Remain neutral on Welspun Corp, like Deep Industries: Tulsian

A: I have not seen the numbers, but I have always liked the stock mainly as portfolio stock that you need to keep it in for long-term. I don’t think that even if you keep it for five years also you will get hesitated on holding it. However, I have not seen the numbers so difficult for me to comment in that.

Latha: I wanted to ask you about the oil related rally and cuts that we are seeing. A lot of those midcap stocks like Seamec, GOL Offshore or even Aban Offshore have all been rising in the wake of the Organization of the Petroleum Exporting Countries (OPEC) announcement. Should we let this pass or hope on to any of them?

A: If you see the same price behaviour which we have seen in all the support stocks, which has happened in this last 3-4 months with the spike in the crude prices seen having taken place and the rally in the crude prices fizzling out maybe for any reason either of the non implementation of the cartel arrangements on the production cut and all sort of things, I am not taking any positive call, but yes yesterday also I have said after this OPEC meet that Dolphin Offshore, because you have to look to the fundamentals also there is no point in taking a view on the support stocks or oil exploration and drilling and exploration kind of support stocks, taking a call on them unless until you see the financial positions of all these things.

You have mentioned of Great Offshore and Aban Offshore both, if you see the debt a huge debt piling up in the books of the company I don’t find any reason any attraction in those stocks, so maybe purely from the support facility provided, I find two stocks one is Dolphin and second is Deep Industries, because if you see the Deep Industries they are providing the gas compression services which has nothing to do with the crude price hike, so that looks good but otherwise directly related with the crude price hike I would go with the Dolphin Offshore.

Latha: Do you have a view on HCC and separately I wanted your view on Welspun Corp as well if you have one?

A: On HCC I won’t be taking a positive call, because the company has announced that they will be receiving about Rs 2,000 crore plus because of the awards having in their favour, but one should not forget that that is just a liquidity relief coming into the company on which there maybe interest saving. The kind of debt that they have and the kind of development stuck at the Lavasa, the things are not moving for last maybe couple of years — that maybe seen as a temporary relief. This is seen more as exuberance by the market and I won’t be taking an investment call on the stock.

Coming on Welspun Corp again I am unable to find out the reason for this upsurge, because if you see the steel pipe business which has been because of the increase in the steel prices how much they can really pass on — again my view remain neutral on that stock as well.

Latha: There were couple of other smaller stocks that I wanted your opinion on whether viewers should take a good look at it or just let it pass. Ujaas Energy has done very well over the past several months, so has TVS Electronics is any of these stocks to be taken seriously?

A: I won’t be giving a buy call on both, because if you really see I don’t think that the workings are really seen sustainable. The momentum is seen more in both the stocks and the fundamentals are not convincing for an investor to take a call on both these.

Sonia: I wanted to ask you about the crude impact on some pockets like aviation and oil marketing companies both those group of stocks were under pressure today, but how would you deal with it and would you buy any stocks on a dip?

A: I won’t be negative on the oil marketing companies, because if you really see the crude now it is a pass through whatever and they have been smartly doing that every fortnight and on the contrary the inventory gain, the inventory which will be held by them of about a week or so, which is always held by them will be giving them the inventory gain also in this Q3, but yes there are two or three sectors on which the negative bias is kept by me. One is aviation and second is the paint sector and third is a telecom, because people have not talked of the telecom, but the kind of diesel consumption which we see in the towers and all that that is again taking a huge cost of the telecom companies and as such there is double whammy for the telecom companies already Jio and the increase capex and all that — so these three sectors are looking negative from the crude increase point of view, but I am not keeping the negative bias on the contrary maybe OMCs having corrected are looking a good buy now at the current level.