Tag: SP Tulsian

Retail next growth area for RIL; raising target price to Rs 1,900 by Mar, says SP Tulsian

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Investment expert SP Tulsian of sptulsian.com sees the retail business as being the next key area of growth for Reliance Industries. He expects also sees the Reliance Industries stock being re-rated.

“The focus will now be on the Reliance Retail whether the valuation will be in the range of Rs 4 lakh crore to Rs 5 lakh crore, I don’t know but the broader range can be taken between Rs 4 lakh crore and Rs 5 lakh crore,” he said in an interview to CNBC-TV18.com.

Edited excerpts from the interview:

Q: They are saying that they are done for now, for Reliance Jio and they are saying that next five years they will look for strategic players in both Jio and Reliance Retail and talking about listing for both in next five years, do you think the market’s focus now shifts to retail from Jio for now?

A: Now, the press release which has been released by the company, we have to pierce it and we have to scan it very thoroughly because this gives a lot of details. First coming on the making debt-free, the company has raised about Rs 1,75,000 crore including the paid amount on the rights issue, that one goal has been achieved.

Number two – I don’t think that Jio Platforms will be going for further dilutions by anymore maybe 25 percent to be precise–24.7 percent seems to be cap and now probably no stake sale or no stake reduction by RIL will be seen in that. I think the next growth area or the next growth driver will be on the Reliance Retail.

Reliance Retail if you take a call comparable play is D-Mart having a marketcap of Rs 1,50,000 crore with a topline of Rs 25,000 crore. If you take a Reliance Retail they have a topline of closer to about Rs 2 lakh crore, maybe Rs 30,000 crore for D-Mart so 7 times in the size on the top line. I think margin is a function of the financial structuring of a company. So Reliance Retail will be able to – though they have been having the lower margin as compared to D-Mart but that can catch up once the rate reduction happens.

So yes, the focus will now be on the Reliance Retail whether the valuation will be in the range of Rs 4 lakh crore to Rs 5 lakh crore, I don’t know but the broader range can be taken between Rs 4 lakh crore and Rs 5 lakh crore. Probably the process of the induction of financial investors in Reliance Retail,  will start the way we have seen in Jio Platforms.

Coming on the fourth point which says that if financial investors – I am sometimes wondering why Facebook should be a financial investor but since they are calling it financial investor, we have to respect that. So maybe the induction of the strategic investor will be a key trigger for both the verticals that is Jio Platforms as well as Retail. But I don’t know, as I said in Retail probably we may see the financial investors coming in first maybe to the extent of 10 percent to 25 percent then thereafter strategic investor.

Only little delay or little disappointment could be that listing of both have been hinted in the next five years. But yes, Jio Platforms may not see the Indian listing, Jio Platforms may see the overseas listing maybe in the next couple of years to derive or to give the maximum value to the RIL shareholder because if you are listing the Jio Platforms in the Indian bourses then that discounting of the holding company, which is again a misnomer in case of such companies that will start and the RIL may not capture the true value but if the Jio Platforms gets listed overseas then the holding company can capture full value.

So I think this is the blueprint of the press release is giving the blueprint of the company at least for next 2-5 years or maybe at least for next couple of years and this is going to be a big rerating for the stock of RIL.

Q: The debt-free status was achieved way before their indicated deadline, so even these five years maybe an outer limit, you would expect it earlier you think?

A: That is what I said that I am expecting Jio Platforms overseas listing to happen in next couple of years or maybe even in fact I am hopeful of happening that in 12 months and even coming on the debt-free status one may argue that the back-ended amount of the rights issue of closer to about Rs 40,000 crore will come in the month of May 2021 and November 2021 but even if you take the Rs 1,16,000 crore as the Jio Platforms money, Rs 7,000 crore BP money, Rs 13,500 crore the rights issue money having coming and Rs 30,000 crore cashflow of FY21, so that makes about Rs 1,70,000 crore.

So even if you delay or defer the receipt of Rs 40,000 crore rights issue of amount which you may not include in this then also Rs 30,000 crore cashflow will amply take care of company becoming net of cash debt-free on or before December 31, 2020. In fact, the timeline of the March 2021 was preponed in the company correspondence or maybe to the analysts and all that by December 2020. So even that is seen as feasible and achievable.

