (NPA) provisioning norms maybe it is likely to get extended. So, keeping a positive view on PSU banks also and if you see all of them are seen to be ruling at a low level. Come on the private sector banks if you see the third instalment of advance tax numbers they have all been reasonable. I don't see any reason to get disappointment, so Q3 numbers which we will be seeing from the private sector banks - I am largely talking of the larger banks like maybe Yes Bank, Kotak Bank and all that. I don't think that they will disappoint and maybe exception can be made of ICICI Bank and Axis Bank because of the asset quality, but I am not keeping any negative stance on that -- so if you really ask me probably for one month view or maybe as an F&O trader for January series. I will be keeping positive view on all three that is NBFC, PSU banks and private sector banks.