- 3 years ago
Dhan's Jay Prakash Gupta shares insights on #RelianceIndustries, #HDFCBank, #Infosys, and other stocks to watch in trade today. #BQLive
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00:00 Hello and welcome to BQ Promo. Very good morning to all the viewers. I am Heeral Dadia. Clearly,
00:05 if you see the kind of up move that we saw in yesterday's session, slowly, steadily,
00:09 we are seeing a recovery that's coming in at this hour as well. From the negative, we
00:13 just managed to turn slightly positive as we speak. We're trading a little above the
00:18 19,800 level. The advance to client ratio is still skewed in favor of the bears. But
00:24 whether we see that buying coming in in the last hour of trade like we saw in yesterday's
00:28 session is going to be interesting to watch out for. A lot of movers and shakers in trade
00:33 today, but let's just quickly look at Bank Nifty as well, because participation from
00:36 Bank Nifty as well as the IT index is going to be absolutely crucial for us to scale to
00:42 newer heights. In fact, the key question that everyone is watching out for answers to is
00:47 when will Nifty 50 hit the 20,000 milestone? That's going to be crucial, how many trading
00:52 sessions it will take as well. But that's something which we'll have to keep watching
00:56 out for. Let's first welcome in Jay Prakash Gupta, founder at Dhan. Jay, good morning
01:02 and welcome to the show.
01:04 Yeah, hi, Hedal, good morning.
01:06 Jay, let's start with a couple of key names. First is Reliance Industries. We've already
01:11 seen the price discovery that has happened on the back of the merger for Reliance Industries
01:16 as well as Reliance, you know, the geo financial services. Firstly, what is your view on RIL
01:23 now at current levels? And secondly, with regards to the price discovery that has happened
01:27 for the financial services arm, what would you advise?
01:31 Well, Hedal, Reliance is the most talked about stock for today. We have been keenly watching
01:39 the developments here, but the pricing which has settled, you know, I believe it's a value
01:45 unlocking for the investors of Reliance. There is tremendous scope, the way Reliance has
01:50 transformed itself from a petrochemical giant to a new age business and also getting into
01:55 financial services. The whole idea is that they want to have this arm's length distance
02:00 from a lot of companies which the group has. For financial services business, I think Reliance
02:08 is one of the late entrants here and the whole ecosystem of lending business has changed
02:13 in India over the last few years. The question of NPAs, the question of lending to retail
02:22 investors, the security for lending companies has gone up because of a lot of regulations
02:28 and with a kind of reach, with a kind of their own subsidiary companies which has got a huge
02:34 client base with a retail footfall. I think the company is just born not only with 1.5
02:39 lakh crore of net worth, but also a wider business which would eventually translate
02:45 and will help Reliance shareholders in coming times. So I think there's nothing wrong with
02:51 Reliance, rather it looks a very attractive opportunity with the kind of diversification
02:56 they are doing. For investors, my advice would be just be with Reliance and there's a lot
03:04 of value unlocking which lies ahead in the future.
03:13 Moving on, you have HDFC Bank also that is in focus and this is post the merger. Now
03:19 taking the way the stock has moved after the listing that happened, after the merged entity
03:25 started trading on the 17th, at current levels what would you advise investors to do with
03:29 the HDFC Bank, Jay? Well, here you will see the numbers were really encouraging. We have
03:36 seen the consistency from HDFC for years now and with 30% growth, 20% plus back, I think
03:44 it all speaks about the management and the quality of the company. I think they have
03:51 a very bright prospect, I don't see anything wrong there. For investors, I think continue
03:57 holding, it's a great story and the way, as I was telling in the financial service space,
04:02 in the banking space, the whole risk of lending has gone down drastically because of various
04:09 provisions. Today, a borrower is more concerned while he takes a loan that whether he will
04:15 be able to repay or not. That also adds a lot of positivity on the banking and NBFC
04:23 space and with the kind of book size they have and the quality of book, I don't see
04:29 any issue coming and IT and banking are going to be the sectors which would lead from the
04:34 front as we are also going to witness 20,000 soon. I think there is nothing wrong, one
04:42 should continue holding the stock. Right. Moving on, Hatson Agro reported numbers and
04:47 a strong up move coming in on the margin profile. The stock is also seeing double digit gains
04:51 in today's session. Would you advise investors to book profits, the ones who are holding
04:56 it or not? And secondly, someone who is looking to enter a company like Hatson Agro, is it
05:03 still a good number to enter? Well, I don't track. Yes, I missed that you don't track
05:11 Hatson Agro. Right. I think we'll go to the next one. You have a Bajaj Hindustan, which
05:16 is seeing some moves in today's session. What's your view on the sugar pack? We are seeing
05:23 a positive move across sugar pack. I think primarily due to the reason that there is
05:29 likely to be a fall in yield because of unseasonal rains and higher rainfall. And there is also
05:34 an ethanol blend story, which is also adding to the momentum. I think that this is a momentum
05:41 play and looks like that all the sugar pack stocks would do well and Bajaj Hindustan is
05:47 also one of them, expecting around 15-20% or more upside across the sector from here
05:53 on. Right. Moving on, you have a Dr. Reddy's. Now, because of no observations at their Sri
06:01 Kalkulam plant, the stock is seeing some smart moves in today's session. What's your view
06:06 on the Dr. Reddy's? Right here also, the immediate momentum with the stock has it has
06:14 hit 52 week high is because of no observation, which was recently, the inspection was conducted.
