- Global news flow & cues
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Tamanna Inamdar and Niraj Shah bring all this and more as we head towards the 'India Market Open'. #NDTVProfitLive
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Tamanna Inamdar and Niraj Shah bring all this and more as we head towards the 'India Market Open'. #NDTVProfitLive
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TVTranscript
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00:00:38 Hello, and welcome to India Market Open.
00:00:52 It's midweek, and it looks a little fatigued
00:00:54 with the street.
00:00:54 But more importantly, those visuals on your screen
00:00:57 that you just saw are, of course,
00:00:59 the first look of the much anticipated Mumbai Trans-Harbour
00:01:03 link.
00:01:03 And I think that's going to change the face of Maharashtra
00:01:06 is what everyone's talking about.
00:01:07 Mumbai, for sure.
00:01:08 What a game changer.
00:01:09 And that connect-- India's longest overseas bridge
00:01:15 will open this Friday.
00:01:16 The prime minister will inaugurate it.
00:01:19 And essentially, a two-hour journey
00:01:21 turns into 20 minutes expected impact on real estate
00:01:26 prices on both ends in Navi Mumbai,
00:01:28 as well as, of course, Surrey, where it begins from.
00:01:32 Just one more thing I wanted to add, Neeraj.
00:01:34 This plan is on for the last 60 years.
00:01:37 Looks sexy, doesn't it?
00:01:39 Yeah.
00:01:39 Looks really nice.
00:01:40 Definitely.
00:01:40 I'm really excited for a drive.
00:01:42 Saloni from the NDTV Profit has done this test drive.
00:01:45 You'll see that full report later on the show.
00:01:47 But we thought we should open the show today
00:01:49 with those exciting pictures.
00:01:50 But you know, it's interesting.
00:01:51 Just one small thing here.
00:01:53 For the longest time since the Bandra-Worli ceiling
00:01:57 came into existence, the picture postcard of Mumbai
00:02:00 changed from something else to that.
00:02:03 Now do we see that also changing,
00:02:05 that at some point of time, the picture postcard of Mumbai
00:02:07 becomes this road and not Worli ceiling?
00:02:09 Not to say Worli ceiling is bad.
00:02:11 It's fabulous.
00:02:11 No, you'll also have the coastal road coming in.
00:02:14 So that--
00:02:14 And then the metro.
00:02:15 So that face, that makeover we've been waiting for.
00:02:19 Since it's the house of the capital markets,
00:02:21 we thought we should give it a name.
00:02:22 But less people think that we are married to Mumbai alone.
00:02:25 No, not necessarily.
00:02:27 The world and the markets at large calling as well today.
00:02:29 Absolutely.
00:02:29 Let's start with what's happened overnight.
00:02:31 Global Q is mixed, a mixed bag really.
00:02:34 On Wall Street, some fatigue.
00:02:35 Like Samina said, that was absolutely the right pitch
00:02:37 for what's happening globally as well.
00:02:39 Fatigue setting in global markets and Wall Street
00:02:43 struggling to hold on to the gains.
00:02:45 The NASDAQ, the only one which actually closed in the green.
00:02:47 Dow was down 300 points at one point,
00:02:50 though did recover at close, as markets closed.
00:02:54 Let's look at what's happened with the 10-year.
00:02:56 So hovering over the 4% mark.
00:02:59 Key data is going to be in focus, CPI, PPI,
00:03:03 up ahead later this week.
00:03:05 And Brent is just the other one I'll talk about.
00:03:09 Crude was down nearly 4% yesterday,
00:03:12 has spiked up once again as Middle East tensions weigh
00:03:15 heavy.
00:03:16 So that one line which I think is important to understand here
00:03:20 is Israel seeing very clearly that most of 2024,
00:03:23 their operations in Gaza will continue.
00:03:26 And that's the concern, that this is not something
00:03:28 which is going to end very quickly.
00:03:31 Just one more piece I'll add.
00:03:32 World Bank came out with its outlook yesterday.
00:03:36 And they say that the global economy
00:03:38 is on its way to record its worst half decade
00:03:41 in the last 30 years.
00:03:43 The global growth GDP figure will drop to 2.4% for 2024,
00:03:49 from 2.6% in 2023.
00:03:51 So that's three consecutive years
00:03:53 of a drop in global GDP.
00:03:54 India, of course, is a different story,
00:03:56 but it's still expected to be the fastest growing
00:03:58 economy in the world.
00:03:59 Just a quick one on that, Tamana.
00:04:01 We enter 2023 with a very gloomy picture.
00:04:04 The world was--
00:04:05 2024.
00:04:05 --2023, actually.
00:04:06 The world was going into a recession.
00:04:08 China was struggling.
00:04:10 Emerging markets like India were going to come under pressure.
00:04:13 Of course, the last six months, so the US and Europe
00:04:15 coming out with expansion policies,
00:04:17 China seeing a turnaround, and equity markets globally
00:04:21 seeing a-- being on a tear.
00:04:22 So while those numbers, as much as they have some value,
00:04:26 I don't know how much of it really
00:04:28 translates into any sort of activity on the street
00:04:30 or investor sentiment, for that matter.
00:04:33 I just remember that meme which went out
00:04:35 on social media on 31st December or Jan--
00:04:37 I don't remember.
00:04:38 And somebody put out this thing, statistic
00:04:40 of what different banks-- this was US-based,
00:04:43 but Wells Fargo to Citibank--
00:04:44 predicted for what the markets would do
00:04:46 and the economy would do.
00:04:47 And everybody got it wrong by nearly 1,600%.
00:04:51 So--
00:04:53 The recession callers definitely had--
00:04:54 Even the markets called, right?
00:04:55 Nobody anticipated S&P to be 24%.
00:04:57 And I think also the Indians said--
00:04:58 I think it was Jigant Mistry who said this.
00:05:00 And he said, never in history has the Indian markets
00:05:04 done seven straight years of a positive run.
00:05:07 We've done eight.
00:05:08 So at the end of six years-- at the end of seven years,
00:05:09 nobody anticipated eight.
00:05:10 At the end of eight, nobody will call for nine.
00:05:13 Let's see if nine happened.
00:05:14 Like they say, the view is only 50% correct.
00:05:15 OK, we need to move on, then.
00:05:16 No, just one more thing.
00:05:18 Conflating markets with economy is not always the best idea.
00:05:21 In fact, the markets are completely detached
00:05:22 from the economy.
00:05:23 Most years.
00:05:24 So--
00:05:25 Like Neeraj said, Mr. Mark in Noserol.
00:05:27 Trade set up for today.
00:05:28 Trade set up for the day.
00:05:29 You know, so as much as we would like
00:05:31 to talk about the long term, the short term
00:05:32 remains, guys, that Bank Nifty was the culprit.
00:05:35 Now, if you see yesterday's trade as well,
00:05:36 the Bank Nifty was weak.
00:05:38 And in fact, dragged the indices along with it.
00:05:41 It's closed at the lowest level since 13 December 2023.
00:05:46 And it's below that key support of 47,500.
00:05:49 Now, I mean, a lot of people talk about the technicals.
00:05:52 As well, I was basing it on what the call put data is.
00:05:56 And for the Bank Nifty, the maximum concentration
00:06:01 was at 47,500.
00:06:03 That is out of the way.
00:06:04 Now the maximum concentration is at 47,000.
00:06:07 If that gets taken out as well, let's see what happens.
00:06:10 The only thing is, from a technical perspective,
00:06:12 I was reading one of the notes which
00:06:13 said that the RSI has come down significantly.
00:06:15 For the Bank Nifty, let's see if that helps.
00:06:17 But 47,000 now remains a key, key level to monitor as well.
00:06:26 Also, on the Nifty, there was very strong put writing.
00:06:31 Actually, and strong call writers
00:06:33 exited, which actually makes the Nifty set up a tad bit
00:06:36 bullish than the Bank Nifty.
00:06:38 And it figures because if you see what happened yesterday
00:06:40 in trade, IT started off with the bank.
00:06:43 IT stocks were not amongst the top 10 gainers.
00:06:45 What held up the Nifty, despite the Bank Nifty looking
00:06:49 slightly skittish, was stocks like L&T,
00:06:52 was stocks like the Adani Twins and a clutch of others,
00:06:55 which came to the fore.
00:06:56 So broader participation really helped the Nifty yesterday.
00:06:59 IT does look strong ahead of the results.
00:07:01 But because of the earnings estimates,
00:07:03 very likely that IT would remain choppy.
00:07:07 In a week, where we see four IT majors come out with numbers,
00:07:12 their weightage is on the Nifty too, is circa 9%, 10%.
00:07:15 But I think on the Nifty, IT substantially higher these four.
00:07:19 And therefore, it'll be interesting to see
00:07:20 what happens to the IT stocks.
00:07:22 Very likely, it'll be choppy over the next two or three
00:07:25 days.
00:07:26 You know, Neeraj, one quick point, right?
00:07:27 And this is--
00:07:28 I don't know whether you've got anything to add to this.
00:07:30 But what we've seen is the texture
00:07:32 of the market on Monday and Tuesday was very similar.
00:07:36 We started high, continued to trade high
00:07:38 till midday trading.
00:07:40 And the minute we tried to move it high and move to high levels,
00:07:42 the Nifty was showing some pressure.
00:07:45 So intraday charts looked absolutely the same
00:07:47 between Monday and Tuesday.
00:07:49 So while also on Tuesday, I think early trade
00:07:52 indicated that we would recoup most of Monday's losses,
00:07:55 that really didn't happen.
00:07:56 In fact, we actually went lower.
00:07:57 And the other thing that we've identified
00:07:59 is over the last three trading days, 21,700 to 21,750
00:08:04 is a clear sort of range the market is playing in.
00:08:07 But your intraday high on Friday was 21,749,
00:08:11 followed by 21,763 on Tuesday.
00:08:14 And on Monday and on Tuesday, we saw 21,724.
00:08:19 So those were some of the levels you want to watch out for.
00:08:21 On the upside, 21,700 seems like a problem area.
00:08:25 21,500 though on the downside, like Neeraj said,
00:08:28 has been respected by bulls.
00:08:29 So that's what you want to watch out for.
00:08:31 It's a tight trading range, but it's
00:08:34 going to remain volatile even as we head into trade today.
00:08:37 After many days, FIs actually sold.
00:08:39 DIs of course came in and bought in the markets yesterday.
00:08:42 A quick take on a few sectors-- and I
00:08:44 don't know if you'd mentioned this, Neeraj,
00:08:45 but real estate actually had a pretty pleasant day yesterday.
00:08:48 Across the board, there was buying scenes.
00:08:50 So from your DLF to your Sobar to your Oberoi,
00:08:53 support is which came from real estate
00:08:55 and a little bit of support coming from health care as
00:08:58 well, media of course getting the lower end of the stick.
00:09:02 But in terms of stocks, one of the big ones
00:09:04 to watch out for this morning in terms of a reaction
00:09:06 will be Vedanta.
00:09:07 Not that the stock has done anything
00:09:09 in the last one year or five years.
00:09:10 It's been a cross underperformer.
00:09:12 In the last one year, it's done 17%.
00:09:14 In five years, it's only done a return of about 30-odd percent.
00:09:17 But the big story here is Moody's
00:09:19 has downgraded their bond restructuring
00:09:21 plan, which had gotten approval from its investors
00:09:24 only last week.
00:09:26 The rating has been downgraded to CAA3 from CAA2.
00:09:31 Moody maintains that they will remain negative on this bond
00:09:34 restructuring.
00:09:35 And they will consider-- in fact,
00:09:37 they consider this transaction to be a distressed one
00:09:40 under their criteria.
00:09:42 So I think that is the key takeaway.
00:09:44 They consider this distress and that can uncarnow well
00:09:47 for any investor of stock in that sense.
00:09:49 S&P of course has also said that they
00:09:51 would post this restructuring actually downgrade the bonds
00:09:56 that have been restructured and delayed.
00:09:58 It'd be interesting to see how the stock reacts.
00:09:59 Some of it could be in the price.
00:10:01 But if I have to imagine, I would expect a gap down
00:10:03 on Vedanta in early trade this morning.
00:10:06 Delta, again, unfortunate bad set of numbers there.
00:10:10 Their revenues are down 59% year on year.
00:10:13 Profitability has also taken a hit by 15.5%.
00:10:17 Their casino and their online gaming business,
00:10:19 which are the two big revenue contributors,
00:10:22 have actually shrunk and disappointed in this quarter.
00:10:25 The new business that's actually done better than expected
00:10:27 has been the hospitality arm.
00:10:29 But that's relatively small in the Delta portfolio.
00:10:32 Apart from that, you have that big GST matter
00:10:34 that the Supreme Court's going to hear.
00:10:36 The arbitrary amount that Delta owes the Supreme Court
00:10:41 on GST payment, not the Supreme Court,
00:10:44 the GST department is to the tune of 23,200 crores.
00:10:47 So we'll have to see.
00:10:48 Delta's also going to be coming out of the F&O band.
00:10:50 So you might see some sharp movements on the stock.
00:10:54 Big gap up, potentially a big fall,
00:10:56 cannot be ruled out if it's out of the F&O band.
00:10:59 - Just that one small piece here,
00:11:01 this is traditionally the strongest quarter for Delta.
