Positive on Wockhardt, Tata Coffee & BEL: Prakash Diwan

In an interview to CNBC-TV18, Prakash Diwan of prakashdiwan.in shared his reading and outlook on the market and also gave recommendations on various stocks.Speaking on Bharat Electrical Ltd (BEL), Diwan said, "If there is a little bit of a sell-off, you could probably buy into the stock and accumulate it".

He is positive on Wockhardt and Tata Coffee.Below is the verbatim transcript of Prakash Diwan's interview to Latha Venkatesh, Sonia Shenoy and Anuj Singhal on CNBC-TV18.Anuj: Wockhardt at 10 percent downtick, is it pricing in the worst possible news or can it seek lower levels?A: I don’t think so. This is just an initial reaction. Given the fact that this happened over the weekend. However, importantly what this particular US Food & Drug Administration (FDA) news does is, it virtually stops or dries out the pipeline that Wockhardt has in terms of the products to sell in the US and they have been lobbying so hard in the US, in fact it is one of the most active pharmaceutical companies that is lobbying in the US to have a reconciliatory kind of approach with the US FDA and they worked under presidential campaign, supported that in some way but this is going to come as a shocker for them. I am sure they were not expecting this.More importantly, the resolution of the earlier US FDA also will start having an impact on them because if they cannot get out of that, this is only going to even drag them further down. So I was quite surprised as the stocks were recovered from 12 percent debt to about 9 percent now. When people do the math and go back to their drawing board, they will probably have a lot of EPS dilution that will be calculated and my sense is Wockhardt still has some weight.Latha: Bunch of numbers came out over the weekend and in the last 72 hours, should we keep our eye out on anything, Ujaas Energy was clearly one of them?A: Yes, but I particularly don't like the business model -- till date whatever they have done has been too lumpy at times. It is so inconsistent so whether you can take a call from just the quarterly numbers -- there are some very interesting numbers that came through and I would say look at some of the larger players like Bharat Electrical Ltd (BEL) and all which have confused people.If you see today people cannot make out, there is some brokerage that has come up with an underperformance but increased the target and it is an opportunity for long-term investors who buy in because order book is so brilliant. The company will only start doing well in Q3 and Q4 because defence orders typically starts in Q1, start getting executed in Q2 and then the realisations happens except for that Pay Commission hike that some of these PSUs will have to bear the brunt of there is nothing stopping BEL from having some very super realisations. So my sense is it is a company that you will definitely want in your portfolio and you don’t get these kind of opportunities very often. So if there is a little bit of a sell-off, you could probably buy into that and accumulate it.Sonia: One stock I want to ask you is Tata Coffee because it hasn’t performed for two years, 2015, 2016, 2014 also it didn’t perform, now suddenly it has got a new set of wings, would you buy it at this price post its earnings?A: It has been looking promising for a while now and the kind of operational ground level announcements that they have been making, the kind of tie-ups that they are making -- suddenly Tata Coffee has seemingly developed marketing wings more than anything else. They are talking about marketing themselves so effectively in all the fronts that they are in -- I think this will augur very well for the stock going forward. It will get rerated positively. So yes, I would buy into it, we have already advised clients to have bought into it about three months back but we would continue endorsing that call to go long.Latha: IFCI -- what a disaster of a number, is it worth discussing at all or should we just avoid these stocks?A: These are businesses, which tend to get ignored for too long and one good day, you might see some sort of a turnaround -- there is some silver lining to this darkness also. If you see the couple of triggers, one is the change in the debt recovery act that we had, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act that we recently saw the Parliament pass, those will have some long-term impact on some of these companies, the underlying projects on some of them have started turning around. They have investments in ICRA and tourism finance corporation which would unlock value as we go along -- so there could be some silver lining to the dark clouds but you will have to be patient for this stock to do well.