- 2 years ago
Global news flow & cues
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Nira
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Nira
Category
📺
TVTranscript
00:00:00 (upbeat music)
00:00:02 - Hello and welcome to India Market Open.
00:00:05 It's bright and early on Monday morning, guys.
00:00:07 No big events except earnings.
00:00:09 I guess this is the last leg of the earnings season.
00:00:11 There'll be lots of reactions
00:00:12 and lots of managements we'll be talking to.
00:00:14 - Yeah, I think the global cues, though,
00:00:15 are one to watch out for,
00:00:17 and that's reflecting perhaps in the implied open.
00:00:20 - Yeah, but frankly, we can do with a bit of a quiet, right?
00:00:23 (laughing)
00:00:23 I mean, the season, budget, policy,
00:00:26 I think we need a break.
00:00:27 So I'm happy that this earnings season
00:00:28 is coming to an end this week.
00:00:30 - Elections are coming.
00:00:31 - Yeah, but that's some time away, Tamanna.
00:00:32 Give us a chance to breathe.
00:00:33 Give us a chance to breathe.
00:00:34 - Then the full budget in July.
00:00:36 - Give us a chance to breathe.
00:00:38 - We have two months at least.
00:00:39 At least two months.
00:00:40 Let's enjoy the moment.
00:00:43 All right, so, well, we may have, you know,
00:00:46 the wish of a quiet day today,
00:00:48 but it's unlikely to happen
00:00:50 because if you look at your implied open,
00:00:51 you're looking like you're off to a positive start today
00:00:56 and where that's perhaps coming from.
00:00:58 One of the factors is a very positive outlook
00:01:01 as far as the US is concerned
00:01:03 in terms of the economy and blockbuster results.
00:01:06 Pretty much 80% of your S&P 500 listed companies
00:01:10 have beaten estimates.
00:01:11 It's a tech rally also, which has boosted Wall Street,
00:01:14 pull up the NASDAQ as well,
00:01:15 was up a cent and a half on Friday.
00:01:18 The S&P 500 closed above the 5,000 mark for the first time.
00:01:23 And one of the things that has really, you know,
00:01:27 lent itself to those positive cues
00:01:29 is the downward revision of the December CPI data,
00:01:33 which was 0.3%.
00:01:35 Then the government comes and says,
00:01:36 "No, no, it's actually 0.2%."
00:01:39 So you're seeing inflation in that sense trend downwards,
00:01:42 and that's what boosted tech stocks as well.
00:01:44 The 10-year was flat as a result.
00:01:47 Crude is one to watch out for.
00:01:49 Crude has slid back after rising over the weekend,
00:01:53 but, you know, the tensions,
00:01:56 the underlying tensions which are hitting crude prices
00:01:58 definitely continue.
00:02:00 The latest peace proposal by Hamas has been rejected.
00:02:03 Israel is on with its entire operation in Gaza.
00:02:08 So that's concerning.
00:02:10 Asia is quiet for sure.
00:02:11 China's going to be shut the whole week.
00:02:13 A lot of Asian markets are closed,
00:02:16 but we can pull up the Nikkei.
00:02:17 Japan is open and perhaps some trends from there.
00:02:20 Japan and Australia pretty much all
00:02:23 that's showing some action in Asia.
00:02:25 I'll quickly take you through the fund flows on Friday
00:02:27 before I hand back to Neeraj and, you know,
00:02:31 what we saw over there.
00:02:32 Remember, it was not too much in terms of volumes on Friday
00:02:37 and FBIs were buyers there.
00:02:38 142 crores is what they bought.
00:02:41 India sold for 22 crores.
00:02:44 The big volumes though have not come out yet.
00:02:48 Markets are looking for the next Q, Neeraj.
00:02:50 Yes.
00:02:51 Well, you know, just before we get to trade setup,
00:02:53 I think the big thing that also came out
00:02:55 and everybody's talking about the India valuation,
00:02:57 the Morgan Stanley note on India is very strong, right?
00:03:00 I mean, Jonathan Garner going out there
00:03:01 and saying that India is the top EM pick
00:03:04 and within Asia as well, India, Japan kind of stay
00:03:07 the top ideas.
00:03:09 And amongst all the things that he says,
00:03:10 I mean, something that a few other people are worried about
00:03:13 when Jonathan Garner says you stand up and take notice
00:03:15 is that premium valuations are warranted
00:03:17 by the superior fundamentals that India has.
00:03:21 So I thought that-
00:03:22 The Patek Philippe analogy continues.
00:03:24 In some sense, right?
00:03:25 Yeah.
00:03:26 And this is like Jonathan Garner sending out that Asia note
00:03:29 to all their clients and saying that, you know,
00:03:31 India is very likely to remain expensive,
00:03:33 structural outperformance, so on and so forth.