06:22 Apart from that, there are also a couple of positive news. The company has signed an agreement
06:28 to buy 26% stake in SPV called Go2 Renewable Energy. That news came last week. Apart from
06:37 that, their numbers, sales numbers have grown. The strong performance in the US market is
06:44 also helping the company. They acquired a new company called Main Pharma. And, you know,
06:50 we are seeing a better traction in certain generic drugs like Suboxone and Revlimid.
06:56 So overall, PharmaPak looks attractive. And for Dr. Reddy's, I believe, you know, the
07:04 coming quarters are also likely to be good, a good stock to be in. Right. Moving on, Infosys
07:11 is expected to report numbers in today's session. What's your key takeaway that you would be
07:16 watching out for? And what would you advise investors to do on Infosys? Well, Hiral, see,
07:24 we have seen that Infosys, ITPak has been a laggard, you know, in this entire rally,
07:29 the stocks, most of the IT stocks did not perform. But we are seeing some kind of positivity
07:33 coming in the last 15 odd days. We have seen large names giving around 10 to 12% of returns
07:40 in a month's time. For Infosys, the $2 billion deal which they have signed for AI business,
07:47 that's a positive. And we have seen almost 10% plus rise in the stocks in the last one
07:52 month. And the result would be crucial because it's coming at a time when there's a lot of
07:57 pessimism in the Western world about their guidance about how the new business is going
08:03 to be. Apart from that, most of the large IT names have not given salary hikes, you
08:09 know, so that also, to some extent, helps the company because they will be able to curtail
08:14 costs there. But it's very important to hear what the management has to say for the coming
08:20 quarters. But overall, I believe, IT as a sector has a lot of potential, it's just a
08:27 negative phase which the whole sector is passing through. For companies like Infosys, there's
08:33 no question of corporate governance, they have got enough of cash reserves, the cash
08:38 flow is positive. The sector is for India, I think the tech dividend is something which
08:47 the whole world admires and companies like Infosys, TCS and HCL techs and be pros of
08:52 the world would obviously be the beneficiary of the kind of financial muscle they have.
08:59 I think the sector is looking good for the long term. For the short term, it's important
09:05 that you hear out what the management has to say to decide what would be your entry
09:10 level in the stock.
09:12 Right. Another one that will be reporting earnings is HUL. What's your expectation
09:16 in today's session?
09:17 Well, you'll see for the last quarter, I believe, you know, the inflation has cooled down in
09:26 India. Okay, that would obviously help the margins. Also, the sales number is expected
09:31 to do well. I think the number should be positive. I have good expectations from HUL. And let's
09:40 see what the management has to declare.
09:43 Okay, moving on in terms of other names, Krishna Diagnostics is trading under pressure. And
09:48 this is on the back of the loss in contract and business in the state of Rajasthan. How
09:53 are you looking at Krishna Diagnostics? And what would you advise investors to do? Is
09:57 it a good opportunity to buy with the kind of correction that we're seeing in today's
10:01 session? Or how are you seeing the prospects?