00:11:03 Everybody flocks to Goa and other places.
00:11:05 And it has had such a bad quarter.
00:11:07 So the stock has gotten punished,
00:11:08 yes, Ashish Kacholi, et cetera, all exited.
00:11:10 But very likely that there could be a reaction.
00:11:11 - And it's not even being ruled out.
00:11:13 - Yeah, exactly.
00:11:15 - Wouldn't you think that the pain is priced in?
00:11:17 - Very likely, but the results per se
00:11:19 might see some reaction.
00:11:21 - And the GST problem could be priced in,
00:11:23 but the results are, and 60% drop in revenues
00:11:26 is actually fairly substantial.
00:11:26 - It's actually, the revenues are down 15%.
00:11:29 I think profits are down about--
00:11:30 - My bad, my bad, yeah.
00:11:32 Profits are down 60%, but revenues also seen a huge cut.
00:11:35 So it'd be interesting to see why the bottom line
00:11:37 has taken such a big cut.
00:11:38 But hospitality is the only saving grace for now.
00:11:41 The stock itself, I believe, is down 40%
00:11:43 in the last six months.
00:11:44 So we'll see how this one plays out in trade.
00:11:47 The other one, Polycap, this was in the news yesterday,
00:11:49 but you could see an extended reaction coming in on Polycap.
00:11:53 The stock lost 8% in trade.
00:11:55 They've denied tax evasion rumors,
00:11:57 which was circulating in the media.
00:11:59 The company says it has not received any communication
00:12:02 from the income tax department,
00:12:04 while the IT department initiated searches
00:12:06 at a certain, on certain premises of Polycap.
00:12:09 And the stock is one we will watch out for
00:12:11 in today's trade, Tamina.
00:12:12 - Yeah, absolutely.
00:12:14 I just wanted to talk about Mahindra and Mahindra.
00:12:16 I thought the story was interesting,
00:12:18 especially at a time when you are seeing
00:12:21 auto back doing relatively well.
00:12:24 Your numbers from last month,
00:12:26 your FADA numbers were decent.
00:12:28 And Mahindra, Mahindra, the story really is
00:12:31 that Mobile Eye Tech, which is an Israel-based tech company,
00:12:35 is going to supply the ADAS system
00:12:38 to Mahindra and Mahindra for next-gen vehicles.
00:12:40 Now, this is like, not an autonomous driver,
00:12:45 but a smart driving system.
00:12:48 And some models already have it in India.
00:12:50 It's seen as the next move.
00:12:53 And essentially what happens is
00:12:54 if you're driving a vehicle with ADAS
00:12:57 and they see an obstacle,
00:12:58 it'll start slowing down automatically.
00:13:00 So that's a new technology
00:13:03 that Mahindra and Mahindra will bring in.
00:13:05 Lupin, another one I would look at.
00:13:06 And pharma has been an interesting play in this market,
00:13:10 traditionally a defensive play,
00:13:11 but has seen quite a bit of activity.
00:13:14 So Lupin on the radar,
00:13:16 because it's received an approval from the US FDA
00:13:20 for launch of Bromfenac ophthalmic solutions.
00:13:24 What this is, is an anti-inflammatory eye drop
00:13:28 that you put in after you have a cataract surgery.
00:13:30 So they can now sell it in the US,
00:13:32 but it's an exclusive first to file for this product.
00:13:36 And the product is eligible for 180 day exclusivity
00:13:40 with an estimated annual sales of about $182 million.
00:13:45 Just one more, Charm Metallics,
00:13:47 the company has raised 1385 crore rupees through its QIP,
00:13:52 but the QIP price at 576 a share
00:13:55 is a bit of a discount to current market price.
00:13:59 That's one more I'd add.
00:14:00 A lot of brokerage action this morning as well, Neeraj.
00:14:02 - Also, but on Sham as well,
00:14:04 very marquee set of investors who've come in as well.
00:14:06 So it will be interesting to see
00:14:08 what happens to their growth prospects.
00:14:09 I think our colleague, Harsh,
00:14:11 did a very nice conversation with the management as well,
00:14:14 post the QIP, or while the QIP was on.
00:14:16 So good conversation.
00:14:17 People might want to log into our website
00:14:19 or to our social media handles and try and hunt for that.
00:14:22 Now, some other stocks,
00:14:23 the one was right, brokerage calls.
00:14:25 But just before I get to the brokerages,
00:14:29 Tata Power could be interesting, as could be Adani Green,
00:14:31 but I have the numbers for Tata Power.
00:14:33 You know, MOUs don't particularly mean anything,
00:14:35 but these days MOUs are also seeing stocks fly.
00:14:38 And Tata Power's exploratory agreement with Tamil Nadu
00:14:42 is a very large one,
00:14:43 eight and a half billion dollars in clean energy projects.
00:14:47 Watch out.
00:14:48 If this or Adani Green reacts,
00:14:51 one of the reasons could be this.
00:14:53 Just keep this at the back of the mind.
00:14:56 Couple of brokerage notes which I thought were interesting.
00:14:59 One is Citi on asset managers,
00:15:01 and Samina will do a piece on it,
00:15:03 it is cut on the capital marketplace,
00:15:06 but the Citi note on HDFC AMC is interesting.
00:15:09 They've come out with a note on many stocks.
00:15:12 I've chosen HDFC AMC for a reason,
00:15:14 because they say that they expect HDFC AMC
00:15:17 to deliver 29% YY growth in core PBT.
00:15:20 Why this is important?
00:15:21 Because they expect the others
00:15:23 to clock in single digit growth.
00:15:25 They of course say that the performance
00:15:28 of the equity schemes continue to remain strong,
00:15:30 but they bake in a 210 basis points YY decline
00:15:34 in the core cost to income ratio for HDFC AMC.
00:15:36 So watch out for HDFC AMC today as well.
00:15:38 Was up about 2% yesterday.
00:15:40 Let's see if there is more in store today.
00:15:42 And HSBC on ER&D stocks,
00:15:43 always a topic of conversation
00:15:46 because of the valuations that the KPI detects
00:15:48 of the world trade at.
00:15:49 But HSBC believes that while ER&D stocks,
00:15:54 ER&D spend will come off in 2024,
00:15:57 companies with favorable vertical exposure
00:15:59 will maintain growth pace.
00:16:00 The higher for longer growth rate
00:16:02 will command premium multiples.
00:16:04 That is the key point according to HSBC's assumption,
00:16:06 which is why they have raised the target price
00:16:09 on KPIT tech to 1930 from 1655.
00:16:12 Keep in mind, this is an expensive stock,
00:16:15 but they're maintaining the multiples
00:16:17 because of the vertical maybe that both KPIT
00:16:19 and signed might be exposed to scientists.
00:16:21 The other one, the target presently increased
00:16:23 to 229 from 2294 to 2570.
00:16:27 Watch out for these two names as well.
00:16:28 I might add there is a note on Indus Stars
00:16:32 and we'll get to that as well.
00:16:33 There are some more stocks that I have in mind,
00:16:34 but is there something else that either
00:16:36 if you want to point out in terms of stock specific moves?
00:16:38 Just the IPO that I would come to
00:16:42 is Jyothi CNC Automation
00:16:44 because 2023 was so much about the IPOs.
00:16:47 The IPO rush of 2024 is yet to begin.
00:16:50 But Jyothi CNC, interesting company.
00:16:52 It creates tools for customized machinery
00:16:57 for auto defense space.
00:17:00 And just on day one, the issue was fully subscribed.
00:17:03 Overall subscriptions now at 2.5 times.
00:17:07 But, and retail subscription at eight times.
00:17:10 So maybe that's one to look out for.
00:17:13 - Got it.
00:17:14 So keep an eye out on that as well.
00:17:16 Jyothi CNC would be interested to see
00:17:17 what the subscription looks like in day two and day three.
00:17:19 Just that, finishing that point on,
00:17:22 so Bharti Airtel is being upgraded to neutral by Bofa.
00:17:24 But Indus Tower has got a double upgrade.
00:17:26 So watch out for that one.
00:17:28 I might just have the target price with me.
00:17:30 Give me a second.
00:17:31 But Indus Tower could be an interesting one.
00:17:33 Yes, they have buy, double upgrade to buy.
00:17:36 A target price has been raised to 270 from 148.
00:17:40 So watch out for Indus Towers.
00:17:41 If you can pull up that stock, Indus Towers for you.
00:17:44 If the price at 211, the target price is 270,
00:17:46 watch out for this one.
00:17:47 And very quickly before I toss to the editors,
00:17:49 Khat, some stocks to watch.
00:17:52 These are high flyers which have been included
00:17:54 in the short-term ASM framework.
00:17:56 So everything from a Five Paisa to a Trident
00:17:59 to a Sulabh Inyad's are now under the short-term ASM framework.
00:18:03 So watch out for these stocks.
00:18:05 Might be that we might see a bit of a corrective move
00:18:08 into some of these today.
00:18:08 So these are ones to watch out for.
00:18:10 And the delivery-based data,
00:18:11 we'll talk about these stocks in detail,
00:18:13 but the one stock that I thought was interesting
00:18:15 from amongst these was JSW Energy.
00:18:17 We're talking about energy and power names doing well.
00:18:19 JSW Energy up 8.5% in trade yesterday
00:18:23 on delivery volumes, which are 4.7 times the five-day average.
00:18:26 The reason why this is interesting
00:18:27 because JSW Energy anyways is a very liquid stock.
00:18:30 So watch out for this one as well.
00:18:32 But we are out of time on trade set up right here, guys.
00:18:36 So let's go across to Agam and try and understand
00:18:39 what is it that we're talking on
00:18:40 on this extended session, Agam, of the Editor's Cut today.
00:18:44 - So we know that December turned out
00:18:46 to be a tremendous month for the Indian markets.
00:18:50 And especially with the rise in the turnovers,
00:18:53 what does it mean and the kind of beneficiaries
00:18:55 that could come through on account of the rise in turnovers?
00:18:59 We're also taking into account Moody's view on Vedanta,
00:19:03 calling their recent debt restructuring
00:19:05 default avoidance.
00:19:08 And of course, we're also talking about Praveg.
00:19:10 Now this is a event management and hospitality company
00:19:14 which stands to benefit tremendously
00:19:17 on account of two very large events happening,
00:19:21 upcoming events happening.
00:19:22 So we'll be talking about that as well.
00:19:25 And well, we get off the mark
00:19:27 by talking about Indian capital markets.
00:19:30 We made milestones of all sorts of milestones,
00:19:32 in fact, Samina.
00:19:34 And naturally, if you have milestones,
00:19:36 you also have beneficiaries.
00:19:38 - Yeah, in fact, you track this.
00:19:40 You track this on a daily basis, right?
00:19:42 We talk about options, we talk about volumes,
00:19:43 we talk about all the new product offering
00:19:46 that we're announcing on the exchanges.
00:19:47 And reports have been in the rounds.
00:19:49 I think after Angel One posted those numbers,
00:19:52 everyone woke up and smelled the coffee,
00:19:53 literally, for the sector.
00:19:55 But a quick one, December 2023 volumes in the markets
00:20:00 were at record highs.
00:20:01 Option average daily trading volumes have also jumped up 21%.
00:20:06 Cash volumes are at 47.2%.
00:20:08 I'm going to quickly go through this data
00:20:09 so we can get down to what this means for the industry.
00:20:12 Now, with better looking equity or capital markets,
00:20:15 there are a whole bunch of ancillary play
00:20:17 or beneficiaries, right?
00:20:18 So you've got the exchanges,
00:20:20 you've got the likes of custodians
00:20:21 and the cams of the world.
00:20:23 So you've got your BSC, MCX, NSC, which is unlisted yet.
00:20:27 You've got your custodians, which is your cams.
00:20:30 You've got brokerages,
00:20:31 you've got asset management companies,
00:20:33 you've got transaction advisors,
00:20:36 and you've also got wealth advisors.
00:20:38 So if you have to quickly just wrap this up
00:20:39 and take you through what's really happening,
00:20:41 those are your key beneficiaries that we have.
00:20:43 Data also shows that BSC*,
00:20:45 which is a platform that's used for investors
00:20:48 for investing directly into mutual funds
00:20:52 has become very popular, one.
00:20:54 Two, those numbers are also looking phenomenal.
00:20:57 So mutual fund platforms like BSC*
00:21:00 has continued to show growth momentum.
00:21:02 They've seen a growth in order to the tune of 8.5%
00:21:05 month on month, but a 60% or 59.1% year on year.
00:21:10 Margins have improved as well.
00:21:11 The total mutual fund order value for BSC*
00:21:14 now stands at, or rather owns a market share
00:21:17 of about 68 odd percent.
00:21:19 So the net of this is that you've got various beneficiaries.
00:21:22 Let's start by talking about
00:21:23 what this means for the exchanges.
00:21:26 Very simply put here, better products,
00:21:28 better participation also means better revenues,
00:21:31 better margins.
00:21:31 Your BSC, NSC, which is unlisted,
00:21:34 bound to benefit from this.
00:21:36 MCX, not so much because it doesn't really
00:21:38 be the equity space, it talks about everything else.
00:21:40 I'll move on from there to CAMS.
00:21:42 CAMS is a custodian of all your mutual fund assets
00:21:47 that we've seen.