00:03:35 I thought that note is very interesting,
00:03:36 independent of the sense of the nifty targets
00:03:38 that they may put out,
00:03:39 but just the fact that there are people saying
00:03:40 that India will remain expensive.
00:03:42 While Jonathan Garner says that Mark Mobius as well,
00:03:45 that I spoke to on Friday was of this very same opinion.
00:03:47 He said, "We hold 25% in your exposure,
00:03:51 "which is the single largest exposure to a country
00:03:54 "in his emerging market fund."
00:03:55 He said, "While we are valuing companies
00:03:57 "and looking at India as an expensive market,
00:03:59 "a lot of it is not very forward-looking."
00:04:01 So the growth is so strong
00:04:04 that those valuations are justified.
00:04:06 But just a quick one on,
00:04:07 while those are the two guys are very bullish, CLSA.
00:04:10 No, sorry, just-
00:04:11 Yeah, go on.
00:04:12 Just a word on Mobius, nothing else,
00:04:12 but people tend to forget,
00:04:13 people who are newbies tend to forget
00:04:14 that the original EM expert-
00:04:16 King is Mark.
00:04:17 Is Mark Mobius.
00:04:18 Yeah, is Mobius.
00:04:19 You know, and he did say, he said,
00:04:20 "I was in the country a few months ago,
00:04:22 "and we were talking about real economy,
00:04:24 "and it's funny, it keeps coming back to me
00:04:25 "in various forms."
00:04:26 And he said, "Historically,
00:04:28 "while I've always made a trip to India,
00:04:29 "I can significantly see a difference.
00:04:32 "You can see things changing,
00:04:34 "you know, the vibe, the whole conversations
00:04:36 "have actually changed."
00:04:38 But talking about expensive and non-expensive,
00:04:40 I think CLSA put this article out,
00:04:43 their report last month,
00:04:44 where they say that India stands now
00:04:46 to be the most expensive market in the world.
00:04:50 They also said it's the only market
00:04:52 that's trading in the top decile
00:04:54 of its historical trading range.
00:04:56 CLSA, Morgan Stanley,
00:04:58 well, the market's clearly weighing both
00:05:00 and consolidating as expected.
00:05:01 Yeah, so you can argue that.
00:05:03 Actually, the trade setup,
00:05:05 I mean, you know, on the trade set,
00:05:06 that's what I'm saying,
00:05:06 because main indices last week
00:05:09 had a very quiet week.
00:05:10 It was only PSUs,
00:05:11 which kind of were to the fore.
00:05:14 And I dare say, just looking at the numbers,
00:05:16 ONGC, SJVN, Midhani, SCI, et cetera.
00:05:19 Not great.
00:05:20 Let's see if there's a bit of a breather there
00:05:21 on the PSU pack today,
00:05:23 and maybe for the rest of the week.
00:05:25 The other aspect is that a lot of people
00:05:27 have been talking about is,
00:05:28 can there be a V-shaped recovery in private banks?
00:05:31 The weightage of private banks, guys,
00:05:33 by virtue of the selling that has happened,
00:05:35 has come off by nearly 500 basis points on the Nifty.
00:05:39 So that's the extent of damage that has happened.
00:05:41 Can there be a V-shaped bounce back?
00:05:43 Now, surely the argument around valuations is fact,
00:05:45 but if you look at the delivery-based selling
00:05:48 that happened last week as well
00:05:49 in almost all the private sector banks,
00:05:51 and not just HDFC Bank,
00:05:53 I think there is an issue there.
00:05:54 The delivery-based selling leads one to believe
00:05:56 that the V-shaped recovery
00:05:58 is not necessarily very, very likely.
00:06:00 Sure, you could buy them right now.
00:06:02 They are great valuations.
00:06:03 One year down the line,
00:06:04 you'll be laughing your way to the bank, hopefully.
00:06:06 We all hope so, because we want banks to perform.
00:06:09 But the V-shaped recovery from a trading perspective
00:06:12 may not necessarily be the case,
00:06:14 even though the whole of last week
00:06:15 I've been saying that these are levels
00:06:17 from where the quant indicators indicate
00:06:19 the market is ripe for a bounce back.
00:06:21 May not be banks, though.
00:06:22 Lastly, just from a sectoral perspective,
00:06:24 news flow results, Milaakhe, Pharma,
00:06:28 probably the sector of the day today,
00:06:29 for right and the wrong reasons,
00:06:31 and cement for the kind of results that have come out, guys.
00:06:33 I mean, the stocks have moved up a little bit,
00:06:36 but not surprising as we reach
00:06:39 the busy end of the construction season
00:06:41 that you see cement dispatches month on month go up,
00:06:44 and therefore the stocks continue to see more activity.
