In an interview to CNBC-TV18's Latha Venkatesh, Anuj Singhal & Sonia Shenoy, SP Tulsian of sptulsian.com shared his readings and outlook on specific stocks and sectors.Below is the verbatim transcript of SP Tulsian’s interview on CNBC-TV18.Anuj: Let us discuss some of the stocks that moved yesterday. I wanted your thoughts on auto sales and more importantly, on Ashok Leyland where the sales look good but the stock actually ended down.
A: Ahead of the sales numbers, we have seen a good recovery in the share price but if you take a call, 12,500 plus sales, Ashok Leyland is seen to be returning to its old level of sales of 12,000 plus and I do not think that now things will get slipped further because if you compare it with the commercial vehicle sales of 30,000 plus by Tata Motors vis-à-vis 12,500 plus for Ashok Leyland, Ashok Leyland has really performed very well. But yes, maybe because in anticipation we have seen the stock having moved by about closer to 8 percent and this is a Futures and Options (F&O) stocks, people do come and book profits. However, my near-term or maybe medium-term outlook remains positive on the stock maybe with a view of one to three months. The sales numbers are really quite good.
Latha: MOIL, the manganese ore company, do you think it has some legs to run?
A: It has a lot many legs to run. Actually if you see, just to give a data point, MOIL has increased the prices of manganese ore on the October 1st by 25 percent saying that these prices will prevail for the quarter from October to December. And now, I am seeing the news that MOIL has again increased the price - that means they have gone back on their period, the prices for which it has got announced, they change it on a monthly basis because the manganese ore prices have risen by over 200 percent in this last four-five months and similar is the situation for others like coking coal or maybe iron ore and all sort of things, in fact I have been taking this call on MOIL and NMDC when they have all been, when they completed their share buyback scheme on September 30, where the government has reduced their stake in the company.
So, share buyback, equity reduction, continuous increase in the product prices are extremely positive for MOIL and same is the case with NMDC also because NMDC has complete the share buyback programme of 8,000 crore where the government has reduced its stake to 75 percent. Similar is the case with MOIL, completed share buyback of Rs 850 crore, government reduced their stake to below 75 percent. And if you have the reduced equity and higher realisation, I will not be surprised to see the old glory of FY14 and FY15 where these companies used to report an earnings per share (EPS) of closer to Rs 20 plus will be seen again, not in the Q2 numbers definitely, because things have started improving from October 1, by the price increase effect which I have stated just now. So, I am very positive on both MOIL and NMDC.Sonia: Have you taken a look at the numbers for GNA Axles? The listing was very strong but the numbers do not seem very impressive, a revenue growth of just 4.5 percent this quarter, any thoughts on this?
A: You are right, the numbers are very flat and we need to compare the numbers of June to September quarter on a sequential basis. In the September quarter, obviously, the equity has increased due to which the earnings per share (EPS) fallen to about Rs 3.5 on the enlarged equity. Therefore, what you say is right that the performance or the results are not at all cheerful, in fact when they went public, at that time also, we have taken a call that the things are not looking very robust, maybe on the growth front, by the company for maybe next six-eight months. So, similar situation or similar pattern may continue for the next couple of quarters as well, but because auto ancillary stocks are the darling of the market, now people have been going for it, but otherwise, you are right that results are seen quite flat.
Latha: There were a bunch of smaller companies that announced numbers. Majesco, MIC Electronics, a whole host of them. We discussed GNA Axles, VST Industries and even over the last week. Is there anything among the midcaps that stood out for you that we have not discussed?
A: Actually, in the last three days, because of festive mood, we have not seen much of the results coming in but yes, we have discussed on GNA. Majesco numbers have come out really very good, excellent numbers but I am not impressed with the numbers of VST Industries and MIC Electronics maybe Shriram City Union Finance, the company has posted better numbers but apart from that I have not come across any good numbers. However, as I said, because of this festive mood, we have not seen any significant results having come in these last three or four days.
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