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Last Updated : Feb 27, 2018 10:31 AM IST | Source: CNBC-TV18

Top trading ideas by SP Tulsian

In an interview to CNBC-TV18 SP Tulsian, shared his reading and outlook on the market and also gave recommendations on various stocks.

In an interview to CNBC-TV18 SP Tulsian, shared his reading and outlook on the market and also gave recommendations on various stocks.

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

Anuj: Fresh talk about this DLF deal happening sooner, what are your thoughts on this stock now?

A: When the board has given an extension of one year about a couple of weeks back, that was seen as a negative that this deal should happen as fast as it can because this is being talked for the last couple of years and this will be a big trigger for the DLF to see the debt getting reduced in the books of the company, which is now standing at closer to about Rs 22,000-23,000 crore because the DLF management has not been able to keep the targets of the debt reduction given by them on frequent occasions in these last couple of years. So if this deal happens, this will be seen as a positive move for the stock.

Anuj: Fresh thoughts on Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) at current price?

A: Yesterday I have said that both the stocks are looking good because the kind of correction in HPCL -- apart from this ex-dividend factor, the stock has corrected by 7 percent. If you see in this last couple of days on the fear of the possible merger of the company with Oil and Natural Gas Corporation (ONGC), I don't think that this kind of correction is warranted.

If you see these stocks particularly HPCL and BPCL, they have been trading in a range and swiftly bounced back again to the old levels. So I am keeping a positive bias on the HPCL and BPCL both but I will give a buy call on HPCL at the current level.

Latha: I wanted to ask you about Metalyst Forgings, Castex Technologies and Amtek Auto. The rate at which the shares are being given to the promoters is about 30-40 percent higher than the current ruling price. How would you look at this group of three stocks?

A: I think this whole process must be happening at the behest of the creditors because they are the lenders, they want this process to get expedited. If you see the balance sheet of the company, for September 30, 2016, promoters have an amount of Rs 371 crore as the unsecured loan, which is now getting converted on a consolidated basis I am referring to. So this Rs 100, Rs 50 and Rs 15 -- I don't think there is much significant because the price must have been worked out based on some formula or maybe at the behest of the lenders but what I want to see is a serious move on part of the monetisation and some of the local assets. The assets which are held in India by the promoter as well as by the company in form of the real estate where they have been giving a target of about 1 billion getting garnered from all these asset monetisation and if that happens then that will definitely be seeing a serious move.

Apart from that, they are talking that the management has not been cleared, they have been talking of the inducting some strategic investors also in which company, whether it happens in the holding Amtek or it happens in other companies like Metalyst Forgings or may be Castex Technologies but this time this seems that the baby steps have been taken by the company and I will not be too excited or too enthused on the high price which we are seeing now getting converted.

As I said that Rs 372 crore is the amount which is getting converted of the promoters lying in the books of the company as unsecured loan.

Latha: Any thoughts on Idea Cellular or Grasim that entire group of stocks? We know now that the postal ballot will be between first week of March and first week of April, any thoughts on Grasim, AB Nuvo and Idea?

A: On Idea, I have been keeping my negative stance for the simple reason that the telecom space has not seen lucrative and the kind of talks, which is going on and the run up which we have seen in the share price of Idea is unwarranted in my view of the share price of Rs 110.

Coming on the merger of AB Nuvo with Grasim, I do not think that there should be any kind of problems seen because maybe the majority voting or minority shareholders will go for it because the institutions are all seen in favour of this move. Though when this merger was proposed, I have taken a stand that it has seen detrimental to the interest of the shareholders of Grasim because in the older days, they used to have 1.75 shares of Ultratech for every one share when Grasim was ruling at Rs 10 and now it has got reduced to 1.25 but one may have the argument that because of the financials and so many other businesses coming in to the fold --- I don't see any reason for the Aditya Birla Nuvo merger not getting through with Grasim. That seems to be just a formality.

So that will get over but the picture or the situation, which is now being apprehended by the market is more on the fund infusion by this enlarged or the merged Grasim entity whether they will be taking a call on making any kind of investments in the Idea-Vodafone merger going ahead and if that happens then that will be seen very negative because the combined entity or the merged Grasim entity will be holding above 30 percent stake in the idea, the major portion of the promoters’ shareholding and if they have to infuse further fund, that will definitely be seen a negative for the Grasim merged entity.

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First Published on Mar 1, 2017 09:14 am
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