00:06:46 Yeah.
00:06:48 A lot of stocks really in focus today,
00:06:50 but let's start with the big ones.
00:06:52 Yeah, big ones to watch.
00:06:53 So you've had, you know,
00:06:54 I'm just gonna add auto to that list, right?
00:06:56 Again, fantastic numbers.
00:06:57 So auto sector along with pharma could be one.
00:07:00 You wanna closely watch out.
00:07:01 We'll quickly take you through the big earnings.
00:07:04 Two big ones, one from the pharma, one from the auto pack,
00:07:06 but I'll start with Hero Motor Corp.
00:07:09 Fantastic numbers to say the least.
00:07:11 We generally seem quite impressed
00:07:12 with what we've seen on Hero Motor Corp.
00:07:14 Their revenues were up substantially, up 21%,
00:07:18 to come in at 9,724 crores.
00:07:22 EBITDA was up nearly 48%.
00:07:24 Margins have expanded substantially,
00:07:27 and I think that is what the street
00:07:28 is gonna be very excited about.
00:07:30 It's up at 14% versus 11.5%
00:07:33 that was seen in the same quarter last year.
00:07:35 Well, what stood out for us on Hero Motor Corp
00:07:38 was the fact that most brokerages are optimistic.
00:07:41 They've all upped their target price on Hero Motor Corp.
00:07:44 We've seen Chefries and Nuwama for now.
00:07:46 Both those target prices now stand at 5,650
00:07:48 and 5,600, respectively.
00:07:52 Well, they're poised, what brokerages believe
00:07:55 is that Hero Motor Corp is poised
00:07:57 for a strong growth going ahead
00:07:59 on back of two-wheeler demand.
00:08:01 Premiumization and EV are the two verticals
00:08:03 or segmentization that is gonna work out
00:08:06 for Hero Motor Corp going ahead.
00:08:08 Free cash flow as well is expected to remain strong.
00:08:11 So that is the Hero Motor Corp story.
00:08:13 No upgrades as such, but increase in target price
00:08:16 is what's gonna drive the counter going ahead.
00:08:18 And the fact that the free cash flow
00:08:21 and earnings have been strong margins are good.
00:08:23 The counter will see some buying
00:08:25 in early hours of trade today.
00:08:26 Well, let's move on from Hero Motor Corp
00:08:28 to the other one that looked pretty fantastic was Honasa.
00:08:32 Their revenues were up 27% to come at 488 crores versus 382.
00:08:37 EBITDA was also very sharply at 34 crores
00:08:41 versus 11.8 crores.
00:08:43 Margins here to have expanded sharply
00:08:45 by 395 basis points or 7% so versus 3.08
00:08:49 that we saw in the same quarter last year.
00:08:52 A couple of things that stood out for Honasa
00:08:54 is their same store sales have actually grown
00:08:57 quite substantially up 31%.
00:08:59 Stronger volumes have led to higher growth.
00:09:03 Better festive demand is what pushed this quarter
00:09:07 for Honasa.
00:09:08 Industry growth in line with industry.
00:09:11 What you also wanna see here is that
00:09:13 and this we've seen quarter on quarter
00:09:15 for Honasa capital efficiency.
00:09:17 The fact that they're sitting on a huge pile of cash
00:09:19 helps them with their working capital cycle
00:09:21 which continues to stay at minus six days.
00:09:23 So capital efficiency is what has been
00:09:26 a pretty impressive factor for Honasa
00:09:29 and that continues to play ball for them.
00:09:31 The stock went home with gains of 4% on Friday.
00:09:33 Won't surprise me if we get a good gap up on this one too.
00:09:36 The other one that's definitely on our radar
00:09:39 and I'm excited about this is Aurobindo Pharma.
00:09:42 Very, very strong earnings for Aurobindo.
00:09:44 They came revenues were up 14.7% at 7,351 crores.
00:09:48 EBITDA was up 68% to come in at 1,600 crores.
00:09:52 Margins also expanded substantially from 14.8
00:09:55 that we saw in the same quarter last year.
00:09:58 You've seen an expansion of 22%.
00:10:00 Net profits also were quite high
00:10:03 at about 92% higher for the quarter.
00:10:05 Remember Aurobindo since December 21
00:10:08 hasn't done margins such as these.
00:10:11 So that is what we're excited about.
00:10:13 Over 20%, they've not managed to beat that
00:10:16 since December 21.
00:10:17 So the markets will be excited about that
00:10:19 with Aurobindo on the margin front
00:10:22 and profit as well has been the highest ever
00:10:25 posted by Aurobindo Pharma.