00:21:48 M2M gains here have been higher
00:21:50 because you are seeing equity market at record highs.
00:21:53 Share in equity continues to improve and boost deals.
00:21:56 Now, I think the big trigger here is
00:21:59 with the new products coming in
00:22:00 and sort of inclusion of some sort,
00:22:04 PMS and EIF, a lot of investors are moving
00:22:06 to higher yielding products
00:22:08 for your asset management companies or institutions,
00:22:11 but also it's higher yielding
00:22:13 in terms of margins for your CAM guys.
00:22:16 AMCs, I think those are the biggest beneficiaries
00:22:18 of this big surge coming in.
00:22:20 Retail participation comes in in form of mutual funds.
00:22:23 Financialization of household savings,
00:22:25 I think that is the key reason
00:22:27 why you're seeing a lot of these AMCs picking up business,
00:22:30 their inflows are going up,
00:22:32 the likes of HDFC, which Neeraj mentioned,
00:22:34 and Trade Setup have actually had funds
00:22:36 that have outperformed the benchmark.
00:22:38 You have the other, Tiberla and UTI,
00:22:40 which have underperformed,
00:22:41 so their flows may not be as good,
00:22:43 and their numbers may not be as good,
00:22:44 but HDFC AMCs are key beneficiary
00:22:47 of this financialization that's happening.
00:22:49 I remember even these AMCs
00:22:50 are considering other product offerings, right?
00:22:52 And the other thing that I read about
00:22:54 was also how wealth management could be an important space
00:22:58 which could create alpha for a lot of these companies.
00:23:02 The likes of Anand Rati have managed to do well.
00:23:04 That's because they've moved away from customization.
00:23:07 So I think that's the other important takeaway.
00:23:09 Wealth advisory was all about customization,
00:23:11 move away from standardization,
00:23:13 but the likes of Anand Rati have gone the other way
00:23:15 and they've said, you know what, keep your margins good,
00:23:18 go away from customization,
00:23:19 standardization's what's working for them.
00:23:21 Wealth advisory also is another arm
00:23:23 where you have not distribution, but advisory,
00:23:26 where there's more client stickiness.
00:23:28 Cost may or may not be as high as you'd like,
00:23:31 but that business also is seeing some growth.
00:23:34 High yield, stickiness with consumers,
00:23:36 all of that put together garners wealth
00:23:38 for these wealth advisory players.
00:23:40 One other quick one,
00:23:41 which I don't think we've seen this in reports,
00:23:42 but I do think there is a correlation of sorts,
00:23:45 with an uptick in the number of companies
00:23:47 hitting the primary markets with listings.
00:23:50 So the IPO churn, QIPs, IPOs, buyouts,
00:23:54 mergers, acquisitions,
00:23:56 garners really wealth for companies like a GM Financial.
00:23:58 Now I haven't seen any reports on this,
00:24:00 but I'm pretty certain that this player
00:24:02 is one of the leaders, at least in India,
00:24:05 with a lot of the smaller IPOs that are hitting the market.
00:24:08 Good surprise on the upside,
00:24:09 so you might see some sort of transaction advisory games
00:24:12 playing in for GM,
00:24:13 but I've been talking for the last five minutes,
00:24:15 so I don't think I need to say anything.
00:24:15 - You know what, on a related note,
00:24:17 I want to ask you a question,
00:24:18 since you do talk to a lot of fund managers
00:24:20 and people who manage portfolios,
00:24:23 this is largely on account of financialization
00:24:26 of household savings,
00:24:27 as well as increasing education
00:24:30 when it comes to the financial markets
00:24:32 among the participants here, right?
00:24:37 - Yeah, certainly all of that goes hand in hand,
00:24:40 we play a part there too,
00:24:41 but the limited point is yes,
00:24:42 everything related to capital markets,
00:24:44 because of the flows,
00:24:45 tends to benefit in some way or the other.
00:24:47 So I mean, for example, just one quick addition to that,
00:24:50 Citi in their note today,
00:24:51 have downgraded UTI AMC as a stock,
00:24:54 but they are all saying that their earnings
00:24:55 will still do well for everybody.
00:24:57 So that is one thing.
00:24:58 And the note also says,
00:24:59 one note also says that Nuama, for example,
00:25:01 wealth manager, Samina was talking about,
00:25:03 might see a surprise in their earnings in Q3,
00:25:06 because 33% of their business is from capital markets.
00:25:10 So it's pretty interesting.
00:25:10 - But I think one caution in the wind,
00:25:12 if the markets and the flow of IPOs does reduce in '24,
00:25:17 you will be taking a little bit of a setback.
00:25:19 And look at those valuations.
00:25:20 I mean, I was looking at BSE yesterday,
00:25:22 it's 88 times, I mean, what have we been talking about here?
00:25:25 These numbers are unheard of.
00:25:27 And you look at their profitability,
00:25:28 it hasn't actually changed much over the last three years.
00:25:31 - So if you think, Agam, if I can take a cue,
00:25:33 if Samina thought BSE at 80 times is expensive,
00:25:36 let me tell you, introduce you to Pravek.
00:25:38 - Oh, of course.
00:25:39 (laughing)
00:25:40 - Yeah, can I do that?
00:25:41 - Yes, yeah, yeah, please.
00:25:42 - So here's Pravek, right?
00:25:44 And because everybody's talking about this stock
00:25:46 in the last two days, because it was up 20% yesterday.
00:25:48 So here's some details, by the way.
00:25:50 Why is this happening per se?
00:25:51 Agam briefly outlined it in any which ways,
00:25:54 but I'll just quickly do it,
00:25:55 because tourism links stocks with regards to Ayodhya,
00:25:57 Shred, Lakshadweep are doing well.
00:26:00 The reports, Tamanna was telling me this yesterday,
00:26:03 the reports of tourists flocking to Ayodhya
00:26:06 after Jan 22nd, because Jan 22nd, they've said,
00:26:08 okay, listen, everybody don't come on Jan 22nd,
00:26:12 come over the next few days, weeks, months.
00:26:14 So apparently those numbers will look very strong, right?
00:26:17 So that is part one.
00:26:18 Apparently, there's a booking frenzy of hotels in Ayodhya.
00:26:23 So this is what's happening.
00:26:24 Now, for Pravek, individually,
00:26:26 PM Modi's visit to Lakshadweep also adds to the fervor,
00:26:30 because they have an operation there too,
00:26:32 and presumably people will feel that
00:26:34 that will also get booked out.
00:26:35 Now, what's happened?
00:26:36 Stock up 20% on Tuesday, but hold your breath,
00:26:40 70% in the last one month.
00:26:42 70%, when yes, the mid-caps have done well,
00:26:45 but not done as well, right?
00:26:47 70% in the last one month.
00:26:49 The report, one of the reports I read,
00:26:50 I think it was a business report that I read,
00:26:52 said that the 10th city in Ayodhya, which Pravek manages,
00:26:56 is booked out at some very high room rates,
00:26:59 or tent rates, as the case may be, for the next few weeks.
00:27:03 So abnormal rates, not just for 20 seconds,
00:27:05 but for the next few weeks.
00:27:06 We have no confirmation if that's true or no.
00:27:08 Our colleague, Pallavi, by the way,
00:27:09 will be going to Ayodhya today, if not tomorrow,
00:27:13 and getting us live updates from there too,
00:27:15 but that's something I'm watching out for.
00:27:17 And Pravek manages the Ayodhya tent city,
00:27:19 and manages a resort in Lakshadweep.
00:27:21 Now, very quickly, for paucity of time,
00:27:26 the stock trades at 90 times FY23 earnings.
00:27:30 Samina, 90 times, compared to BSE's 85.
00:27:33 Now, that is expensive, guys, whether you like it or no.
00:27:37 But what people say is that you don't have to look
00:27:39 at the past, you have to look at the future.
00:27:41 - It's intense.
00:27:43 - Simple, right?
00:27:43 So trying to look at some FY25 numbers,
00:27:47 that seemed more logical.
00:27:48 And this comes on the back of some interviews
00:27:50 that the company's given to other media houses.
00:27:52 I've borrowed some numbers from there.
00:27:54 The company's guided to revenues
00:27:56 of approximately 300 crores by FY25.
00:27:59 For alert, the FY23 revenues were at 84 crores.
00:28:04 So technically, they've guided to trebling revenues,
00:28:07 more than trebling, but trebling revenues by FY25.
00:28:10 Now, I've just done a rule of three,
00:28:13 that if at 84 crores, they did an EPS of 13, 13.5,
00:28:18 at 300 crores circa, what is the EPS that they could do?
00:28:21 Excuse me for that, because they keep on saying
00:28:23 that operating margin ranges between 30 to 60.
00:28:26 I have no way of verifying.
00:28:27 So I've done a simple math, so that's the disclaimer.
00:28:30 On that basis, assuming the same operational metrics,
00:28:34 the P multiple comes down to 26 times FY25.
00:28:39 - Which seems reasonable considering where
00:28:41 the other small cap and mid cap stocks are.
00:28:43 - And relative to what they've done.
00:28:44 Now, the only thing that, and I'll just end with this,
00:28:47 the only thing investors got to account for
00:28:49 is execution risks.
00:28:50 If they're talking of trebling revenues--
00:28:52 - Even if they do double, you're still at about the 40.
00:28:54 - Would, yeah, so the execution risk have to be mapped for,
00:28:58 but if they manage to do everything that they're talking,
00:29:00 then it's not egregiously expensive,
00:29:02 it is moderately expensive.
00:29:04 - Just a quick one, you know, and this is, of course,
00:29:06 before we hand it over to you, while the stock is in focus,
00:29:09 you know what's very interesting,
00:29:10 is while this India-Maldivian rule is currently underway,
00:29:13 the president of Maldives had a China visit planned
00:29:16 a few days ago, which actually kickstarted yesterday.
00:29:18 So I don't know what came first,
00:29:21 but from what I understand, this is his first trip
00:29:23 after he was sworn in as president,
00:29:25 which was actually planned two months ago.
00:29:27 So, yeah, I don't know whether China's happy,
00:29:29 India's sad, but we leave it at that.
00:29:31 - Sure, sure, of course--
00:29:32 - What would be sad because of India tourist bookings
00:29:33 getting canceled?
00:29:34 I mean, he's my trip, telling that we are halting bookings.
00:29:38 I mean, you know, they will feel the pain for sure.
00:29:40 Indian tourists were, apparently, one social,
00:29:42 sorry, last point, because we have to mention this,
00:29:44 there was a social media post, I haven't verified it,
00:29:46 said that Indians were the largest spenders in Maldives--
00:29:49 - In Maldives.
00:29:50 - In 2023, or FY23 is the case, maybe.
00:29:53 If that is the case--
00:29:54 - And I do think Indian tourists will also be slightly
00:29:56 disappointed there, you can't take that away.
00:29:58 - No, it's a great place, but, well, you've got to--
00:30:00 - And 40% of tourists are Indian, you know,
00:30:04 out of the--
00:30:05 - Like I said, it's a great place, but country first.
00:30:07 - 50% of hotels owned there are owned by Indians,
00:30:09 so all your Taj's of the world are actually run
00:30:11 by Indian families.
00:30:12 - Yeah, right.
00:30:13 All right, so that's as far as Pravek's concerned,
00:30:15 and we move on to the final topic that we wanna address,
00:30:18 and that's Vedanta.
00:30:20 We have a Moody's note, which is a curious one.
00:30:23 - Well, yes, Agam, you're right.
00:30:25 I'm not sure if it's a totally curious one,
00:30:28 because this has weighed down on the stock
00:30:31 since quite a while, with regard to how the debt
00:30:33 will get restructured.
00:30:35 Vedanta has always had this debt overhang, right,
00:30:38 and that seems to continue, at least as we go.
00:30:41 Let me try and break down, with regard to the structuring
00:30:44 itself, what has happened.
00:30:46 So, a billion dollars of debt matured January 24,
00:30:51 half of which has been repaid,
00:30:53 half of which has been pushed to Jan of 2027,
00:30:58 and amended bond is gonna be issued for that.
00:31:00 Also, there is roughly another billion dollars,
00:31:04 which was supposed to mature in August.
00:31:07 6% cash given up front, balance has been pushed to 2028,
00:31:12 and a third tranche, with regard to a $1.2 billion
00:31:15 bond issuance, maturing in March of '25.
00:31:18 16% cash has been paid up front, and balance on a 13.9%
00:31:23 bond has been pushed to 2028.
00:31:26 So, a fresh bond issuance for the latter two,
00:31:30 as well as for the first 2024 January bond issuance.
00:31:34 So, that's one thing that's happened.
00:31:36 What Moody's seems to suggest is this is not a restructuring.
00:31:39 Moody's is calling this a default avoidance,
00:31:43 which is quite strong in itself.
00:31:46 What they're suggesting is creditors have incurred
00:31:48 an economic loss in their view,
00:31:50 basis the original promise, and therefore,
00:31:52 they're calling this transaction a distressed exchange,
00:31:56 and not really a debt restructuring.
00:31:59 So, that's just to kind of bring out the context of it.
00:32:03 Now, with regard to Vedanta itself,
00:32:06 I just wanna try and highlight a few points here,
00:32:09 because we have some positives.
