Regarding the government's directive to Reliance Industries regarding gas prices, SP Tulsian of sptulsian.com views the deficit in gas production announced by the government as a negative . Tulsian also disagrees with the move to set a ceiling on gas prices. "I don't think the market has any reason to worry about the ceiling. The government directive highlighting Reliance Industries' obligation to supply the outstanding gas at the same price of USD 4.2 per mmbtu seems to be very harsh in view of the lack of clarity regarding the pricing policy of the outstanding gas."
Tulsian adds that the government's move has forced Reliance to return to normal production levels . "Though Reliance Industries will resume normal production from March 15. 2014 or later, I don't think that any producer can really suppress production going forward. I don't think the new prices set by the government will cause an incremental increase in the cost of gas production. The new pricing policy is still quite remunerative and I don't think that the gas production can suppressed or curtailed from March 2015."
IndusInd Bank fell by around 1.6 percent despite earnings being in line. Tulsian says that the bank's PAT stands at Rs 33-35 crore even after discounting the impact of the extra income of about Rs 50 crore and floating provisions, thanks to high other income. "Investors have started to book profits after the stock witnessed a good run-up in anticipation of strong earnings."
Titan Industries has been gaining for the past two days and Goldman Sachs has upgraded its rating on the stock . Tuslian advises investors that the current level of over Rs 250 is a good level to commence profit booking if not going short. "The upgrade report may kick-start short covering see renewed buying. However, this will take time to come inti affect and the stock is likely to remain dull for the June and September quarter. So, my negative view on the stock remains."
Tata Steel has been slapped by two consecutive downgrades by brokerages. The market expert says that he is negative on all ferrous metal stocks. "The situation at Corus continues to remain dull and the steel major's consolidated earnings are much poorer than its standalone results. Add to this is the debt of over Rs 55,000 crore most of which is in foreign currency. I am negative on the stock and won't be surprised to the see the stock touch Rs 220 in the next six-to-eight months."
Though JP Associates has been ruling quite weak in the past few trading sessions, a brokerage has set a target price of almost Rs 100, Tulsian says that in the near-term, conditions are quite weak for the company. "There are no indications regarding the monetisation of its cement plant or the sale of its 4.8 million tonne stake in Gujarat Cement. And the Q1 numbers are likely to be bad. I'm negative on the stock at least for next month or so."
Regarding education stocks , Tulsian advises caution on grounds that the positive momentum may fizzle out faster than expected. "Investors are advised to make an exit if not booking profit and plan to enter at lower levels."
Apart from Infosys , Sintex is also to declare results on Friday. Tulsian expects the EBITDA to be about Rs 220 crore, Rs 100 crore as interest and depreciation of Rs 45-55 crore. "The PBT would be about Rs 120 crore. I am unable to take a call on the forex provision which will have a decisive impact on the earnings."
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