Q: The stock has had a very strong run, it is sitting at a fresh high. From this price of Rs 1,670 how does the risk reward looks like for long-term investors?

A: I have been giving the price target of Rs 1,800 all along these part-part monetisation which we have been seeing in the Jio Platforms but as I said that I am seeing this press release by the company, which is crystal-clear, the blueprint for the next couple of years and taking that into account, I am revising my target upwards to about Rs 1,900 as of now because unless until you see that clarity on the Jio Platforms listing, which can be a big trigger and I don’t think that now they will be in a hurry to hive off the O2C at the lower valuations. So the two triggers which I have been looking for got added with one more trigger of the Reliance Retail valuation. So taking all this into consideration and I am giving lot of credence to this press release as the blueprint for the next couple of years, I am revising my target upwards to Rs 1,900 by March 2021, that is in the next eight-ten months.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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Next key trigger for RIL shares could be likely IPO by Jio Platforms: SP Tulsian

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Reliance Industries’ telecom arm Jio Platforms has roped in its sixth global investor in 6 weeks : Abu Dhabi-based global investment company Mubadala will pick up a 1.85 percent stake in it for Rs 9,093.6 crore. In an interview with CNBC-TV18, stock market expert SP Tulsian of sptulsian.com shared his views on the RIL stock.

“On this Jio Platform monetisation, I think that every placement which we have seen of the Abu Dhabi now Mubadala is giving good valuation or expected to give good valuation to the primary market listing as well as the secondary market thereafter to the Jio Platforms. Obviously the Jio Platforms higher valuation will translate into capturing the higher value on sum of part basis into the RIL also. Though I was expecting it to come to an end but Rs 87,600 crore having mobilised, now I think that one tranche of Microsoft is remaining which may see the dilution of over 3 percent for maybe about USD 2 billion. If that comes in then thereafter the preparation for all this IPO of Jio Platforms will start. That will be seeing giving very good valuation to the company that is Jio Platforms,” he said.

On RIL, he further mentioned, “My target of Rs 10 lakh crore market cap and Rs 1,590 has already been captured, which I have been giving for this week. People have been little apprehensive that maybe after the rights issue, the share price will fall and all sort of things but I think that the newsflows, which we have seen, shows the might of the RIL that they can raise Rs 1 lakh crore by part monetisation, maybe till now they have monetised only 19 percent in Jio Platforms and even if they monetise 22 percent, they can mobilise Rs 1 lakh crore and the largest rights issue have evoked such a good response of Rs 54,000 crore, all things will definitely be adding and we should allay the fears of many of the long-term investors with this global player coming into the Jio Platforms where the larger part of the valuation will get reflected into the share price of RIL also. So as of now, till this newsflow of Jio Platforms IPO and the monetisation of parts taking oil-to-chemical (O2C) business comes in, I keep my target of Rs 1,800 on the share price.”

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market veteran SP Tulsian discusses stocks that were in the news today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Market veteran SP Tulsian of sptulsian.com in a freewheeling chat with CNBC-TV18’s Anuj Singhal and Sonia Shenoy analyses the fundamental side of the market as well as specific stocks and sectors.

Talking about the rally in banks he said, “I think if the FII are again seeing taking an entry in the HDFC’s table because you need to have the comfort on the HDFC and other corporate lending banks maybe like ICICI Bank, Axis Bank or maybe HDFC Bank or maybe Kotak Bank. So yes the short covering is definitely seen there, but this is all led by the huge renewed buying coupled with the buying maybe by the FIIs also once we have seen the good recovery having taken place in US and European market.”

Speaking about Bajaj Finance, Tulsian pointed out, “I will restrict my view on the stock with respect to the call given by the management. First two or three things that credit cost is going to rise for the company may be 80-90 basis point that is one negative seen.

“Secondly, maybe from August or September things will start improving at their end in respect to the credit growth. Thirdly, I don’t know how much they are equipped for the recovery part of this because next couple of months also seem to be quite crucial so these three things seem to be quite negative and bad.”