00:32:12 It has a dividend yield of roughly 40%.
00:32:15 Whether this is sustainable or not is a question
00:32:18 which I will try to answer, I will attempt to answer.
00:32:21 It's paid around 38,000 crore of dividend in FY23.
00:32:25 I'm taking the April dividend number as well,
00:32:28 because cash flows of FY23 would have accounted for that.
00:32:32 15,000 crore of cash at the end of FY22,
00:32:34 it generated 14,000 crore of PAT,
00:32:37 plus depreciation of roughly 10,000 crore,
00:32:39 so 25,000 crore, rough free cash flow,
00:32:43 and therefore, it paid out around 38,000 crore of dividend.
00:32:46 In FY23, cash balance was roughly 9,000 crore,
00:32:51 and H1 dividend declared is 11,000 crore,
00:32:55 with PAT plus depreciation of 7,500 crore,
00:32:57 but there's a tax, one-time tax impact in Q2,
00:33:02 which we will have to discount for.
00:33:05 So, let's-- - How much is that amount?
00:33:07 - It's around roughly 5,000 crore.
00:33:09 - Okay.
00:33:09 - Because there's a, they've changed their tax policies,
00:33:13 and therefore, that has happened.
00:33:15 And of course, Vedanta HoldCo holds 68%,
00:33:20 or used to hold 68%, up to September of '23.
00:33:23 The holding has shrunk from 68 to 63,
00:33:27 and all of it is pretty much,
00:33:30 it's given up as security against the loans
00:33:34 that they've taken.
00:33:35 So, none of it is a free holding.
00:33:38 But a six-way demerger could lead
00:33:40 to some amount of value unlocking as well.
00:33:43 So, you could see dividend payments continue
00:33:44 to come through, because first half FY24,
00:33:48 the dividend yield, stand-alone first half,
00:33:50 was 11% on current market price.
00:33:53 So, that could continue, given all the debt repayments
00:33:56 which are due going forward.
00:33:58 There's plenty of debt to be repaid in FY25,
00:34:02 all the way up to December, as well as April of 2026,
00:34:06 as well as certain new debt which they've shifted
00:34:10 to FY27, which I just described.
00:34:12 So, all of those repayments may account
00:34:14 for at least $3 billion worth of cash,
00:34:17 which the HoldCo will require,
00:34:19 which can only roughly be funded by dividend,
00:34:22 of course, outside of certain management payouts.
00:34:24 - Sure, sure, sure.
00:34:25 - So, that's how we're looking at the larger picture.
00:34:27 Sorry, too many numbers, but that's how it is.
00:34:29 - No, no, no, that's fine.
00:34:31 Fair enough, Harsha.
00:34:32 Well, so, of course, we're gonna be keeping an eye
00:34:34 on Praveeg along with Vedanta.
00:34:37 We already have spoken quite a bit about the implications
00:34:40 of the increased turnovers, but yeah,
00:34:43 that's what we have in terms of today's edition
00:34:46 of Editor's Cut, but we slip into a short break,
00:34:49 but on the other side, I'm still with you
00:34:51 to take you through the F&OQ, so stay tuned,
00:34:53 and we'll be back in just a bit.
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00:37:50 - Get open, let's take a quick look
00:37:56 at the headlines at this hour before we move ahead.
00:37:59 US markets in limbo again, after a stellar 2023 rally.
00:38:02 Tech stocks are leading the correction,
00:38:04 oil prices stabilize.
00:38:06 India stands out from the rest of the world.
00:38:09 World Bank says India will maintain the fastest growth
00:38:12 among the world's large economies,
00:38:14 even as global GDP is set to fall for a third year in a row.
00:38:18 Gas prices fall, but retailers may not benefit.
00:38:21 City gas distributor is constrained
00:38:24 by a lopsided pricing mechanism.
00:38:27 Indian exporters bear the brunt
00:38:28 of Red Sea crisis trade rates skyrocket,
00:38:31 and France's new Prime Minister, Gabriel Attal,
00:38:34 has many fuss.
00:38:35 He's the youngest,
00:38:35 and he's the first gay Prime Minister of France.
00:38:40 So a lot of global headlines there today.
00:38:42 Let's quickly take a look at how we are set to open
00:38:45 according to the GIFT Nifty
00:38:46 and the implied open this morning.
00:38:48 So about a weakness perhaps, not massively,
00:38:51 but you might open on the downside today.
00:38:55 FNO Space, let's move across to Agam
00:38:57 on what's expected today.
00:38:58 - Right.
00:38:59 Well, we saw a little bit of weakness seep
00:39:01 into our markets yesterday,
00:39:02 in the last couple of hours, in fact,
00:39:05 and that's likely to play out,
00:39:07 at least in open today as well.
00:39:10 The question is, where do we go from here?
00:39:11 And what are the cues telling us
00:39:14 with respect to these markets?
00:39:15 Let's start by taking a look at the index futures.
00:39:17 The Nifty futures were closed marginally in the green,
00:39:21 but there was a lot of unwinding coming through
00:39:23 in the last hour of trade.
00:39:25 Even as the index came off by quite an extent
00:39:27 from its days highs, as you can see,
00:39:29 not too much change on an absolute basis
00:39:32 when it comes to its open interest,
00:39:33 but the Bank Nifty did see a lot of unwinding coming through.
00:39:36 Remember, we're also going into the weekly options expiry
00:39:40 for the Bank Nifty today.
00:39:42 And based on that, we did see unwinding of nearly 4%,
00:39:45 even as the index came off by around 0.5%.
00:39:49 Where does that take us when it comes to the options
00:39:51 market?
00:39:52 Well, for now, while we did see a lot of writing
00:39:54 around 21,700 and 21,800, with respect to those specific calls
00:39:59 as well as puts, well, how does that stack up
00:40:02 with respect to open interest distribution?
00:40:05 And based on max OI, we now have more and more writing
00:40:09 around 21,700 call.
00:40:11 That's on the higher end.
00:40:12 And on the lower end, while you do have a lot of OI
00:40:17 around 21,500, it's not as much as what we have seen
00:40:21 as far as calls are concerned.
00:40:22 At the moment, it does seem like there are more call writers
00:40:25 into the system, and they are betting on the Nifty
00:40:29 to at least stay where it is, even if not for a correction.
00:40:33 But correction is likely.
00:40:35 That said, as far as the Bank Nifty is concerned,
00:40:37 as you can see, we have the most amount of writing
00:40:39 as far as calls go.
00:40:41 Not too much to speak for on the put side, sure.
00:40:43 We have some amount of writing around the 47,000 mark,
00:40:46 but at the moment, that's kind of out of the equation.
00:40:51 Let's talk about stocks then, and we have seen a lot
00:40:54 of shorts building up in Polycab, Dr. Lal Path Labs,
00:40:57 Naveen Flory, along with Coromandel International.
00:40:59 Polycab specifically, because it took a knock
00:41:01 of around 9%, and it's an investor favorite.
00:41:05 And in terms of stocks, we saw unwinding.
00:41:08 That's where we saw about a short covering
00:41:10 for Billasoft, Bandhan Bank, and Hindustan Copper,
00:41:13 but on the other hand, unexpected lines perhaps,
00:41:15 Goldrich Consumer and Zee Entertainment were under pressure
00:41:18 on account of longs unwinding coming through.
00:41:22 But the question is, where do we take these datas,
00:41:25 and what cues can we get from that?
00:41:29 Let's get in a market expert.
00:41:30 We have Shilpa Prabodhastri,
00:41:31 who's joining us on the show.
00:41:33 Shilpa, good morning.
00:41:34 Thanks for joining in.
00:41:35 Let's start off with your assessment
00:41:36 on the benchmarks as usual.
00:41:38 Good morning, everyone,
00:41:39 and thank you for having me on the show.
00:41:41 Talking about the indices, we do see there is some sort
00:41:44 of weakness looming over, particularly for Bank Nifty,
00:41:47 since there's a lot of good ROI unwinding seen
00:41:49 at immediate strikes.
00:41:50 However, the immediate support definitely lies at 47,000,
00:41:54 and if we hold on to the zones,
00:41:55 then a quick reversal towards 47,700 to 800
00:41:59 cannot be ruled out.
00:42:01 Talking about Nifty, we see the individual strike price
00:42:04 PCR at 21,500 is well above two,
00:42:07 which means that there's a cushion placed out there.
00:42:09 And if this sustains again,
00:42:11 the upside moves towards 21,700 to 21,750 can happen.
00:42:16 So the range is very intact for Nifty for this 200 points,
00:42:20 and Bank Nifty, the immediate support levels are there.
00:42:23 So that's a very interesting trade
00:42:25 that we have to watch out now.
00:42:26 And if that happens,
00:42:27 we will definitely see some sort of reversal.
00:42:30 And talking about the sentiment for the session,
00:42:32 it's mostly likely to be positive,
00:42:33 because we still see that FIS,
00:42:35 they are still net longs at 64%.
00:42:38 Yesterday's opening, they were at 62%,
00:42:42 the marginal increase to 64% and half year again.
00:42:46 So that means that they're still building
00:42:48 onto their long position.
00:42:49 So nothing, I don't see a massive fall from here,
00:42:52 but yes, there's intraday dips that can happen
00:42:54 towards 21,500 for Nifty should be bought into,
00:42:58 and Bank Nifty on declines to 47,000,
00:43:01 I believe it's a good buying opportunity.
00:43:03 - Right, Shilpa, let's talk about trading ideas.
00:43:05 I believe one of them is Trent.
00:43:07 - Yes, Trent we saw yesterday,
00:43:09 good long beta to the tune of 4.8%.
00:43:12 And the stock has also surpassed the 3,100 zones,
00:43:16 which was a hurdle for the stock.
00:43:18 So now I believe we are all set to see
00:43:21 30 to 50 to 3,300 zones for the series in Trent.
00:43:25 So in this sector, one can do a bull call spread from here.
00:43:29 One can buy 31.20 call option at around 93 rupees trading
00:43:34 in as of yesterday's closing.
00:43:36 And then also sell 33 strike price call at 31 rupees.
00:43:40 So what happens that the net outflow for you
00:43:44 reduces to 62 rupees, which is roughly at 24,800 per lot.
00:43:48 And the maximum profit potential from here is at 118 rupees.
00:43:53 So risk reward is one is to two,
00:43:56 and the profit potential completely spikes
00:44:00 up to 47,200 per lot.
00:44:02 - All right.
00:44:03 And Shilpa, are you putting a stop loss,
00:44:06 a price stop loss in this case,
00:44:07 in case you mentioned the maximum risk,
00:44:10 but in case if there could be perhaps a premature exit
00:44:14 or on the downside?
00:44:15 - No, I wouldn't recommend that
00:44:17 because it's a bull call spread.
00:44:18 And since the stock has just given a outbreak here
00:44:21 from breakout from 3,100 zones here.
00:44:24 So the momentum one should rally and ride it out.
00:44:27 But yes, if anybody is comfortable at booking,
00:44:30 maybe one is to one or trailing
00:44:32 when you have a handsome gain showing on,
00:44:34 that's completely based on individual's risk appetite.
00:44:37 - Right, right, fair enough.
00:44:37 - That can happen for anybody.
00:44:39 - Fair enough, fair enough, Shilpa.
00:44:41 The other call that you have is on Apollo tires, I believe.
00:44:44 - Yes, the Apollo tire also,
00:44:45 we saw a very good long build time
00:44:46 up to the tune of 3.8% yesterday.
00:44:48 And the stock is trading at around 270 zones in the future.
00:44:52 And this 465, 463 zones is also very strong support.
00:44:56 So I believe Apollo tire from here should see today,
00:45:00 480 to 485 zones.
00:45:02 So I just have a plain vanilla call option
00:45:04 by here at 475 call option trading at around seven.
00:45:07 Keep a tight stop loss of seven rupees.
00:45:09 And I believe that the targets of 18 to 24 can happen.
00:45:12 So the risk maximum you are putting is around 10,000
00:45:16 or per lot and profit potential for this stock
00:45:19 is above 22,000.
00:45:21 - Okay, okay, Shilpa, we leave it at that.
00:45:23 Thanks so much for joining us and taking us
00:45:25 through your views on the markets
00:45:26 and giving us a couple of trading ideas.
00:45:28 Keep an eye on Trent and Apollo tires.
00:45:31 And on that note, it's back over to you, Samina.
00:45:33 - Thanks, Agam for that.
00:45:34 It looks like a choppy, difficult day of trade ahead of us.
00:45:37 Global Q's remember a negative GIF nifty
00:45:40 and implied nifty indicating
00:45:42 to a slightly subdued start this morning.
00:45:44 Well, there will be lots of stocks nevertheless
00:45:46 to watch out for in today's day of trade.
00:45:48 Anushi standing by with more on that.
00:45:50 Anushi, what do you have on the list?
00:45:53 - Morning, Samina.
00:45:53 So I have five stocks under my watch list today.
00:45:57 So I'll start off with Prestige Estates
00:45:59 which came out with its Q3 business update
00:46:01 in the last minutes of trade yesterday,
00:46:04 wherein it reported about 111% growth
00:46:06 in its pre-sales number,
00:46:08 while its collections saw about a 36% uptick.