00:10:26 So the stock in early trade like Neeraj Chintamna said,
00:10:30 Pharma is gonna be a space to watch
00:10:32 and Aurobindo could be the leader
00:10:33 of the pack this morning guys.
00:10:34 - Yeah and Aurobindo Pharma has gone
00:10:36 through a lot of ups and downs as well.
00:10:39 There was some negative news flow
00:10:40 in terms of observations, et cetera.
00:10:43 So all said and done the numbers may give it that boost
00:10:48 but not everything is hail and hearty
00:10:50 and ONGC definitely may see some negativity.
00:10:55 Now, one thing to keep in mind is that,
00:10:57 remember crude prices have been softening
00:10:59 and that's generally not very positive for ONGC.
00:11:02 So you did see, and we're taking standalone numbers here.
00:11:05 I want to make a point of that.
00:11:07 Revenue is down 1%, EBITDA down 13%.
00:11:11 Margins have shrunk fair bit about 600 bps
00:11:15 and net profit is also down about 6.7%.
00:11:19 Couple of reasons, remember the gas policy has capped prices.
00:11:23 On the other hand, there were some weather related
00:11:28 disruptions to their work.
00:11:30 And having said that though,
00:11:32 Citi has retained a buy on ONGC with a 285 rupee target.
00:11:37 They say that the results are weaker than expected.
00:11:40 Like we've been mentioning the EBITDA is below estimates
00:11:44 and oil and gas production trends have been slow.
00:11:48 Having said that, their kg production ramp up
00:11:51 which has started pretty much last month
00:11:54 will start showing benefits on Q4.
00:11:56 So that's one to remember.
00:11:58 There could be an upside going forward.
00:12:01 So positive view on high earnings visibility
00:12:03 and attractive dividend yield
00:12:04 is some of the points that Citi sees on the plus side.
00:12:08 SJVN is another one I would say.
00:12:11 And Neeraj was talking about how for a lot of companies
00:12:15 which have run up on the back of promises,
00:12:18 the numbers sort of give a clearer picture.
00:12:20 So revenue is down about 1.5%, EBITDA down 3%.
00:12:24 The margins have narrowed to about 67.81 versus 68.91,
00:12:29 so about 112 bps.
00:12:31 And net profits though are down a fair bit,
00:12:34 down 51% at 138.97 crores.
00:12:39 So sharp cut over there.
00:12:40 There's an interim dividend.
00:12:42 Bloomberg put out a story about how
00:12:44 JM Financial Institution has cut recommendations on SJVN
00:12:49 to sell from a hold.
00:12:52 And the target price has also been set down to 72 rupees.
00:12:58 So I would watch out for SJVN as well.
00:13:01 Of course, they've trailed all of the estimates.
00:13:04 Divis Lab is one though, which looks, I would say positive.
00:13:09 Revenue is 8.6%.
00:13:11 And pharma definitely is a larger trend
00:13:14 that we've been seeing over here.
00:13:16 Revenue is up 8.6%, EBITDA is up 19%.
00:13:20 Margins also looking healthy.
00:13:22 Net profits are up 17%.
00:13:24 Novama says they have reduced their take on Divis Lab,
00:13:28 but they've increased the price target to 3200
00:13:31 from a 3070 earlier.
00:13:35 Revenues have disappointed according to Novama,
00:13:37 no meaningful margin recovery.
00:13:39 And pressure in genetics and higher OPEX,
00:13:42 operation expenses has led to EBITDA margin miss.
00:13:46 So quite a few.
00:13:47 I'll come back with more, Neeraj,
00:13:49 because so many stocks to discuss this morning,
00:13:52 but what's your top three or top four on your list?
00:13:54 - Yeah, and just a word on Divis,
00:13:56 much like Loris and much like some of the others,
00:13:58 the CDMA opportunities are taking time to fire.
00:14:01 And while Novama have done what they've done,
00:14:04 Erara, Systematics, and one more,
00:14:09 all three are negative on Divis because of this performance.
00:14:13 And in fact, I think the, if I'm not wrong,
00:14:15 the Systematics note by Vishal Manchanda
00:14:18 speaks of a price target which is 30% lower
00:14:20 than the current market price as well.
00:14:22 So much like Loris, but maybe as Harsh was pointing out,
00:14:26 this is the first quarter of margin recovery for Divis,
00:14:28 so it could be interesting to see if the markets reward that
00:14:31 or do the markets punish the no growth in sight
00:14:34 problem for Divis.
00:14:35 But Tamanna mentioned Pharma and PSUs,
00:14:38 I'm carrying forward that baton, a lot of weak numbers.