10:04 See for Krishna Diagnostic, I believe, you know, the company works on a very unique model,
10:12 which is a PPP kind of model. On a diagnostic business, there's a lot of competition post
10:17 COVID. The sales numbers have dipped. Okay, but for them, the advantage is that 50% and
10:25 more business comes from a radiology. And while you do business through a PPP model,
10:31 you have a pricing which is already fixed. And that helps a company you know, in maintaining
10:36 some kind of margin. So I don't see anything wrong in the stock as of now. Maybe I think,
10:45 you know, in this current fall, this is not going to impact their existing business. I
10:51 think one should look into the stock because the numbers are good. And the kind of business
10:56 they have radiology business has got higher margins. And that contributes to almost 50%
11:01 of the company's turnover as I already said that. So I don't see any harm in this stock.
11:07 This correction can be looked at as a buying opportunity.
11:10 Right. Another one which has been trading under pressure Jay is transformers and rectifiers.
11:15 As the client has slapped a three year ban for alleged forgery with regards to the clearance
11:21 certificate. What does what would this mean from a company perspective? And what would
11:26 you advise someone who's holding a transformers and rectifiers to do?
11:30 Well, here in today's time, you know, a question on the integrity and on the governance is
11:38 really a serious issue. And if certain sub, you know, a vendor has put and that to an
11:46 entity which is Gujarat Energy Transmission Corporation, you know, there is something
11:51 to be seriously looked into. I believe for any investor, the times we are in a company
11:57 which were the question on governance, where the question on you know, forging and cheating
12:03 kind of thing comes, I think the investors should a long term investor should stay away
12:07 from these stocks. So I won't have any positive thing to say about the stock as of now. Maybe
12:14 we can hear what the management clarification has to say till that point of time, I think
12:20 the company should be avoided.
12:22 Right. And the last one I want to talk to you about a PNC Infra, which is seeing some
12:26 smart moves as they've executed concession agreements for three new ham projects. And
12:31 this is with NHAI. Infrastructure has been in focus as well. What's your view on a PNC
12:37 Infra?
12:38 Well, it looks like, you know, a momentum play, because they have got contracts, contracts
12:47 of a substantial size, 3,264 odd crores. The stock is showing positive signs because of
12:54 that. But again, on the whole infrastructure space, there are other players also and the
12:59 company really has to ensure that these kind of water flows also come in the future. For
13:04 a momentum play, it looks good for a long term view. I have my reservations on the stock.
13:10 Right. So that's with regards to PNC Infra. Thank you, Jai, so much for joining us on
13:14 the show and giving us those views in terms of stocks that we've already discussed. But
13:19 clearly, if you see in terms of markets, as of now, it's a pretty sombre day of trade.
13:24 But what happens in the last hour is going to be interesting because it is weekly expiry
13:28 as well. You still have, you know, the Sensex, which is maintaining to stay above those 67,000
13:33 levels. And it's mainly ITC, Sun Pharma, Reliance Industries and the IndusInd Bank, which is
13:39 on the positive side of it. In fact, from a contribution perspective also, if you go
13:44 to see, you know, it's mainly Reliance as well as Infosys coming in there. Overall,
13:51 if you see in terms of other stocks, specific action, let's just quickly look at the broader
13:55 markets also and see what the names are looking like. Nugen is up around 12.5%. Bajaj Hindustan
14:00 is seeing some smart gains. Hatsan Agro on the back of earnings is up 7, 7.5%. Cieta
14:05 started the upward journey once again in today's session. On the losing end, a 6 to 7% downtick
14:12 coming in in terms of ABB. And that's going to be an interesting one to watch out for
14:17 as well. In fact, ABB Global has said that 7% growth is what they're looking at in terms
14:22 of order inflows for India business in the April to June 2023 quarter. And that's something
14:28 which is actually putting that pressure in terms of where ABB is concerned in today's
14:34 session. So, again, a lot of stock specific action is what we're witnessing in trade as
14:38 we speak. But whether a pickup happens in the last hour of trade on the back of expiry
14:43 is something we need to wait and watch. And a lot of action that could be lined up in
14:48 terms of July expiry itself. That's all that we have on this session. Thanks for watching.
14:52 And lots more lined up on the other side. Please stay tuned to BQ Prime.
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