00:46:11 Do note that the 9M FY24 pre-sales was the highest ever
00:46:15 at Rs. 16,333 crore, up by about 81%.
00:46:20 Now, moving on to Vedanta,
00:46:22 Moody's has downgraded Vedanta ratings,
00:46:24 calling the debt restructuring a default evidence
00:46:27 and adding that the creditors have incurred an economic loss
00:46:31 on their original premise.
00:46:32 Next is Zee on the radar,
00:46:34 where yesterday the Zee was in a lot of focus
00:46:37 after there were talks of Sony India calling off the merger.
00:46:40 Now, over a year, a large trade happened
00:46:42 in which Society General sold about 83.5 lakh shares,
00:46:46 representing about 0.86% stake of the company.
00:46:50 Then we have the likes of Bajaj Auto,
00:46:52 which has launched its second electrical scooter
00:46:54 as part of its EV overdrive,
00:46:55 which is the Chetak Premium,
00:46:57 priced at Rs. 1,35,000.
00:47:00 Bajaj Auto also plans to add a third electrical scooter
00:47:04 over the next few months,
00:47:06 as said by executive director Rakesh Sharma
00:47:10 to our NDTV profit.
00:47:12 Next, the final stock to watch out for today is Lupin,
00:47:15 which has come out with a struck
00:47:16 for the treatment of post-operative inflation
00:47:21 undergoing cataract surgery.
00:47:23 So this is the first exclusive for the product
00:47:26 with a product eligibility of 180-day exclusivity
00:47:30 and the estimated annual sales for the same standard
00:47:32 about $182 million.
00:47:34 So these are the stocks you should be watching out for today.
00:47:36 - Right, thank you for that, Anushi.
00:47:38 There are lots of stocks
00:47:40 that will be driven by stock-specific action.
00:47:42 In fact, Anushi mentioned Bajaj Auto.
00:47:44 I remember yesterday the news broke
00:47:46 that the board of Bajaj Auto
00:47:47 had approved a 4,000 crore buyback.
00:47:51 But the story of the Pulsar Maker goes beyond that,
00:47:55 especially in the EV space
00:47:56 where the company is set to have
00:47:58 three Chetak electric scooters in its EV lineup
00:48:01 from one at present.
00:48:05 ED Rakesh Sharma spoke with us
00:48:07 on Bajaj Auto's EV roadmap.
00:48:09 - We are definitely seeing EV
00:48:13 as a very, very significant development
00:48:17 in the mobility space.
00:48:18 It is beyond a buzzword for us.
00:48:20 And we have been putting in a lot of effort
00:48:24 and capability building in the early phases,
00:48:28 both in R&D, manufacturing, supply chain,
00:48:31 and in exclusive front-end network.
00:48:34 These are very, very EV-specific investments
00:48:38 which have been made.
00:48:40 Now, whether it remains at 5% of two-wheelers
00:48:46 or it becomes 30% and what duration this occurs
00:48:50 or unfolds, we cannot sort of put a number on it,
00:48:55 but we are very sure that this is going to happen.
00:49:00 It opens up opportunities for us in the scooter space.
00:49:04 We are not in scooters,
00:49:05 and most of the EV transition
00:49:07 is taking place first in scooters.
00:49:09 It opens up international markets for us subsequently.
00:49:14 And therefore, when you put all this together,
00:49:16 it's a very big opportunity for us.
00:49:18 - All right, that conversation with the Bajaj ED
00:49:23 available on NETVprofit.com.
00:49:26 Interesting one, considering that the focus also
00:49:28 on how the stock will perform in buyback
00:49:31 as the buyback continues
00:49:32 and what the acceptance rate will be.
00:49:34 I will talk about that and more.
00:49:36 Mayuresh Joshi, Head of Equity Research India
00:49:38 at William O'Neill with us on the show.
00:49:39 I'm also speaking with Chandan Tapadia this morning,
00:49:42 Head of Technical Derivatives Research at MOFSL.
00:49:45 Chandan, let's start with you.
00:49:47 On the levels, it's been a choppy couple of days
00:49:51 for the markets.
00:49:53 You know, one of our speakers described it
00:49:56 as one step forward, two steps back.
00:49:58 What is your outlook today,
00:50:00 considering you're going to see
00:50:01 the Bank Nifty expiry as well?
00:50:03 - Good morning, thanks for having me.
00:50:06 Yes, we have seen some profit booking decline
00:50:09 in last two trading session.
00:50:10 And my only concern is that index,
00:50:12 which was continuously making higher lows
00:50:16 from last nine to 10 weeks,
00:50:18 now getting some pause in the momentum.
00:50:20 However, major trend remain in tech,
00:50:22 but short-term profit booking cannot be ruled out
00:50:24 because multiple indicators
00:50:25 are giving the negative divergence.
00:50:28 We have found a hurdle at 21.850
00:50:30 and that hurdle shifted lower to 21.777 and 21.680.
00:50:35 And because of all these hurdles,
00:50:36 which are shifting slightly lower,
00:50:38 can see some profit booking before it start
00:50:40 the next leg of rally.
00:50:41 So while looking at the entire structure,
00:50:44 I believe 21.680 could act as an immediate barrier
00:50:47 till it remains below the same.
00:50:49 Index has potential to retest a key retracement zone
00:50:52 in support of 21.300 marks.
00:50:54 So I'll play for that.
00:50:55 But if you ask me, major trend that is in tech
00:50:59 until it holds about 21,000,
00:51:00 we will again target to us 22,000 to 22,222.
00:51:04 So here we need to keep it two things.
00:51:07 If you're looking for two, three days point of view,
00:51:09 then look for a decline towards 21.300.
00:51:11 If you're looking for positional,
00:51:13 then utilize this decline
00:51:15 for next leg of rally in the market.
00:51:16 Now talking about Bank Nifty,
00:51:17 today is the Bank Nifty expiring.
00:51:19 And Bank Nifty is now a key important zone.
00:51:23 So it has broken 20-day exponential moving average
00:51:25 on daily chart.
00:51:26 Technically it is forming rounding pattern
00:51:29 and negated the formation of higher tops,
00:51:31 higher bottom on the weekly scale.
00:51:33 And volume at its average for the week is 47,777
00:51:36 and we are almost 500 points lower than the same.
00:51:39 So because of that,
00:51:40 call writers will have dominance.
00:51:42 Some more decline could be there.
00:51:44 And I think it can drip below 47,000
00:51:47 or 46,750 marks during the day.
00:51:49 - You know, very quickly Chandan,
00:51:53 on a day like this, which is volatile, a bit uncertain
00:51:57 and ahead of the big numbers
00:51:59 that are going to come in,
00:52:00 skiing off with IT,
00:52:02 there's a bit of, you know,
00:52:03 what do you do in a market like this today?
00:52:05 So what would be our topics?
00:52:07 - So I'll focus on the counter, which are sidelines.
00:52:10 So first it will be buy on ABB.
00:52:13 We have noticed that selective capital good stocks
00:52:15 are doing well.
00:52:16 And ABB, L&T, Siemens are a couple of name
00:52:18 which are showing the strength.
00:52:20 And here I've selected ABB
00:52:21 because some sort of consolidation breakout is visible
00:52:23 on the daily and the weekly chart.
00:52:25 So we suggest to buy with support of 4,800,
00:52:27 looking for an upside move to us 5,100 marks.
00:52:30 One more trade I've selected from non-FNO counter,
00:52:32 that is buy on NICA.
00:52:34 Technically a long consolidation breakout
00:52:36 of 35 trading session is clearly visible.
00:52:38 It has started to form high rise and lows
00:52:40 from last three days.
00:52:41 A rising volume along with delivery marks
00:52:43 clearly indicates a fresh leg of really.
00:52:45 So one can buy with support of 182
00:52:47 and here we are expecting at least 200 marks in the counter.
00:52:51 - Okay, watch out for both of these in the session today.
00:52:54 And actually that takes me to the queue
00:52:56 to ask Mayuresh in about this.
00:52:58 Mayuresh, good morning.
00:52:59 And thanks for joining in of course.
00:53:02 But you know, interesting point made by Chantan
00:53:04 observation on ABB.
00:53:06 And the reason I bring that up is one thought
00:53:08 that the likes of ABB, Cummins, Siemens, et cetera
00:53:10 are expensive.
00:53:12 But yesterday was a big day for some of these expensive
00:53:15 cap good, cap good slash infra,
00:53:18 whatever automation companies.
00:53:19 What's happening here?
00:53:20 Because these stocks are not cheap
00:53:21 and yet they are seeing buying.
00:53:23 - Morning Mayuresh.
00:53:25 I think the premise that can be put forth
00:53:27 of the argument in terms of the strong price action
00:53:30 that you're probably seeing is the expectations
00:53:32 from the budget.
00:53:34 Last year, 10 lakh crores have been allocated
00:53:36 in terms of the CAPEX token per spend
00:53:39 as far as the budget estimates were concerned.
00:53:42 A lot of news reports suggesting that there can be
00:53:45 an increase of 10 to 15% on that figure on this budget
00:53:49 as far as this fiscal is concerned as well.
00:53:52 So that's a substantial amount in terms of what is expected
00:53:57 to come through as an allocation from the government side.
00:54:00 So as government CAPEX picks up the expectations
00:54:03 in terms of more orders, whether it's roads, ports,
00:54:07 infra development can be substantial
00:54:09 in the coming year as well.
00:54:11 Substantiated with larger order wins with better margins.
00:54:15 And execution is improved for a whole host
00:54:17 of these companies with the timelines
00:54:19 that government is giving in.
00:54:21 I think a lot of crowding in of government CAPEX
00:54:23 will also mean that private CAPEX starts coming
00:54:26 through at some point of time,
00:54:28 which can further accentuate the order book.
00:54:30 So you're absolutely right.
00:54:31 I think valuations are no longer cheap
00:54:33 for any of these stock concerned,
00:54:35 whether frontline or the second tier names.
00:54:38 But I think a lot of these news related reports
00:54:41 is probably expected to do a lot in terms
00:54:44 of more orders coming their way
00:54:46 and therefore more revenue and more execution means
00:54:50 better earnings profile in the next government.
00:54:53 - Okay, well, stay on.
00:54:56 We'll talk about some more news makers
00:54:59 on the other side of this very quick break.
00:55:01 Back with the pre-open session as well in conversation
00:55:04 with Mahesh Joshi and Chandan Taparia.
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00:56:24 - We're back with India Market Open right here
00:56:35 on NDTV Profit and very likely that we'll have
00:56:38 a bit of a flattish start.
00:56:39 The question is only, can we build up from there
00:56:42 or will we have some pressures?
00:56:44 Now, from amongst the news makers,
00:56:48 the interesting thing that we saw today
00:56:51 amongst everything else was, or not just today,
00:56:54 the last few days is what's happening
00:56:55 to the capital marketplace.
00:56:57 Mahesh, coming on some of these names,
00:57:00 BSE was a showstopper in 2023,
00:57:03 but if the volumes are to be believed,
00:57:06 the last one month, Angel One has made its presence felt
00:57:09 by virtue of the quarterly update that is given.
00:57:12 A lot of people talking about how capital marketplace
00:57:14 like JM Financial, Nuwama, et cetera,
00:57:16 could see some good runs as well,
00:57:18 strong capital market revenues likely.
00:57:21 Any thoughts on this?
00:57:22 It's a wide bucket.
00:57:23 What would you like here?
00:57:24 - Yeah, you're absolutely right.
00:57:27 Wide bucket and the markets have been doing phenomenally well.
00:57:30 The kinds of additions that have probably happened,
00:57:32 Neeraj, in terms of DMAT accounts
00:57:35 and specifically tier two, tier three cities
00:57:38 and the expectations on this number
00:57:39 probably expanding northwards at a good pace
00:57:43 in the next few quarters and years.
00:57:46 That is what is keeping capital market participants
00:57:50 in very good territory and very good stead as well,
00:57:52 as far as the earnings outlook is concerned.
00:57:55 Obviously, BSE was a star outperformer
00:57:58 with the expectations in terms of more trading volumes
00:58:01 coming their way.
00:58:02 We saw a lot of primary market offerings as well.
00:58:05 So that probably adds further to their revenues
00:58:07 and the annuity part of the business as well,
00:58:10 along with the optionality in terms of more FLO
00:58:13 related platforms and trades
00:58:16 that are probably getting executed on that front as well.
00:58:19 Capital market plays, including angel,
00:58:21 have done phenomenally well,
00:58:24 as have been most of the players.
00:58:26 But I think the moon has been pretty sharp.
00:58:28 Yes, the payments in terms of more additions
00:58:31 coming their way as capital market penetration
00:58:35 deepens in the next few years can be a good state.
00:58:38 But a large extent in terms of a lot of gestation
00:58:41 as far as valuation is concerned, largely priced in.
00:58:44 To that extent, in the asset management companies
00:58:48 probably are looking a tad bit better at this juncture,
00:58:52 because if the flows have to come,
00:58:54 I think equity-type flows can come in
00:58:56 for these players as well.
00:58:57 And as financialization of savings takes place
00:58:59 over the next few years, more towards markets,
00:59:02 I think these asset management companies, in my opinion,
00:59:05 can be a comparatively better player at this juncture
00:59:08 as we are facing it right now.