00:14:41 So Midhani is the other one, much decorated,
00:14:46 very strongly favored stock,
00:14:48 but look at the margin contraction there.
00:14:50 Revenues were up 8%, which is okay.
00:14:52 I mean, single digit growth, nothing to write home about,
00:14:54 but okay.
00:14:55 But EBITDA down 45% for Mishra, Dhatu, Nigam,
00:14:58 as a result of which margins contracted 1,400 basis points
00:15:03 from 28% to 14%.
00:15:05 Now, this is not a good print by any stretch of imagination,
00:15:10 even if the valuations were good,
00:15:11 which they're not necessarily cheap.
00:15:13 And net profit down 67%, so very likely that Midhani
00:15:16 will have a correction today in addition to SJVN.
00:15:19 SCI, everything else was okay.
00:15:23 Revenues were down 10%, which is not great, by the way.
00:15:25 One would have hoped that in a quarter,
00:15:26 which is seen probably shipping rates move up
00:15:29 because of all that's happening around Red Sea,
00:15:30 but maybe there are disruptions, what have you.
00:15:32 But SCI, revenues down 10%, EBITDA down 11%,
00:15:35 margins flattish, net profit down 50%.
00:15:38 And for a stock that really rallied from nearly 180
00:15:41 to 260, 270, and then has come back,
00:15:44 this is not a good print.
00:15:46 Very likely that might see a bit of a reaction as well.
00:15:48 And last talk, and then I'll come back with others,
00:15:50 but the last talk is on my radar is campus active wear.
00:15:54 Now, we know what's happened to Bata,
00:15:55 we know what's happened to Relaxo.
00:15:57 Certainly, the footwear companies,
00:15:59 which are not necessarily premium focused,
00:16:02 are seeing an issue.
00:16:03 Campus revenues were up 1.37, so very, very,
00:16:06 very blah, if you will.
00:16:07 But as a result of that, the margin narrowed
00:16:10 to 781 basis points, by 781 basis points,
00:16:14 to 11.92 versus 19.74%.
00:16:17 And by the way, the revenue numbers are kind of in line
00:16:20 with, more or more in line with estimates.
00:16:22 The margin expectation was 20.8,
00:16:24 and they've come in at 11.92.
00:16:26 Pat at 25, expectations of 57.
00:16:29 So very bad performance, very likely campus too,
00:16:32 like Relaxo's and like the others,
00:16:34 Bata's have done, might have a bit of a reaction.
00:16:36 - One that may have a good reaction would be
00:16:38 PI Industries.
00:16:40 - Waiting for one, a good number.
00:16:41 - Very, very good number there.
00:16:42 It's been a multi-bagger in the last couple of years.
00:16:46 It's been a favorite for the street.
00:16:48 Let me take you through what those earnings are.
00:16:50 Revenues were up 17% to come in at 1,897 crores
00:16:54 versus 1,600 crores.
00:16:56 EBITDA was also up nearly 34% to come in at 553.
00:17:01 Profits were up 28% at 448 crores versus 351.
00:17:06 They've also approved an interim dividend
00:17:08 of six rupees per share.
00:17:10 Couple of things that stood out for PI Industries
00:17:12 is their strong revenue growth is what has pushed
00:17:15 them up for this quarter.
00:17:17 Margins have also aided back.
00:17:19 Very, very solid margins have come in at 27%
00:17:22 versus 25% in the same quarter last year.
00:17:25 CMS, remember, is the key driver for its earnings
00:17:28 and that's really what's played out for the company
00:17:31 in this quarter.
00:17:32 13% growth was seen in the agrochemical exports,
00:17:35 which was again led by a strong product mix and by volumes.
00:17:39 What we did see on margins, which is worth the mention,
00:17:42 is a one-time impact of a theft recovery.
00:17:44 So that contributed about 300 basis points to the margins.
00:17:47 So while the margins are very solid,
00:17:49 a function of that is a one-off item for PI Industries.
00:17:54 So the top line numbers are looking great.
00:17:56 There is volume growth.
00:17:57 There is revenue growth.
00:17:58 They've also talked about aggressively expanding.
00:18:02 They've spent 763 crores on acquisitions,
00:18:05 pharma acquisitions, a tune of 500 odd crores.
00:18:08 And remember, the counter was under pressure
00:18:11 because of Chinese players entering
00:18:13 the pro-sulfane business, which is a key product
00:18:17 for PI Industries.
00:18:18 But the markets, of course, the management,
00:18:20 did indicate that this is not going to be a problem
00:18:23 because they do hold the key licensing on this one
00:18:26 until F5 '28.
00:18:28 So good news and bad, but the good news
00:18:31 is that good numbers and while you'll
00:18:33 have listed a few bad ones, this one hopefully
00:18:35 should get a little bit of a pop-up this morning.