He added, “On a fundamental basis and going by the management commentary you only have the hopes being given by the management, which may not fructify so it is better to play safe and in this environment. There is no point in talking of the credit growth or the deposit growth, but more of the price to book parameter and the credit cost seen rising. And both the things are seen to be quite high and alarming for Bajaj Finance so probably, I will wait for the stock to allow consolidation at least for a week to 10 days and it should not break the level of Rs 2,000 and once that happens that rules for 6-7 days then only I will be able to take a call on the stock as buy, otherwise I would prefer to go and buy other stocks like HDFC Bank, Axis Bank or ICICI Bank.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decision.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s what market veteran SP Tulsian has to say about banks and NBFCs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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SP Tulsian of sptulsian.com if of the view that market participants seems to be moving away or exiting from financials and banking stocks. Usually, Bank Nifty is always heavily invested into by all be it funds or investors. It always had higher weightage in the Nifty with over bought positions.

“Many of them are now exiting from the financials and moving into the other sectors so I don’t know till what this pain points continues but only hope is that the counter is going in the oversold position which is the most bullish factor,” he said. “So if you have the delivery based selling seen coming in these stocks then it is a different case but if you see Shorts also getting built in the Bank Nifty and individual bank stocks then that could be the severe point going forward in the form of the short covering but the pain point is people are exiting or reducing their weightage in the banks and financials,” he added.

With regards to NBFCs he said, “When the gold financials are taking a hit like Manappuram Finance and Muthoot Finance, obviously the Shriram Transport Finance Company and Cholamandalam Finance would also take a hit because we have seen 85-90 percent fall in the sales of the commercial vehicles – whether you talk of heavy commercial, medium commercial and all those things and both were seem to be the leader in financing the commercial vehicle market.”

However, the best part is that Cholamandalam Finance has always outbeaten the downturn and showed good performance and Shriram Transport has always been seen as the high beta stock, it swiftly gets corrected by about 10-15-20 percent but swiftly bounces back as well. If you have a longer time horizon of 4-6 months no one can catch the bottom but if you go by their fundamentals, the valuation aspects seem to be quite comforting. If you are a compulsive buyer then look for buying this maybe after a week or so, but otherwise it is better to look for larger banks like HDFC Bank and all those things if you are underweight on this.”

“Maybe both the NBFCs are looking good on a fundamental basis and they have the high beta nature but we will not advice now but maybe allow them to correct further in the next 10-15 days and then look, or look at private sector banks instead of the NBFCs,” he further added.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Excellent time to make investments in quality stocks, says market guru SP Tulsian

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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SP Tulsian of sptulsian.com shared his views on specific stocks and sectors. Speaking about the massive oil and gas rally, he said, the reason for the rise in upstream was only because of too much correction that has happened. So, won’t be taking a call on the upstream companies yet.

With regards to the downstream companies like Reliance Industries Ltd (RIL), if we take the case of petrochemical division – even if the margins seems to be little flattish maybe for a couple of months but overall things will be positive once things get normalized. So, on the petrochemical front, things will be seen quite positive. Moreover, due to the coronavirus scare, plastic and the packaging material used in the hospitals and everywhere is going to see the consumption in the petchem products going forward. That will be ramp up their margins because a huge fall has been seen in crude, he said in an interview with CNCB-TV18.

“Apart from that the capital raising plan of the company is very much in place on two fronts, one on Jio and second on the Saudi Aramco deal.

“So would continue to remain positive on the downstream products, very bullish on the downstream products like petrochemicals and on RIL,” he added.

With regards to Info Edge, he said, “I am taking a cautious view on it. There is no point in getting involved with this unpredictable volatility happening on events. If you seem to be invested in the expensive stocks like Jubilant Foodworks, PVR or maybe Bajaj Finance – all of them have corrected in the similar fashion in this carnage but there is no point in remaining invested because you need to have the comforting portfolio as well. So, I won’t be taking a positive call on this one. When you have big choices available in telecom like Bharti Airtel and Jio.”

“It is better to start picking up the quality when the markets fall. One should flip the investment philosophy at this stage and look for quality when the markets are down. It is a volatility stage and thereafter we will be seeing a stability phase.”