00:59:10 (clicking)
00:59:12 - All right, so that's the long and short
00:59:15 of what's happening within the capital market plays.
00:59:18 Keep an eye out for them.
00:59:19 By the way, Mayuresh's ex-company, Angel,
00:59:22 Chandan's current company, Motilal Oswal,
00:59:24 both of them are firm players out there.
00:59:27 Let's talk about the pre-open session in moments from now,
00:59:30 and then we'll get in my colleague, Tushar,
00:59:31 to talk about the ER and deep pocket as well.
00:59:34 But here's the pre-open rates.
00:59:35 It will be all over the place, but just marking.
00:59:38 Very likely we'll not have a 1.5% start
00:59:40 or a 0.9% start as well.
00:59:41 Very likely it'll be flattish
00:59:43 to maybe marginally lower as well.
00:59:45 Let's wait and watch how it shapes up.
00:59:47 The key is what's happening at the broader end
00:59:49 of the spectrum, because the last few days,
00:59:51 those guys have done really well as an index.
00:59:54 The small cap index has been much better
00:59:56 than what's happening to the nifty,
00:59:58 which has been very, very range-bound in a tight pocket.
01:00:02 But another set of stocks to keep in mind
01:00:05 is the ER and deep companies.
01:00:07 Now, HSBC has come out with a note,
01:00:10 with a positive note on these stocks,
01:00:13 at least KPID Tech and Scient.
01:00:15 But the note largely is about the ER and deep space.
01:00:18 And Tushar, I believe they are saying
01:00:20 that maybe the spends will moderate here.
01:00:23 So is there a concern, or are they constructive still?
01:00:27 - Good morning, Neeraj, and good morning to others as well.
01:00:30 So it's still constructive.
01:00:31 What we have to see from this HSBC note
01:00:34 is that the ER and deep pack in India,
01:00:36 that is your science, your KPI technologies,
01:00:39 energy technology services, personal systems,
01:00:41 as well as starter technologies,
01:00:42 which listed in the previous quarter,
01:00:44 have actually shrugged off the pain
01:00:46 that the wider IT ecosystem has seen so far.
01:00:49 So while there'll be some moderation in spending in 2024,
01:00:53 the growth is not going away.
01:00:55 So essentially, companies that are involved in, say,
01:00:58 software, aerospace, automobile technology, and defense,
01:01:03 they are bound to gain.
01:01:04 And all of these companies are in some way
01:01:06 involved in these spaces.
01:01:08 So companies, essentially what HSBC has said
01:01:10 is companies with favorable vertical exposure
01:01:12 will maintain their growth pace,
01:01:14 and these will be higher, longer growth rates,
01:01:18 which will command premium multiples.
01:01:20 So HSBC has raised the multiples for KPIT signed,
01:01:25 but it's holding on to LTTS for that matter.
01:01:29 So, and what, now when these companies
01:01:32 declare their earnings in the second half of this month
01:01:36 and the first half of the next month,
01:01:37 they will get some cues about how they see
01:01:40 how 2024 is going to figure out.
01:01:42 You also have to remember that this is the first quarter
01:01:44 Tata Technologies will be reporting its earnings.
01:01:47 Over to you, Raj.
01:01:49 - Okay, thanks a lot for that, Tushar.
01:01:51 So we'll watch out for these names.
01:01:53 Coming on here, Mahesh and maybe Chandan
01:01:56 can give a trading opinion too,
01:01:58 but do you like the R&D stocks,
01:02:00 or are they very expensive?
01:02:01 HSBC believes they are not.
01:02:02 - Obviously, they are expensive, so I think--
01:02:05 - Or HSBC says, sorry, HSBC says
01:02:07 that the higher multiples will sustain.
01:02:09 Excuse me for that, yeah.
01:02:11 - No, so they are expensive,
01:02:12 but whether earnings will come through in the nearer GS,
01:02:15 because they have decent order wins,
01:02:17 they are having good order books at this juncture.
01:02:20 And if you go by management speak,
01:02:22 you hear the KPIT management as the example,
01:02:24 Esonhatta management as an example as well.
01:02:26 They're sounding very, very confident
01:02:28 in terms of delivering excellent constant currency,
01:02:31 stroke, dollar revenue growth.
01:02:33 And the execution is based on the premise
01:02:35 of the order book that they are carrying
01:02:36 and expectations of more orders coming their way,
01:02:40 as the industry probably deepens,
01:02:42 both from a geographical perspective,
01:02:44 as far as the product and a platform perspective as well.
01:02:47 From a valuation perspective and a late stage perspective,
01:02:50 as we see it at Markets Better India,
01:02:51 I think DPSRS ratings are very, very good,
01:02:53 but they are in late stages,
01:02:54 which probably means that valuations are expensive.
01:02:57 We've been very, very selective here,
01:02:59 so out of the entire list of stocks,
01:03:01 I think SCIENT is something which is still an actionable,
01:03:04 is what we feel on any pullbacks.
01:03:06 And as a disclaimer,
01:03:07 we continue to hold that in our daily portfolio.
01:03:10 - Right, let me just get your view Chandan,
01:03:12 on this space, the ER and D space, KPIT, SCIENT,
01:03:17 well on the charts, not really data tech,
01:03:19 because it's a newer listing, but in that space,
01:03:22 anything that you like specifically there and KPIT,
01:03:25 do you see more upside in value?
01:03:28 - Yeah, so let me talk about SCIENT and KPIT tech first.
01:03:32 So KPIT tech has been consolidated in the range
01:03:35 from last 32 trading session,
01:03:37 but the good part is every small decline is being bought,
01:03:39 which clearly indicates that demand is clearly visible
01:03:43 and supports are intact.
01:03:45 The stock is holding well above its key moving averages
01:03:47 and just trying to surpass the consolidation band.
01:03:50 So conditional trade will be there,
01:03:52 but yes, bias is positive
01:03:53 and looking for the next leg of rally.
01:03:55 As of now, one can buy with support of 1485
01:03:58 and here I'm expecting a run up to us, 1600 zone.
01:04:03 If I talk about SCIENT, trade setup is quite positive.
01:04:07 We have noticed that a couple of IT stocks fell down sharply
01:04:10 from higher levels, but these were the name
01:04:12 which were holding well,
01:04:13 which clearly indicates about the relative strength.
01:04:15 So SCIENT also seems like the consolidation
01:04:18 and correction of last seven, eight days is now getting over.
01:04:21 With support of 2200, we can expect a run up to us,
01:04:24 2400 levels in SCIENT.
01:04:26 So overall, positive to range bound bias
01:04:28 in both the name, including KPIT and SCIENT.
01:04:30 - You know, another stock in focus is Delta.
01:04:34 Numbers were out.
01:04:35 The Q3 numbers are showing the pain of policy move,
01:04:40 essentially to tax all of this online,
01:04:44 we'll call it gambling or gaming or whatever at 28%.
01:04:48 So you've seen profit down about 60%,
01:04:50 margins also contracted substantially.
01:04:53 Mahima joining us for more details on the extent of pain
01:04:57 that has been seen in Delta.
01:04:59 Mahima, if I were to ask you whether at the end of the day,
01:05:02 less people are going in for these games
01:05:04 because of the 28% GST,
01:05:07 is that clearly visible in the revenue numbers?
01:05:09 - Right, Tamanna, so it's clearly visible in the numbers.
01:05:11 The revenue is down 15%.
01:05:13 If we talk about the EBITDA, EBITDA is down 45%.
01:05:17 The PAT is down nearly 60%.
01:05:19 And if we talk about the margins,
01:05:20 the margins have decreased from 37% to 24%.
01:05:23 So clearly the 28% GST is impacting companies like Delta Corp.
01:05:28 Also, the revenues, the two biggest business divisions,
01:05:32 that is their casino business and their online gaming,
01:05:35 saw a sharp decline in revenue for this quarter.
01:05:37 Their hospitality revenue increased marginally by 8%.
01:05:40 However, it is still not shown a bigger impact
01:05:44 on the EBITDA or PAT.
01:05:45 Their employee benefit expenses
01:05:47 are also increasing at present.
01:05:48 And the tax expenses overall have increased five times
01:05:52 since December 22.
01:05:53 Now, following up,
01:05:56 they've also received a lot of GST demand notices
01:05:58 and they've received GST demand notices
01:06:00 up to 23,200 crores.
01:06:03 Now, the company has said that they have good grounds
01:06:07 to defend against these notices.
01:06:09 So they're not providing for these
01:06:11 and they're not even impairing their goodwill against this.
01:06:14 Because if we see the company's market cap is of 4,000
01:06:16 and the notices that,
01:06:17 accumulative notices that they've received
01:06:20 is 23,200 crores.
01:06:23 So it's not possible for them as well.
01:06:24 And if you talk about the valuation of the company,
01:06:26 it is currently trading at a PE of 15.42.
01:06:29 Also, the stock has not been performing well.
01:06:32 In the six months, it's down 38%
01:06:34 and one year it's been down 28%.
01:06:36 So overall, the picture doesn't look very good.
01:06:39 Indeed, it doesn't look good for Delta Corp.
01:06:42 Mayuresh, you wanna comment on this one?
01:06:43 I mean, the valuations don't look expensive,
01:06:46 but the outlook is so bleak for Delta Corp.
01:06:49 Numbers for a, you know, historically great quarter
01:06:52 have been disappointing.
01:06:54 Profits have taken a hit.
01:06:55 Top line is not looking good.
01:06:58 Their two main businesses are shrinking.
01:07:00 The only thing that's growing marginally
01:07:02 has been the hospitality space.
01:07:04 I mean, is this even worth considering?
01:07:06 How do you expect Delta to behave?
01:07:09 Is it, I mean, would you buy this
01:07:10 on hope of a pullback at some stage?
01:07:13 No, I think there is clearly a lot of overhang
01:07:15 as you pointed out, Samina.
01:07:16 All this overhang in numbers,
01:07:18 as well as the overhang in terms of the GST notices
01:07:20 that they've probably received
01:07:22 is going to remain overhang in the near future,
01:07:24 as well as far as the potential contingent liability,
01:07:28 if any, that may come through.
01:07:29 So to that extent, I think much better plays out
01:07:32 in the broader markets, not going up.
01:07:34 Chandan, what do you think about Delta Corp?
01:07:39 It may be coming out of the F&O ban today.
01:07:42 Big reaction could be anticipated.
01:07:44 Do you think an opening,
01:07:46 you could look at, one could look at shorting the counter?
01:07:49 Usually I avoid this name
01:07:50 because it turns highly volatile.
01:07:53 Mainly stock moves because of the news and other activities,
01:07:56 but yes, upside seems to be kept.
01:07:59 And I believe if negative trigger is there,
01:08:01 then weakness could persist
01:08:02 because overall structure is sell on bounce
01:08:04 and every small bounce is being sold.
01:08:07 So 155 is immediate hurdle,
01:08:10 and on weakness it can drift to us 140 to 138 levels.
01:08:14 Mayurisha, quickly, you want to get a view,
01:08:16 in fact, that's Delta Corp on your screen.
01:08:18 It's down 2%, of course, these are early trades,
01:08:20 could get a gap down and could continue to sell off
01:08:22 for all we know.
01:08:24 Mayurisha, I want to talk about chemicals
01:08:26 in particular this morning
01:08:28 and crop protection chemical companies.
01:08:30 Kotak put out a report yesterday
01:08:32 saying that this sector could be getting downgraded again.
01:08:35 So your Naveen Fluorine, SRF, Tata Chemicals, Deepak Nitrite,
01:08:40 valuations are expensive, stock prices are still high,
01:08:46 and more importantly, disappointing returns
01:08:48 is what they are putting out and saying.
01:08:51 Do you think it's going to be a difficult quarter
01:08:53 for the crop protection chemical industry
01:08:55 with exports also likely to hurt more than domestic sales
01:08:59 on back of constant destocking that's currently underway?
01:09:02 Absolutely, and in fact, this quarter and the next
01:09:05 might be a little bit tough as far as earnings is concerned.
01:09:08 And therefore, I think the entire element
01:09:10 in terms of pricing not being in their favor,
01:09:13 destocking that is clearly playing out at this juncture,
01:09:16 and the large expectations in terms of both these variables
01:09:19 playing out both in terms of top line and margins
01:09:23 probably mean that the bottom line
01:09:24 probably is still going to struggle
01:09:26 for at least a couple of quarters.
01:09:28 So yes, I think there are certain headwinds
01:09:32 for certain chemical plays.
01:09:34 Obviously, the expectations, I mean,
01:09:36 is that the first half of the next financial year,
01:09:38 there should be some structural recovery
01:09:41 that happens for these specialty chemical plays
01:09:44 as restocking starts taking place.
01:09:46 So the expectations in terms of more pricing
01:09:48 coming their way, backward integration
01:09:50 and the China plus one thing.
01:09:52 But I think you have to be very specific
01:09:54 within the these specialty players here.
01:09:56 A lot of the commodity chemical companies,
01:09:57 stock agrochemical companies
01:09:59 might still struggle for the next couple of years.
01:10:02 Just another stock I wanna talk about,
01:10:04 and we focused on it a lot yesterday.
01:10:07 It's looking buoyant, in fact, in pre-market trade Z.
01:10:12 Let's just pull up Z and what's happening there.
