HDFC, Jaypee Infra & Karnataka Bank top Tulsian's picks

Market analyst SP Tulsian of sptulsian.com, in his analysis of the day's stocks, explains to CNBC-TV18 that he is positive on Jaypee Infra on plans to monetise its large of tracts of land across Delhi. Tulsian is also positive on Karnataka Bank due to renewed buying and picks HDFCwhose warrants will lapse in August.

Below is an edited transcript of the analysis. Also watch the accompanying video.

Q: What kind of targets would you set on both MCX and Financial Technologies ?

A: I think this is the time for profit-booking because in the morning the estimate was about Rs 810 for Financial Technologies. MCX has already seen a huge run up last week while Financial Technologies did not participate in the same proportion. So maybe the time has come to exit.

I won't advise investors to create long positions in Financial Technology because that is available in the F&O space. Courageous traders can take a short position on Financial Technologies of about Rs 800.

Regarding MCX, the time is ripe for profit-booking by short-term investors. They can look to enter maybe on a likely correction of Rs 60-75 in MCX in the next one week or so.

Q: Paper stocks have been quite active. AP Paper is up around 11% and is to announce results next week. Any paper stocks that you would recommend? What's keeping them so active?

A: I have always distanced myself from paper stocks as an investor.

But if you take a call on AP Paper, I don't think that it has anything to do with the announcement of results next week. The results for the last two quarters, after a change of management, have been very horrible and pathetic.

The main reason for this surge is on the buzz of delisting by promoter International Paper who holds a 75% stake. A probable delisting of the stock could trigger the stock to move up. The surge in the stock was also due to accumulation for the last one week.

Regarding West Coast Paper , which was up 6%, there are continuous news reports of a possible sale of stake by the promoters. But I don't think that these news reports are of any relevance because the occurrence of the sale of stake has been denied by the management.

So it is risky to trade in AP Paper and West Coast Paper. It is better to avoid both at the current level.

Q: Jaypee Infra moved up quite well today on talks that the Yamuna Expressway will finally see the light of day by July 17 -18. How much of a run-up do you expect to see in the stock?

A: I am taking this as a very big positive for the stock. The focus should not be on the 165 KM expressway which might yield revenue of Rs 200-250 crore.

The big trigger will be monetisation or increase in the value of the land which the company holds in five tranches of 1,235 acres each with a tranche in Greater Noida, two tranches in Gautam Buddha Nagar, one at Aligargh and one in Agra.

Analysts thumbs down Infosys results; will TCS march ahead?

"From bad to worse" is how Kotak Instutional Equities summed up the disappointing results announcement of Infosys  . The India's second largest software services exporter had missed expectations on several parameters -- First quarter net profit  rose lower-than-expected 33% year-on-year (down 1% sequentially) to Rs 2,289 crore, while revenue was barely in-line at Rs 9,616 crore, up 29% (up 9% quarter-on-quarter).

Analysts on average were expecting Infosys to report a net profit of Rs 2,448 crore on revenue of Rs 9,665 crore.

For the last quarter, its EBIT margin was down to 28% from 29.9% in Jan-March, with clearly some pressure on pricing.

The biggest surprise, though was on the sharp cut in US dollar revenue guidance for the full year.

Majority of analysts had expected Infosys would reduce its FY13 dollar revenues guidance to 6-8% or 7-9% as against earlier forecast of 8-10%.

However, it forecast just 5% growth in USD revenue for the full year, at least USD 7.34 billion this year.

"Infosys missed guidance for the second consecutive quarter and is reflective of poor execution in addition to weak external environment. Credibility of guidance (whatever little was remaining) has been shattered with multiple cuts," said Kotak Instiutional Equities.

In another surprise, Infosys for the first time refused to provide guidance for the second quarter, citing an unclear client spend environment and uncertainties in key markets of US and Europe.

"Poor set of results both quantitatively and qualitatively. We are surprised by 3.5% pricing decline on reported basis. Moreover we belive the decline in pricing is tied to the sharp decline of 5% in fixed price projects and consulting and systems integration also declining by 5%. Further Infosys decision to stop providing quarterly guidance (after a series miss) is also discomforting.," said Spark Capital Advisors.

Infosys had missed its quarterly guidance in six of the last seven quarters, which may have prompted them to refrain from giving any forecast for the July-September quarter, said Viju George of JP Morgan.

"We are disappointed with the revenue outlook, it says atleast 5% but in light of the Q1 performance it seems that even this might be bit of a challenge. So, we will not be surprised if Infosys comes in below that for the year. It's been a difficult time," George told CNBC-TV18, adding the securities firm is likely to revise its estimates downwards.

Other brokerages like Citigroup and Religare also echoed similar disappointment on the company's earnings and guidance cut.

Meanwhile, Infosys' rival and India's top IT company Tata Consultancy Services  will also report its first quarter earnings today post market hours. TCS has outperformed Infosys over the last few quarters and with Infosys failing to meet expectations yet again, the gap between the two could widen further.

Analysts on average expect TCS' profit after tax to grow 11% quarter-on-quarter to Rs 3,250 crore while revenue is seen up by 12% to Rs 14,806 crore.

"if TCS comes out today and maybe even meets expectations...I think you will see money flow towards TCS and probably even increase in the valuation premium," said George of JP Morgan.

"We don't follow TCS but obviously in our view TCS continues to do remarkably well in this difficult environment," said Moshe Katri, MD of Cowen & Co.

While Infosys has struggled some of its rivals have done relatively well, despite the uncertain environment. Accenture last month had reported strong growth. TCS too, at the end of the fourth quarter, at least, had sounded much more positive.

"Going into Q1 I feel much better than what I felt going into Q4...I had commented in January that the discretionary spend is likely to pick-up momentum only a bit later. I think it is beginning to happen. It's eased. We are seeing the projects kicking off. We are seeing the ramp ups," TCS CEO N Chandrasekaran had said post fourth quarter results in April.

So now with the Infosys disappointment behind, investors will be keenly having their eyes and ears pinned on the commentry from the Tata group company.

Infosys shares crashed 10% post the results announcement and at 12:30 hrs, the stock was still down 9% at Rs 2,249.85. TCS shares were down 2.2% at Rs 1,231.30.

As of Wednesday's close, Infosys shares have slipped over 13% so far this financial year, while TCS shares have gained 8% in that period.