The latest analysis and commentary by stock market guru SP Tulsian of sptulsian.com on what is moving the markets today.
“On Biocon, it has gone ex-bonus and I agree that on ex-bonus basis also it is down by couple of percentage points but generally we see that happening. Many of the queries which I have received on why it fell 50 percent, people sometimes they don’t know. Some of the people, those who go for tax planning by buying bonus shares, they do sell immediately on ex-bonus basis to claim the losses and all sorts of things. Coming on the debt ridden like you said about ADAG and Jain Irrigation, I don’t think there is any point in talking about those things. PC Jeweller kind of stocks are also included in that", said Tulsian.
On Indiabulls Housing Finance, he said: “Specifically on Indiabulls Housing Finance, the public interest litigation has been admitted by the Supreme Court scheduled hearing in the month of July then probably that has given a little nervousness and those who play on the short term theme, they have gone short. Again, I don’t think that should be taken as a worry for other NBFC (non-bank financial company) stock.”
On United Spirits, Tulsian said: “I don’t think the prices of United Spirits are seen sustainable firstly because of the Q4 numbers, which seem to be quite flattish or may be bit disappointing. Secondly, the Andhra Pradesh chief minister (YS Jaganmohan Reddy) saying about the prohibition to be taken up and if you see the prohibition being taken up by the four southern states where the distributor of the liquor is the state government then that is seen to be a serious issue.
"Going forward if you really see the situation for the breweries, molasses prices having risen, I am referring to last year when the molasses prices which is a key raw material for making the extra neutral alcohol it was ruling at around Rs 200-400 per tonne while now this season it is Rs 4,000-4,500 per tonne. Definitely that will be putting a pressure on the raw material cost also on the company going forward. If you take the sector call I don’t think that any of the brewery stocks are seem to be going up whether you talk of Radico Khaitan, GM Breweries kind of stock except for United Spirits which maybe in line with the consumption theme as we have seen buying in the FMCG stocks and FMCG sector for the last one month when the sector seems to having been bottomed out.
"I don’t think that I will avoid taking a positive call on United Spirits as a buying opportunity mainly because of the reasons I have stated.”
On the steel segment, he said: “If you want to play on this anti import dumping duty or whatever they call it, minimum import price kind of restrictions coming in then that will be seen as more positive for companies like maybe JSW Steel, Jindal Steel and Power (JSPL) and Steel Authority of India (SAIL) and fourth in the pecking order could be Tata Steel.
"Tata Steel also will be quick beneficiary of this but the burden or the negatives of the global operations, especially of Europe will be weighing more on the share price going forward which will neutralise the domestic effect. So if you want to play on this theme go for other ferrous stocks, the three stocks which I have mentioned rather than Tata Steel.”
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