01:10:14 A lot of flip flops back and forth,
01:10:16 exclusive story that NDTV profit broke yesterday afternoon
01:10:20 saying that good faith negotiations
01:10:22 are very much on with Sony and Z.
01:10:24 A couple of hours later, Z put out a notice
01:10:27 to the exchanges confirming that story.
01:10:30 And it's showing an up move, at least in a pre-open trade.
01:10:35 Now, Mayurish, I'll come to you first.
01:10:39 With so much of uncertainty and overhang,
01:10:41 would you stay completely away from a stock like that?
01:10:45 Yes, because I think as a fundamental analyst,
01:10:47 anybody would like some clear clarity coming through.
01:10:51 And if that clarity is not coming through
01:10:53 for various factors and reasons thereof,
01:10:56 wait for that clarity to emerge and then probably take a fall.
01:10:58 So we'll just wait out for the clarity to emerge on this.
01:11:02 I'll just take a view with Chandan as well
01:11:05 on the entire media space, of course, starting with Z.
01:11:08 Anything that you like over there?
01:11:10 So like we have seen some sort of volatility
01:11:12 in media names, I love it.
01:11:14 TV18 is one name which has given a good breakout
01:11:18 couple of days when some profit booking again happened.
01:11:21 So I believe near 50 to 54,
01:11:24 one can accumulate with upside target of around 62 levels.
01:11:28 Talking about Z, some sort of volatility could be there.
01:11:31 Whether support is intact near 245.
01:11:35 If 245 is broken, then need to worry,
01:11:37 otherwise likely retain in between 245 to 275 zone
01:11:41 for next upload days.
01:11:42 Mayurish, you wanna come to all cargo logistics?
01:11:47 The stock was on a tear ahead of its bonus issue
01:11:51 that happened on the 2nd of Jan.
01:11:53 Post then, of course, it's quieted out,
01:11:54 but lots of business restructuring,
01:11:56 then the numbers are looking phenomenal,
01:11:59 the outlook is looking promising.
01:12:01 And the only overhang that stock probably had
01:12:04 was the fact it was a very complicated entity
01:12:06 for investors.
01:12:07 With all that now behind all cargo logistics,
01:12:10 would you buy this as a strategic investor?
01:12:13 Very interesting.
01:12:15 And I think the space itself,
01:12:16 I mean, it's very, very interesting.
01:12:17 So yeah, it's going through a lot of change as we speak
01:12:19 from a business model perspective.
01:12:23 But we'll be very, very selective here.
01:12:25 So our take is that the gateway district parks,
01:12:28 as an example, is coming very, very close
01:12:30 to the actionable of pivot areas
01:12:32 as we look at the canceling in markets with India.
01:12:35 I think two, three factors.
01:12:35 One, I think the dedicated race corridor,
01:12:38 the freight corridor is going to get completed
01:12:40 in the next few quarters.
01:12:42 And as that happens, the real infrastructure players,
01:12:45 like the gateway district park,
01:12:47 who has an expertise as far as the dedicated
01:12:49 base corridor is concerned,
01:12:50 freight corridor is concerned,
01:12:52 I think the five ICDs, the five CFSs
01:12:55 that they've got on the Eastern coast
01:12:57 should clearly affect in terms of strong volume growth.
01:13:00 They've got strong asset needs as well.
01:13:03 So I think 31 breaks, adding much more
01:13:06 as more capacities come in.
01:13:09 Relatively better balance sheet.
01:13:10 They've also got a subsidiary through snow and logistics,
01:13:13 which is into cold storage, expected to do well as well.
01:13:17 So being a little bit more selective here,
01:13:19 all cargo can do well,
01:13:20 but have a look out for gateway district parks.
01:13:23 Gateway district parks over all cargo
01:13:25 is Mayurish's pick in the logistics space.
01:13:27 Chandan, very quickly, all cargo and gateway as well,
01:13:31 while Mayurish brought that in.
01:13:33 - So when I talk about all cargo,
01:13:34 a couple of days back,
01:13:35 we recommended this counter at really, really well,
01:13:37 but post the winners, we suggested to edit the position
01:13:40 and now I'll wait to buy near 78 zone.
01:13:45 When you talk about gateway district,
01:13:47 then I think some sort of consultative move could be there.
01:13:51 One can buy with support of 107 for an upside target
01:13:54 to us, 117 levels.
01:13:55 - Okay, so 33 seconds left
01:14:01 for the markets to kickstart trade.
01:14:04 Is my throat sounding off?
01:14:05 In which case, Tamanna,
01:14:07 maybe you come in and do the market open.
01:14:09 - It's only if you're okay, Neeraj.
01:14:12 - Okay, let me try.
01:14:13 But 18 seconds left.
01:14:16 Tamanna, maybe you do this today.
01:14:18 - If you accompany her on the wall, you stay with us.
01:14:20 We're looking at a possibly weak start today
01:14:23 on markets after the run up yesterday.
01:14:26 And that's what the pre-open definitely indicated, Neeraj.
01:14:30 As far as the pre-open rates are concerned,
01:14:31 banks seem to be the culprit for a second day in a row,
01:14:34 but we'll pull up the heat map in a few seconds
01:14:36 and see that.
01:14:37 And look at that.
01:14:37 I would say a mildly weak start,
01:14:39 nothing too worrying to write home about.
01:14:42 Remember, it is your Bank Nifty expiry day as well.
01:14:45 So I want to see what the Bank Nifty is doing.
01:14:47 And yeah, definitely a bit more pressure over there
01:14:51 as we see the opening.
01:14:52 Tepid at best, nothing massively happening
01:14:57 in the mid-cap 150 or the broader indices overall.
01:15:01 One presumes ahead of a heavy news flow kind of a week,
01:15:06 end of the week, Thursday and Friday are going to be big days
01:15:09 all your big four tech companies are going to fire.
01:15:12 And you're seeing that working out.
01:15:13 Look at HCL Tech right on top of the charts.
01:15:16 You know, the tech pack,
01:15:17 I would say Neeraj has been a complete, you know, confused.
01:15:20 Yeah, but it's confusing cues
01:15:22 because your previews say they're going to have a tough time
01:15:24 but they've been outperforming.
01:15:26 At the bottom is your entire oil pack.
01:15:27 You want to come in?
01:15:28 No, just that one piece that does the market
01:15:32 know more than all of us when it comes to the IT companies.
01:15:35 That's the question.
01:15:35 Absolutely.
01:15:36 And that looks like it HCL Tech, Wipro,
01:15:41 all of them doing fairly well.
01:15:42 MNAP up to in that green list.
01:15:45 And if you watched our trade set up this morning,
01:15:47 you would know why.
01:15:49 Their tie up for ADAS services software has come into play.
01:15:54 But at the bottom of the pack,
01:15:56 I would say largely you're seeing BPCL and ONGC.
01:16:00 ONGC is seeing that pain point coming in.
01:16:02 BPCL also down nearly 2%.
01:16:05 Yeah.
01:16:06 And Tamanna HDFC Bank yesterday's culprit
01:16:08 down another half a percent.
01:16:09 The entire banking pack.
01:16:10 Look at Axis, SBI, ICICI Bank,
01:16:14 all of them seeing those pain points.
01:16:16 Even Britannia continuing with that.
01:16:19 So overall, you're seeing a tepid, very, very flat start.
01:16:24 Look at the indices, completely sapat as they say in Hindi.
01:16:29 Yeah, just bring up the mid cap and the small cap indices
01:16:32 before Tamanna highlights individual names.
01:16:34 But let's see how they have started.
01:16:36 A flat for the mid caps,
01:16:38 and very likely the same for the small cap as well.
01:16:41 Yeah.
01:16:41 So nothing to write home about.
01:16:42 Nothing majorly to write home about.
01:16:44 The story seems to be stock specific
01:16:46 and just pull up a few of the counters
01:16:48 that we have been tracking through the morning
01:16:51 and look at what's happening there.
01:16:52 I'm going to start with Polycap,
01:16:53 something that Samina highlighted
01:16:55 in the Stocks to Watch list as well.
01:16:57 Look at that rebound.
01:16:58 So they put out notice yesterday saying that the reports
01:17:03 of a 200 crore rupee tax evasion are false.
01:17:06 That stock rebounding 3%.
01:17:08 Zee, another one on the list
01:17:10 that we're tracking this morning,
01:17:12 that stock also rebounding.
01:17:13 So you're seeing that counters
01:17:15 that were beaten down yesterday
01:17:16 are seeing some bit of a rebound.
01:17:18 That's talked about 2% up.
01:17:21 Delta is another one that we're tracking this morning.
01:17:23 Q3 numbers were poor.
01:17:25 That was expected.
01:17:26 Other revenues hit because, you know,
01:17:28 who wants to pay a 28% tax for gaming
01:17:31 or you know, those kinds of speculative games.
01:17:34 And that's talked down about 4%.
01:17:36 We should look at Nazara also at some point
01:17:38 and see what's happening there
01:17:39 because that pain is going to continue to plague the space.
01:17:42 Policy wise, it's a very clear direction
01:17:45 that we don't want to give tax breaks
01:17:47 for this kind of a business.
01:17:49 We don't want to encourage it.
01:17:50 So there's a moral suasion sort of overhang there.
01:17:53 Lupin is another one.
01:17:55 They have a US FDA approval.
01:17:57 Yeah, Nazara's been okay.
01:17:58 Lupin has a US FDA approval.
01:18:00 Not too much of a move in a sort of a muted market,
01:18:04 but up about 1%, not bad.
01:18:06 They've got an exclusive contract or exclusivity
01:18:10 to sell post-cataract eye drops
01:18:13 and that's doing okay.
01:18:15 Paytm is just another one.
01:18:17 That news coming in just, I think, 15, 20 minutes
01:18:20 before open and they're going to be investing
01:18:22 about a hundred crore rupees in Gift City.
01:18:25 They're going to offer AI driven cross border remittances.
01:18:30 Now Vibrant Gujarat is going to kick off today
01:18:32 and you will see a lot of deals being signed and announced.
01:18:36 We have seen the spike up in those companies
01:18:39 in the recent days when it came to the Tamil Nadu
01:18:42 government's MOUs as well.
01:18:43 So that's one to watch out for in today's trade.
01:18:46 But in this sort of muted kind of a day, Samina,
01:18:50 are you seeing anything popping or doing too badly?
01:18:53 No, I think Delta Corp is taking the cake this morning,
01:18:56 but surprisingly it's trident.
01:18:58 Profit taking is what we are seeing on the stock.
01:19:01 It's been on a tear for the last few days of trade.
01:19:04 Today, I think some profits being taken off the table.
01:19:07 The stock is down about 3.5%.
01:19:10 JBM Auto, again, your top gainer from yesterday's trade
01:19:13 is seeing profit taking 2.5% off on JBM.
01:19:16 Upstream companies, ONGC, I see ONGC looking weak, down 2%.
01:19:22 In fact, the whole oil and gas pack is looking bad.
01:19:24 From your upstream to the downstream names,
01:19:26 all of them under pressure in today's day of trade.
01:19:29 Well, you've also got Ease My Trip Planners
01:19:32 that's down a percent and a half.
01:19:34 Real Estate, so top gainers from yesterday,
01:19:36 again, selling off just a little bit, 1.5% to 2% lower
01:19:40 on some of your realty names is what we have this morning.
01:19:42 So, Oberoi, DLF, Phoenix Mills are all trading
01:19:45 with a negative bias.
01:19:47 On the gaining side, the day belongs to Cochin Shipyard,
01:19:50 9% high on that one.
01:19:52 Nalco is up 3.5%.
01:19:54 Shale Hotels is up 3.5%.
01:19:56 I'm not sure whether they've got a presence in Ayodhya,
01:19:58 or for all you know in Gift City,
01:20:00 that these stocks are doing well.
01:20:01 But Shale is seeing some uptick, up 3.5% in trade.
01:20:05 Polycab, after reconfirming that there was nothing
01:20:09 from the tax authorities, and those are just rumors,
01:20:11 sees a little bit of relief buying 2.5% higher on that one.
01:20:15 Network 18 is seeing a little bit of a bounce back.
01:20:18 Z Entertainment is up 200%.
01:20:21 Brigit is looking okay.
01:20:22 But all in all, there is no trend
01:20:24 that we are picking up on this morning.
01:20:26 Remember, Bank Nifty has been a weak spot for the markets,
01:20:30 may continue to play spoilsport today.
01:20:31 And if that happens, we might actually close the day
01:20:34 and see a similar intraday picture where we open higher,
01:20:37 spend some time trading in higher grounds,
01:20:40 and towards closing bell, actually decline in trade.
01:20:43 And I think the onus, Neeraj Samanna, will be on Bank Nifty.
01:20:47 Just a couple of stocks if I could add,
01:20:49 and those on our list as well, Vedanta.
01:20:52 Let's look at Vedanta.
01:20:53 The Moody is down great, and that's hitting the counter
01:20:58 definitely this morning in trade, down about 2%,
01:21:01 to 2.5%.
01:21:02 Since we've been talking about tourism and the tourism flow,
01:21:05 that was part of Editor's Cut as well.
01:21:07 Look at SpiceJet this morning.