00:18:37 I wish I had another great one to talk about next.
00:18:40 I do, but you can quickly finish yours.
00:18:42 Yeah, no problem.
00:18:43 Good, bad, good.
00:18:43 Good, bad, good.
00:18:44 OK.
00:18:45 So Tata Power.
00:18:45 Tata Power is one I thought we should bring up.
00:18:49 And a bit of a blah quarter.
00:18:52 I'm going to use Neeraj's word of the day, blah.
00:18:54 So a bit of a blah quarter.
00:18:56 Revenue is up to about 3.5%, nearly 4%.
00:18:59 EBITDA is also doing OK.
00:19:03 But just look at the CLSA note where
00:19:05 they're talking about the stock being ahead
00:19:09 of its fundamentals in a frenzy of power stocks.
00:19:12 And that's really what will perhaps give it
00:19:16 not too much excitement.
00:19:17 Weak coal prices is a key risk to its EPS,
00:19:20 though there is a positive in terms of Odisha Discounts
00:19:23 and pump storage.
00:19:24 They have upped the target, though, to 249.
00:19:27 So Tata Power is one that I would watch out for.
00:19:30 And we're going to be speaking to them ahead on the show
00:19:32 as well.
00:19:34 Should we quickly talk about 197?
00:19:36 Just because--
00:19:38 Very quickly, but we are out of time completely.
00:19:40 There is no relenting to the news flow on it.
00:19:43 And we've broken a story this morning
00:19:45 about how that 29th Feb deadline may be extended.
00:19:48 That could be looked as a bit of a positive.
00:19:51 For Paytm shareholders, cross fingers.
00:19:53 Just very quickly, two stocks that might react positively,
00:19:56 Inox Wind and Doms.
00:19:58 Very good numbers from both, margin expansion from both.
00:20:00 So watch out for both, Inox Wind as well as Doms.
00:20:03 Those are two names that might react.
00:20:04 But we've got to go across to Agam now
00:20:06 to try and understand what is there on Editor's Cut today.
00:20:09 Because Agam, are we talking about something good?
00:20:11 Because you highlighted a lot of bad numbers right now.
00:20:14 Yeah, we're talking about something really good, in fact.
00:20:17 And I've been put on Outperformer, too.
00:20:19 And by that, I mean State Bank of India.
00:20:21 What's really interesting is that State Bank of India
00:20:23 has gained 20% from its low made in 2024.
00:20:30 And if you take that date where it made its low in 2024,
00:20:34 the bank nifty is flat.
00:20:36 So this is a clear Outperformer.
00:20:38 The question really is, what is it that's really
00:20:40 driving State Bank of India?
00:20:42 In fact, in the last three odd sessions as well,
00:20:45 it has moved up by as much as 12% to 13%.
00:20:48 And a lot is at foot.
00:20:51 And for that, I have with me Vishwanath Nair as well as
00:20:54 Harsh Saita, who's going to guide us and perhaps tell us
00:20:56 a little more about what could possibly be behind this move.
00:21:00 Vishwanath, I'm going to start with you.
00:21:01 What do you have for us?
00:21:02 So I'm calling it the giant's age,
00:21:06 because SBI being the largest lender in this country
00:21:10 and moving at the pace that it is,
00:21:14 everybody else is sort of in awe of where SBI is at this stage.
00:21:18 If you look at some of the negatives--
00:21:20 of course, quarter three results came in about last week.
00:21:23 And the numbers teach you a bit of a disappointment.
00:21:28 Primarily, the net profit did go down
00:21:31 because of one-time wage-related and pension-related provisions
00:21:34 that they made.
00:21:35 This, the bank says, is likely going to normalize going ahead.
00:21:38 But it's obviously a disappointment.
00:21:41 The other thing was that even if you adjust for these one-time
00:21:45 hits, the net profit's up about only about 1%, 1.5%
00:21:48 year on year.
00:21:49 That's not looking so good.
00:21:51 If you look at fresh slippages, they
00:21:53 are up largely driven by retail NPAs.
00:21:57 There's lower recoveries and upgradations
00:21:59 that have happened in Q3.
00:22:00 So those are the slight disappointments as far as
00:22:02 the Q3 numbers are concerned.
00:22:04 Of course, for a bank like SBI, you
00:22:05 need to look at a wider range of numbers.
00:22:08 And for me, the moonshot sort of situation for SBI
00:22:13 is the fact that the FY23, they ended at the decade's
00:22:17 best credit growth, 16-odd%.
00:22:19 It's tapered off to close to 14.5%, 15% now.
00:22:22 But it doesn't look like it's going to slow down further
00:22:25 from that point of view.
00:22:27 Asset quality, best in recent history.
00:22:30 You're seeing that despite the regulatory tightening
00:22:34 on unsecured loans, the bank is continuing
00:22:37 these unsecured loan growth at a reasonable level, about 16-odd%,
00:22:40 16.5%, which is not too bad as far as SBI size is concerned.
00:22:45 You look at any kind of the capital adequacy,
00:22:49 of course, during the third quarter,
00:22:51 there was a hit because of the RBI's unsecured loan norms.
00:22:56 123 bps dip on a quarter-on-quarter basis.
00:22:58 But what the bank is guiding is that going ahead,
00:23:01 there's going to be improvement on the capital adequacy
00:23:04 simply because of the nature of the business that they're in.
00:23:07 Investment book revaluation that will come in
00:23:10 from 1st of April, that will boost capital adequacy.
00:23:14 You've got ROE outpacing credit growth.
00:23:17 That's going to help with capital acquisition.
00:23:19 These things are working in favor of, say, Bank of India.
00:23:23 Business by employee, now that's the important bit.
00:23:25 Because when you talk about wage-related or pension-related
00:23:28 provisions, you have to look at what these provisions are
00:23:30 leading to.
00:23:31 As far as SBI is concerned, that business-per-employee number
00:23:34 is at about 30 crore per year.
00:23:36 That's a lot.
00:23:38 That's a very high number, considering, of course,
00:23:40 SBI's large employee base.
00:23:43 And they're not seeing that kind of high attrition
00:23:45 that some of your private peers are seeing.
00:23:47 One point that I want to mention is on the corporate credit
00:23:50 growth.
00:23:51 Now, there, SBI is beating the private sector peers just
00:23:55 hands down.
00:23:56 There's no way that a private sector bank in the current
00:23:59 business macro environment can compete on pricing with SBI.
00:24:02 SBI is sitting at a reasonably healthy credit deposit ratio.
00:24:05 They've got liquidity reserves, 131% or LCR.
00:24:11 They've got, of course, deposits are still growing 14.5%.
00:24:14 They've got that in place.
00:24:16 So unlike their private sector peers,
00:24:18 that cost of capital or cost of deposits,
00:24:22 as well as the lack of liquidity or tighter liquidity
00:24:24 situations, does not seem to be affecting SBI that heavily.
00:24:27 4 lakh crore worth of additional SLR, unencumbered SLR holdings,
00:24:31 all of that is just free liquidity lying around
00:24:33 on the balance sheet for them to grow much faster.
00:24:36 But I'll move to Harsh for any view
00:24:39 on the valuation of the bank.
00:24:40 Yeah, absolutely, Vishy.
00:24:41 So before I go to valuations, let me just add a little bit
00:24:44 to what you've said.
00:24:45 I think, Vishy, what we were speaking about last evening
00:24:48 as well, with regard to ROAs, that's
00:24:50 going to hold the key when it comes to SBI,
00:24:53 including its valuations and how valuations are to be looked at.
00:24:57 Now, ROAs have breached the 1% mark.
00:25:00 They've come off that 1% given the one-offs that have happened.
00:25:03 Probably another quarter of a bit of pain
00:25:05 with regard to provisioning, because there'll
00:25:07 be 5,400 crore of provisioning, which will happen in Q4.
00:25:10 And maybe that's a bit of an overhang with regard to ROAs.
00:25:13 But can ROAs sustainably be above that 1% mark?
00:25:17 At least analyst estimates seem to suggest that it will be.
00:25:20 Because they are penciling in a profit after tax,
00:25:23 FY '25, of 70,000 plus crore, as per Bloomberg estimates,
00:25:27 average analyst expectations.
00:25:29 And therefore, you will have that 1% plus ROA
00:25:32 continue to come through at least in FY '25, as well as '26,
00:25:37 which is a big plus.
00:25:38 As you said, credit growth will be solid.
00:25:41 But the one other key perspective to this
00:25:44 is, with the ROA, I also want to try and comment on the margins.
00:25:48 Because margins, it seems, have bottomed now.
00:25:50 And therefore, there is very little downside scope
00:25:54 for ROAs.
00:25:56 That's just the general sense that we're getting,
00:26:00 of course, based on estimates, et cetera.
00:26:02 Now, with regard to valuations itself,
00:26:04 you are seeing valuations at roughly 1.4.
00:26:06 You're looking at PSU banks, which
00:26:09 have rallied substantially, probably
00:26:12 on a low free float as well.
00:26:13 So let's give it a little bit of discount there.
00:26:15 But at 1.4 times trailing 12 months,
00:26:17 it's looking extremely good.
00:26:19 And at 1.1 times forward, it's looking quite attractive.
