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No hopes on Chidu; banking, auto are best bets: TulsianStock-analyst SP Tulsian of sptulsian.com explains to CNBC-TV18 that he is not hopeful that finance minister P Chidambaram will implement any initiative that will have a positive impact on the market and the economy. . Share . Email . Print . A+A-I don't think the rally has been caused by a rise in the GRM of Reliance IndustriesStock-analyst SP Tulsian of sptulsian.com explains to CNBC-TV18 that he is not hopeful that finance minister P Chidambaram will implement any initiative that will have a positive impact on the market and the economy. Tulsian is also bullish on banking and automobile sectors and adds that a trading view could be taken with a time horizon of 15 to 20 days.
Below is a transcript of the analysis on CNBC-TV18.
Q: What is your view on Reliance Industries after today's sudden spike?
A: I disagree with Udayan attributing the surge to improvement in the refining margins. There no changes in the petrochemicals business which was adversely hit in Q1. There has been a slight improvement in the Singapore benchmark, but I don't attribute that as the sole cause for the stock to move up.
I estimate the rally to be caused by the reduction in number of floating stocks as the company continues its process of buying back shares along with the fall in selling pressure. Another cause could be the news of the rapprochement between the brothers and the takeover of RComm .
So this surge has to do with expectations of corporate development which are likely to happen either within the group or outside it. I don't think the rally has been caused by a rise in the GRM (gross refining margins) of Reliance Industries.
Q: Would you recommend Wockhardt on the astronomical rise in the stock?
A: Considering the results, definitely the stock looks quite exciting. An extrapolation of the EPS of Rs 35 posted for the quarter will obviously result in a positive call.
But the kind of run-up seen in the stock and having recommended the stock at Rs 300 in February, I sometimes get a little cautious. The three-digit level could really be good for entry as whenever there is profit booking, the stock corrects to Rs 50- 70.
The company's performance is at its peak considering the results posted in the first quarter. So, I don't think that growth in the overseas operations can really be expected in the second quarter.
I will hold my call on a fresh entry-level into the share. Investors holding the stock can continue to hold on, but for those planning to make a fresh entry, a price in three-digits will make a good entry-level.
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