01:21:09 SpiceJet, of course, Pravek,
01:21:10 that Neeraj highlighted, Lemon Tree,
01:21:13 all of them doing fairly well.
01:21:16 I don't know what's happening with that stock up,
01:21:18 about another 5%.
01:21:20 Neeraj, don't talk, but I can see from your expression.
01:21:22 - No, this is sheer madness right now.
01:21:25 75% in a month.
01:21:27 What's happening? - Is there any other company
01:21:28 that makes 10s that is listed?
01:21:30 That's what we have to check.
01:21:31 - Yeah, maybe Scarcity Premium, yeah.
01:21:33 So that's the point.
01:21:34 Lemon Tree also up, as I was saying.
01:21:37 So those some on the watch list that are doing fairly well,
01:21:40 but while SpiceJet is up, look at Interglobe,
01:21:42 down about 1%.
01:21:44 The aviation space, though we don't have any of those
01:21:46 737 MAX 9 dangerous type of Boeings here, not too many.
01:21:50 There are 40 and the DGCS is 39, are fine,
01:21:53 but I would watch the aviation space for a few days,
01:21:57 definitely.
01:21:59 Mayuresh and Chandan still with us.
01:22:00 Mayuresh, Chandan, let's take a quick first views
01:22:03 on where the market is.
01:22:04 Chandan, I'll start with you.
01:22:06 The Nifty really is struggling this morning
01:22:09 to hold on to gain.
01:22:10 So 21,500 seems to be a level that has been respected.
01:22:13 We're a little over that.
01:22:16 What is the direction that you see taking forward
01:22:19 and on the bank Nifty as well,
01:22:20 which is showing more weakness on expiry day?
01:22:23 - Yeah, so I'll talk about indices
01:22:25 and then selective stocks,
01:22:26 which can really generate alpha in this market.
01:22:28 So looking at Nifty, we'll go with a slightly
01:22:31 sell-on-bounce stance with the view that it can break 21,500
01:22:35 and can drift to us 21,400 zone.
01:22:37 So sell-on-bounce will apply with hurdle at 21,680
01:22:40 and downside at 21,400 zone.
01:22:43 One can even trade with 21,550 or 21,600
01:22:47 put to play some downside.
01:22:49 Talking about bank Nifty index,
01:22:51 here also some sort of profit booking
01:22:54 could be seen as holding well below previous day E level.
01:22:58 So utilize any bounce, be with sell-on-bounce stance.
01:23:02 47,500 will be hurdle for the downside move to us 46,750.
01:23:07 Talking about the stocks,
01:23:08 positive on the selective hotels name,
01:23:10 Sele Hotels, one of the strongest name we like.
01:23:13 One can buy with support of 750,
01:23:15 it can head to us 800 zone.
01:23:17 We are positive on the selective shipping name,
01:23:19 whether you talk about Masgaon Dog and Cochin Shipyards.
01:23:22 So these are the couple of names one need to keep in mind.
01:23:25 And hotels and shipping team will continue
01:23:28 to see some sort of bullishness in the market
01:23:30 for next couple of days.
01:23:31 - Mayuresh, two stocks very lastly,
01:23:35 it's Reliance Industries and HDFC.
01:23:39 - So Reliance, I mean,
01:23:42 I should do well structurally over the next few quarters.
01:23:47 Obviously the expectations in terms of the core business,
01:23:50 the retail business also expected to do equally well.
01:23:54 So Jio along with Reliance Retail,
01:23:57 which is almost 50% of EBIT,
01:23:59 can continue that good show in the next few quarters.
01:24:02 As far as the core oil and gas business
01:24:04 to Petcam business is concerned,
01:24:06 the expectations in terms of different peak stock options
01:24:09 that Reliance probably possesses
01:24:11 will probably lead to better refining margins as we speak.
01:24:15 And therefore the kind of calibrated capex
01:24:17 that is going into new energies,
01:24:19 both biofuels as well as hydrogen,
01:24:23 is expected to be in a calibrated manner,
01:24:25 not creating too much stress from an immediate perspective,
01:24:28 from a balance sheet perspective as well.
01:24:31 So to that extent,
01:24:33 Reliance structurally looks very, very good
01:24:35 over the next few quarters.
01:24:37 It's obviously going to be one of the other proxies
01:24:40 apart from L&T,
01:24:41 on how the entire energy transition
01:24:43 stock retail team is going to play out.
01:24:45 For HDFC, I think obviously the expectations is HDFC Bank,
01:24:51 which probably now has the HDFC book as well,
01:24:55 has struggled along with ICICI Bank.
01:24:57 I think the returns have hardly been anything
01:24:59 to write home about over the past one year.
01:25:01 But the last part of the expectation is the valuation payoff
01:25:05 obviously in favor of the bank at this juncture.
01:25:08 The base that they are operating out of,
01:25:10 the kind of numbers that one really expects
01:25:12 in terms of advances, deposit,
01:25:14 and the overall business growth
01:25:15 should be very reasonable.
01:25:17 Asset quality pressures
01:25:19 have obviously been kept under control,
01:25:20 which is a huge, huge sign,
01:25:22 even with the size that they're operating out of.
01:25:24 And the cost and revenue synergies
01:25:26 with the mortgage book of HDFC getting added in,
01:25:28 will probably add to more depreciation
01:25:30 as far as products are concerned.
01:25:32 So yeah, I think it has been in the performance,
01:25:34 but at some stage in '24,
01:25:36 I think the stock should show some element of strength
01:25:39 as we head into the next few quarters.
01:25:41 - Thank you.
01:25:42 Thank you, Mayuresh.
01:25:43 Thank you, Chandan.
01:25:44 Great having both of you on the show.
01:25:45 The markets are subdued,
01:25:46 marginally lower at least in early minutes of trade.
01:25:49 But we are getting into busy season,
01:25:51 which is earnings season.
01:25:52 Nirav Sheth, CEO, Institution Equities
01:25:54 at MK Global Financial Services now joins us.
01:25:57 Morning, Nirav.
01:25:58 Thanks a ton for joining in.
01:26:00 Nirav, first up,
01:26:01 what is your reading of the provisional numbers of India Inc.
01:26:05 ahead of the December quarter earnings?
01:26:07 - So I think if you look at the first half,
01:26:10 the earnings for the large cap is up close to about 30%.
01:26:14 If I look at the mid caps in aggregate,
01:26:16 they're up about 18, 19%,
01:26:18 and small caps are also closing the region
01:26:20 of about 18 to 20%.
01:26:24 If you look at a longer timeframe,
01:26:26 post pandemic, the earnings are up more than 100%.
01:26:30 So this is a very, very powerful journey of earnings.
01:26:34 And we are nowhere near the peak of profit to GDP ratios.
01:26:39 I'm fairly optimistic.
01:26:41 I think that we can look to a mid-ting earnings growth rate
01:26:44 in India Inc. for a longish period of time.
01:26:48 I have never seen such a setup at macro levels
01:26:51 in terms of your care, in terms of inflation outlook,
01:26:53 in terms of the business confidence index,
01:26:56 and what we are seeing in terms of infra build out.
01:27:00 Yeah, so, you know, fairly optimistic.
01:27:03 - I think that's a good word to take a cue from.
01:27:08 Nirav, I wanna start by one space
01:27:09 that's not been too optimistic,
01:27:11 it is in terms of business updates,
01:27:12 and that was the rural economy.
01:27:15 Do you think that's gaining momentum?
01:27:17 Because early signs not yet showing substantial recovery.
01:27:22 - So I, you know, you're right.
01:27:26 If you look at the rural wages,
01:27:28 the real rural wages, they've lagged,
01:27:31 you know, they're just close to all nil.
01:27:35 They're just kicking off the pace with the inflation and all.
01:27:39 But if you look at the anecdotal evidence,
01:27:41 if you look at two wheelers, for example,
01:27:43 they'll come back very smartly and understand
01:27:45 that last part of that demand is happening,
01:27:48 coming from the rural.
01:27:49 You obviously had some amount of mix up that has happened
01:27:53 because of the pandemic and the reverse migration
01:27:55 that you've seen in the rural area.
01:27:58 I suspect that the momentum that we're seeing
01:28:03 in the economy is so strong
01:28:04 that it's going to leave even rural economy.
01:28:06 As a matter of fact, the theme going forward,
01:28:08 I would like to believe would be,
01:28:09 will essentially hinge around two things.
01:28:11 It will hinge on the fact that we'll have
01:28:12 very, very strong corporate connect cycle
01:28:14 that will pick up very soon.
01:28:16 I'm talking about one or two quarters down the line.
01:28:18 And secondly, you will see a more even balance
01:28:21 between urban and rural consumption.
01:28:22 As a matter of fact, I think there was an article yesterday
01:28:24 or research paper yesterday
01:28:25 by the research department of SBI
01:28:30 and they have got access to large amount of data points,
01:28:33 which sort of debunks the myth about a K-Shape recovery.
01:28:36 I tend to believe in it,
01:28:37 but I don't have too much of evidence outside
01:28:40 what we see anecdotally.
01:28:43 - Right, Nirav, hi, Manna here.
01:28:44 Great to speak with you on India Market Open.
01:28:48 And I just wanted your take ahead of Q3.
01:28:52 I mean, that's the big trigger right now,
01:28:54 all things being equal.
01:28:56 We know Indian economy on an upward trajectory,
01:28:59 relatively looking well, strength, et cetera, et cetera.
01:29:02 But the question is how companies are going to deliver
01:29:06 on everything they promised.
01:29:07 A lot of sectors saw management come and tell us
01:29:10 that H2 is going to be better
01:29:12 and Q3 is going to be much better and fabulous.
01:29:17 What are the sectors and companies
01:29:19 that you have your eye on, Nirav?
01:29:21 - So I think what stands out very clearly
01:29:24 as far as the delta,
01:29:26 let's, if you look at the delta,
01:29:27 then you are going to see a significant amount of delta
01:29:30 that happens in the cement sector.
01:29:31 And a lot of this is based on comparison
01:29:33 and the fact that you've seen a price correction in energy
01:29:36 and coal and stuff like that.
01:29:39 So the commodity market as a whole
01:29:41 will obviously be favorable to the importers of commodities.
01:29:46 I believe that the earnings blowout in banks will continue.
01:29:52 I think there are a lot of misconceptions
01:29:55 around the impact on the news because of the eight cut cycle
01:29:59 or people are unduly worried about
01:30:01 the pace of deposit growth rate.
01:30:04 We'll take it forward if time permits.
01:30:07 Banks will stand out, cement will stand out.
01:30:09 Outside commodities and outside consumer companies
01:30:13 which are largely rural facing,
01:30:16 I would expect that we'll have
01:30:19 decent amount of earnings growth that happening.
01:30:21 - In terms of sectors, Nirav,
01:30:25 IT, a mixed sort of an outlook.
01:30:28 You know, the outlook is gloomy,
01:30:30 but the street seems to think that there is an upside there.
01:30:33 And you spoke briefly about banks,
01:30:35 but just a little more detail on the financial space
01:30:38 and what looks promising there.
01:30:41 - So I'll tell you, if I come to software,
01:30:44 I agree that we are looking at a subdued quarter
01:30:48 and maybe even a subdued Q4.
01:30:51 It doesn't matter because I've always believed
01:30:54 and I've been vocal about this,
01:30:56 is that you need to be slightly more macro conscious
01:30:59 about when you take calls on software sector.
01:31:02 We have seen how the US market is very, very resilient.
01:31:06 You just look at the Bureau numbers
01:31:07 that came out on Friday, right?
01:31:08 So even the bond is over there,
01:31:11 are sort of playing a bull and a bear dance
01:31:13 between how strong the US economy is and is not.
01:31:16 A lot of the spending in tech is discretionary,
01:31:20 which means that once you get confident
01:31:22 that Fed is behind the cycle,
01:31:23 you are going to see a lot of catch up
01:31:25 in tech spending that will happen.
01:31:26 So it's important that you look out
01:31:28 in terms of what happens in FY25
01:31:29 rather than what happens in Q4.
01:31:31 This is as far as stock prices are concerned in software.
01:31:34 In banks, I think broadly,
01:31:37 I can't pull out any one particular bank.
01:31:40 Almost all of them are growing their credit
01:31:42 at about between 16 to 18%.
01:31:44 Private sector banks are growing a tad faster.
01:31:47 Absolutely zero concerns around asset quality.
01:31:50 Even the SDFC merger into SDFC bank has been absorbed.
01:31:56 They are high on liquidity coverage ratio
01:32:00 and therefore I don't think you're going to see
01:32:02 any disappointments on earnings.
01:32:04 You could have one-off companies here and there.
01:32:07 I'll be surprised if you can catch a trend out of that
01:32:10 and say that my expectations are this
01:32:12 and the sector has disappointed.
01:32:15 Please appreciate, we are still upgrading our GD estimates
01:32:20 for this year as well as for next year.
01:32:22 That happens because there is business momentum.
01:32:25 And business momentum, when it continues,
01:32:28 it continues for a while.
01:32:29 You need an exogenous shock to try and reverse that trend.
01:32:32 - Absolutely.
01:32:35 We'll continue this fantastic conversation
01:32:38 with Nirav, Q3 expectations and a lot more
01:32:42 after a very, very short break.
01:32:43 Stay tuned.
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