“Market is poised for an excellent time for making investments in the quality stocks. So, keep an eye on the sectors which seem to be beneficiaries like we discussed – the petchem sector,” he further mentioned.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s why one should expect to see some value buying emerge, says market expert SP Tulsian

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian equity markets rebounded at the end of Friday’s session. The Sensex ended 1,628 points higher at 29,916, while the Nifty rose 486 points to settle at 8,750.

“This is seen to be a very big recovery and whatever selling which we have seen in last half an hour or so may not be on the announcements of the Maharashtra government directing closure of the offices. It might be more because of the FII selling because that is the pattern we have been seeing for last 3-4 days that after 1:30pm in the last couple of hours we have been seeing this kind of selling coming in.” said market expert SP Tulsian of sptulsian.com.

He further added, “The Dow Jones futures is now about 900 points up and that is seen to be giving the shiver in the spine of the short sellers that if you see any kind of improvement coming in again Monday morning, you will be seeing gap-up opening coming in and that is the reason a lot of short covering is seen.”

“I am not ruling out the value buying as well because always short covering gets preceded by value buying coming in and that is what is happening now,” he added.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SP Tulsian still upbeat on these private sector banks and consumption names

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Among private sector banks, it is a foregone conclusion that two banks are the best – HDFC Bank and Kotak Mahindra Bank in terms of safety and comfort on the asset quality they seen to be the best, said market expert SP Tulsian of sptulsian.com.

“On the second rung, you could place three banks in this category – ICICI Bank, Axis Bank and third is State Bank of India. ICICI Bank has already seen a big fall in the last 3 or 4 days and probably that is also seen partly happening in Axis Bank and to some extent in SBI as well. So now I would really be worried more on further destruction of sentiment on these three banks.”

“In morning, HDFC Bank was down 10 percent, Kotak Mahindra Bank was down by about 13-15 percent but now both these stocks are in green, so probably the same thing could happen with Axis Bank tomorrow or day after as well because you have some kind of technical factors. However fresh investments should be looked more into the HDFC Bank and ICICI Bank at this stage,” said Tulsian in an interview with CNBC-TV18.

Speaking about consumption sector he said, it is the most preferred sector. “For the  last 3-4 days all of them have corrected severely. Today Asian Paints was down by about 12-13 percent but now it has recovered. So consumption is definitely a theme and if you wish to take a call you have at least 8-10 stocks available. I think it is time to take a call on the stocks like may be Colgate Palmolive, Godrej Consumer, Dabur India, Bata or may be HUL.”

He further added, “Moreover, this is a time to look for valuation. There is no point in looking for just the herd mentality that go and buy the stocks which are having a PE multiple of 60 or 65 because that was the biggest mistake that investors had committed by investing in richly valued consumption stocks.”

“So, the theme remains of consumption but not the theme of investing in the stocks of having high PE multiples,” he said.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Check out: SP Tulsian is a buyer in these select consumption stocks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Fundamental market expert SP Tulsian of sptulsian.com is of the view that if you take a call on the Nifty future and Bank Nifty future, both are seen to be ruling at a discount – 150 points for Bank Nifty and about 70-80 points in Nifty. That means the shorts are still seen to be in the system.

“There is no doubt that the volatility will keep happening because of the way US will behave and everyone will follow the US market. But maybe the US is also seen bottoming out. So, valuation has to come into the play. So, taking that into consideration, at least the theoretical bottom of 21,400 on Bank Nifty and 8,600 on Nifty has formed,” he added.

Stock specific,  on Jubilant Foodworks, he said, “When we have so much fear and panic, we get brave by making investments in such stocks. But I don’t think that this is the time to look into the stocks which are having such deep discounts in futures as compared to spot.  So I do not understand the valuation of Jubilant Foodworks,  as well as PVR. So, we will continue to have negative bias more because the future rates are seen to be ruling at much lower levels and that maybe is giving some kind of discomfort.”dd

One can even look to buy Asian Paints kind of stocks, he said because that seems to be a direct beneficiary of the lower crude.

“We are a buyer in the consumption space but selectively on stocks like Dabur, Godrej Consumer, Marico or maybe Colgate Palmolive kind of stocks,” he added.

SP Tulsian is a well-known equity analyst with more than three decades of experience. Tulsian has an acute sense of logic and is respected for his frank and forthright views.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow