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Last Updated : Dec 19, 2016 06:35 PM IST | Source: CNBC-TV18

Tulsian's take on Glenmark, Laurus Labs & others

In an interview to CNBC-TV18 SP Tulsian of shares what is a a good level to enter the Glenmark pharma stock. He also shares his view on other stocks like Laurus Labs, which listed today, defence picks like Bharat Forge, and agro companies like Jayant Agro.

In an interview to CNBC-TV18 SP Tulsian of shares what is a a good level to enter the Glenmark pharma stock.

He also shares his view on other stocks like Laurus Labs, which listed today, defence picks like Bharat Forge, and agro companies like Jayant Agro.

Below is the verbatim transcript of SP Tulsian's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Latha: I don’t know how much of the Glenmark announcements you can read, this is more an announcement over the next decade, but they are saying that they will be filing as many as 9 new drug applications and biological licence applications in the next 10 years, they are targeting a 30 percent revenue growth from their innovation segments. Several billion dollars of in-licensing deals are in the pipeline, big plans here as well they are expecting to launch about 20 generics every year starting now. Are these announcements making you like the stocks your opinion?

A: I have been actually keeping the positive bias on Glenmark, but I won’t be too enthused these announcements, because they are all open-ended and you cannot crystallise the timeline and the quantum and the kind of regulatory hurdles, which we have been seeing in case of various pharma companies I do not know whether they can really adhere to this timelines or not, but yes 20 generics launch every year is seen quite convincing, but 10 years pipeline and the plans given on a 10 year horizon is not that reassuring.

Sonia: For somebody who has still perhaps not participated in Glenmark it already seen a significant rise up until now does it make sense to for a fresh buy here?

A: I won’t be making a fresh entry now, because if you see the stock having risen in this last maybe couple of weeks allow this stock to correct and we always see the frenzy once the stock moves up, you see the profit booking also coming in, so maybe at a level of around Rs 900-910 can make a good entry point for the investors.

Sonia: One of the stock of the day is the debutant Laurus Labs, we spoke with you when the stock just listed. Since then the stock has come off just a tad bit, it still up almost about 12 percent, but at Rs 480 you were telling us how expensive the stock is, would you recommend that retail investors book out of the stock?

A: That was the message given in the morning when it was ruling higher that I am seeing this stock quite expensive and I gave the example of the Sheela Foam also the kind of frenzy, because what is happening now if you see this last 2-3 issues they have not evoked very good response, in fact Sheela Foam had the retail category under subscribe to the extent of maybe 0.5 times. The same thing has been happening here you never know because when you are taking a fundamental view and reaching a conclusion that the stock is definitely ruling at a very expensive valuation definitely you are not convinced. It is difficult for you to predict, but that history suggests that after maybe couple of days or maybe after one week the stock having seen corrected further from here on, so it is better that those who have got the allotment they should exit and book the profit now at the current level.

Latha: Another order like to come through for defence would you play any of the stocks?

A: Maybe with that view I have only been keeping a positive view on Bharat Forge, I am not saying that they will be seen the direct beneficiary they are many stocks available in the defence space, but I will only be taking a call on Bharat Forge one can argue that maybe one can look for Mahindra & Mahindra and L&T kind of stocks, but I am not taking a call on those stocks on these theme alone.

Sonia: How do you approach stocks like SKS Microfinance now? Rs 600 currently, down about 6 percent now?

A: I don’t know how much this news is affecting Bharat Financial because if you see, the stock has been correcting for last three days and it has corrected by about Rs 75-80. I won’t say that the other NBFCs are not correcting; maybe Bharat Financials is showing larger correction on a relative basis with other NBFCs like Bajaj Finance, Shriram Transport or maybe the gold companies.

However, I think that maybe we are in the bottoming out process because just alone on Maharashtra if you see their share, it is in the single digit and I don’t think that you can really get affected so much. So, I think that it could only be because of the foreign institutional investors (FII) selling which we have been seeing in the stock for last three to four days which will get settled – the stock price will get settled once that gets over and it should happen maybe now at a level of around Rs 600.

Latha: Any thoughts on Jayant Agro? I wanted to ask you the management was with us, any thoughts, that stock still looking good?

A: Extremely positive and in fact I have given that recommendation in maybe our one or two special shows and we have been recommending this at around Rs 250 ahead of the Q1 numbers. We have seen already the robust Q2 numbers coming in from the company but I am expecting equally the better numbers because castor seeds, harvesting will be coming in the month of January-February. Again this year there is low production in Gujarat because of the people having shifted to the pulses.

So, I am keeping extremely positive view and mind it, this company has two joint ventures. One is the largest user of the castor oil and castor oil derivatives, they have one JV with them and they have JVs with two Japanese manufacturers. So, those two JVs are also giving them very good profit. So, keeping very positive stance on the stock and maybe with six months view, the stock can still rise by about 50 percent from here.

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First Published on Dec 19, 2016 04:47 pm
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