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Last Updated : Jun 02, 2016 09:50 PM IST | Source: CNBC-TV18

SP Tulsian‘s views on Godrej Cons, Coal India & pvt, PSU banks

SP Tulsian of sptulsian.com, in an interview to CNBC-TV18, gave his views on various stocks.

SP Tulsian of sptulsian.com, in an interview to CNBC-TV18, gave his views on stocks like Coal India, Godrej Consumers, Crompton Greaves, Crompton Consumers along with private and public sector banks.

Below is the transcript of SP Tulsian’s interview with Sonia Shenoy and Anuj Singhal on CNBC-TV18

Sonia: The stock of the day in the midcap space undoubtedly is Crompton Greaves and Crompton Greaves Consumer as well. From this level, do you still see more upside on these stocks?

A: I may not be taking the positive call on the Crompton Greaves Consumer Electricals, because if you really see the debt having present in the looks of the company, when the company got restructured or hived off from the main company, they are carrying the debt of about Rs 500 crore because if you recall earlier, it never, on a consolidated basis when it was a part of the Crompton Greaves, at that time, that was the most profitable division or the segment of the company. But now, the performance of the company has slipped in H2 and we are seeing a lot of competition coming in in that space. So, maybe one has to watch for the performance for next couple of quarters as well.

But yes, coming on Crompton Greaves, in fact since the day it has been hived off and it has got ruled and got traded at about Rs 45, since then I have been taking a positive view because I am keeping a very positive bias on the transmission and distribution (T&D) space and Crompton Greaves has a very good presence in T&D space in India and abroad also. These Q4 numbers, they have made a provision of Rs 1,300 crore as the losses and all that and keep monetising the assets what they have been holding overseas mainly in Europe. So, both these things are quite positive. So, yes keeping positive stance on Crompton Greaves but neutral on Crompton Greaves Electricals.

Anuj: The other stock of the day right now is Coal India at the index level. How would you approach it now at current levels?

A: I am not in fact, I am seeing the production and the dispatches figure, if you see on production the company has slipped its target by about 5 percentage. They have achieved 95 percent target for the production, but the lifting has all been very poor and that lifting is only to the extent of about 90-91 percent of the target. For the last couple of months, I am referring in this new year. That means, may be the 590 million tonne projections given by the company for FY17, I have my doubts whether that can get maintained or that can get achieved by the company or not.

And I think that probably the company will have problem in achieving that kind of target of 590 million tonne production because if you see the coal blocks which have got auctioned are all have seen gradually going into the production and that is keeping the pressure on the demand or maybe the lifting of the coal and maybe we are approaching now monsoon, after one month, we will be seeing monsoon and during that time, as such the production and lifting of the coal diminishes, or gets reduced. So, yes overall, for next three months scenario considering the last couple of months production and dispatch figure I will not be taking a positive view on the stock.

Anuj: Any thoughts on any of these stocks that I mentioned – Lovable Lingerie, Venus Remedies, Ujjivan of course, you are bullish on, Gokaldas, you believe is time right for some profit booking, but anything else that I have spoken about that you like right now?

A: Actually Ujjivan Financial Services and Gokaldas Exports, as you have rightly stated, I am in fact advising the profit booking. I will not be surprised to see the stocks again correcting, because in Ujjivan we are seeing more kind of frenzy. In Gokaldas Exports, considering their one quarter numbers and the tax credit which we have seen in Q4, probably the stock has ran ahead of its fundamentals. And I will be taking a call on two other, that is pharmaceutical stocks and Lovable Lingerie. I will not be taking a call on both because both seem to be high beta stocks. We may see the profit booking again seen coming in and correcting back. I will not be taking call on those other two stocks.

Sonia: From the list of these private sector banks, YES Bank, IndusInd Bank and a couple of others, where would you put incremental money now, if at all?

A: When the whole banking stocks were ruling at its bottom including private sector bank, I have identified two, Kotak Mahindra Bank and YES Bank. And I continue to have my positive bias on both the stocks. But now, the time has come to look maybe to the PSU Bank from a trading point of view which I have started with the start of the series that all PSU Banks having presence in futures and option (F&O) can give you a return of about 8-10 percent and I am holding the same view. So, one can take a long position in Bank of Baroda, Punjab National Bank and I am holding the same view. So one can take a long position in Bank of Baroda, PNB, SBI, Canara Bank, Oriental Bank, Union Bank. But if you need to take a call as an investor, because my call on PSU bank is only confined to one series, that for the month of June where one can expect a gain of about 8-10 percent. But if you want to take a call on the private sector bank and maybe from investor’s point of view, it is necessary to look into the smaller banks like Karnataka Bank, Federal Bank or maybe Lakshmi Vilas Bank because these banks are looking very good from a valuation point of view, from asset quality point of view and the way these banks have posted their Q4 numbers.

Sonia: I wanted your view on some of these stocks that are in an uninterrupted bull market. Bajaj Finance, SKS Microfinance has hit a new as well today. For a long-term investor who is holding on to these stocks, do you recommend some profit taking or do you think that one should not worry at all?

A: In fact, if we are an active investor, where we can in fact enter and exit, I do not think that there is any harm in booking profits in both the stocks, Bajaj Finance and SKS Microfinance because you see the range of about Rs 400-500 seen available in a stock like Bajaj Finance or maybe a range of about Rs 40-50 in case of SKS Microfinance. I agree that the monsoon, the kind of penetration that they have amongst their clients, virtual reputation and the loyalty which they are enjoying with their clients and the good monsoon will definitely see the business growing from here on further, but still I will advice that probably the profit booking is not a bad idea to go into.

Anuj: A word on Godrej Consumer as well?

A: Again Godrej Consumer if you take a call, this is an excellent stock from a rural point of view, or maybe if you want to take an odd call in some of the FMCG kind of stocks, I do not think that you have much competition seen because when you take a call on FMCG, people are generally talking of a Dabur, Marico kind of things. But 2-3 stocks which are really looking very good in the FMCG space, probably falls like maybe Godrej Consumer or GSK Consumer which is the market makers of the Horlicks and all that. So, these are odd counters and looks very good in the FMCG space.

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First Published on Jun 2, 2016 09:50 pm
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