00:26:25 Basis, last five-year average, which is roughly 1.4.
00:26:29 So you're trading at your five-year average,
00:26:31 but you're looking at probably a year in which banks have had
00:26:35 the best couple of years of run.
00:26:37 And the runway seems to be quite solid with regard
00:26:41 to the next two years in terms of visibility.
00:26:43 So overall, it looks like, despite this run-up,
00:26:47 valuations still seem quite decent.
00:26:49 It doesn't seem to be stretched in any way,
00:26:52 especially for SBI as well as a couple of other larger ones,
00:26:56 like Canberra Bank and Bob.
00:26:59 But especially with regard to SBI, given the size.
00:27:02 I just want to add one point, Agam.
00:27:04 During the results announcement, the management was very clear.
00:27:08 They don't need the capital.
00:27:09 They're about 13%, 100 bps higher
00:27:11 than the regulatory minimum.
00:27:13 They're fine as far as growth is concerned.
00:27:16 If they need to, they're ready with a capital-raising plan.
00:27:21 Just listening to the valuation bid,
00:27:22 I'm thinking that if there was to be some kind of a QIP
00:27:26 or an equity-raising plan, SBI is
00:27:28 going to be pretty well-placed as far as your capital
00:27:33 position is concerned, as well as market valuation is concerned.
00:27:36 This is important in the current environment
00:27:38 because most banks are seeing some amount of movement
00:27:42 on the valuation front, simply because business has changed.
00:27:45 Last two or three years have been a period
00:27:48 of fairly easy liquidity.
00:27:50 Now it's tightening.
00:27:51 Now businesses are becoming slightly more complicated
00:27:55 on the banking front.
00:27:56 So SBI may be best placed to capitalize
00:27:59 on any future growth.
00:28:00 I just want to put things into perspective
00:28:02 because we've seen a sharp divergence in the way SBI has
00:28:05 moved and HDFC Bank has moved.
00:28:07 And it's natural for anyone to compare the private sector
00:28:10 banks with the state banks.
00:28:14 How do you think this pans out?
00:28:16 What do you think investors have at the top of their mind
00:28:18 at the moment?
00:28:19 I'll tell you what.
00:28:20 During the analyst call that SBI held after its results,
00:28:23 they said that they have headroom
00:28:25 to grow the balance sheet by about 7 and 1/2,
00:28:28 8 lakh-odd crore.
00:28:30 That's a massive number, right?
00:28:33 HDFC Bank is saying that every four or five years,
00:28:36 they're going to add another HDFC Bank.
00:28:37 Well, here you have SBI, which is
00:28:39 doing pretty much the same thing and at a much higher base.
00:28:43 So if you look at it from that point of view,
00:28:45 there's a lot of firepower that's
00:28:48 left with SBI at this stage.
00:28:51 I want to caveat this with we have seen this in the past.
00:28:54 And it didn't really pan out the way people planned it,
00:28:58 especially chief of all these banks.
00:29:02 Let's see what happens.
00:29:04 We can't write off HDFC Bank yet because at the end of the day,
00:29:07 it is one of the most efficient lenders that we have in India.
00:29:11 Can't write off HDFC Bank as SBI doesn't look weak
00:29:14 in any comparison.
00:29:16 Right.
00:29:17 And Agarmond Valuations, you're looking at a sharp divergence.
00:29:21 You're looking at HDFC Bank trading just above two times
00:29:23 price to book.
00:29:24 And you have SBI trading just about one times price to book.
00:29:28 So from a valuation perspective, SBI
00:29:30 is probably trading at a 50% discount.
00:29:33 Right, absolutely.
00:29:33 So of course, and to a certain extent,
00:29:36 the state bank valuations have always
00:29:38 been lower as compared to the private banks.
00:29:41 But a lot of factors, a lot of points
00:29:44 to ponder about when it comes to State Bank of India, which
00:29:47 clearly is at the moment in the driving seat,
00:29:49 quite literally, even in terms of stock prices
00:29:51 and the way things have panned out
00:29:53 over the course of the last few days in the Bank Nifty,
00:29:55 among the Bank Nifty constituents.
00:29:57 The question really is where do we go from here?
00:29:59 And how does the private sector bank sector
00:30:02 play out going forward?
00:30:04 Well, these are questions that will be answered down the line.
00:30:07 But Harsh and Vishwanath, thanks for joining us and getting us
00:30:10 that perspective.
00:30:11 And with that, it's time to slip into a short break.
00:30:15 But on the other side, we continue with Markets Coverage.
00:30:17 Stay tuned to NDD Profit.
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00:33:44 - Welcome back, you're watching India Market Open.
00:33:57 A quick check on how Implied Nifty is doing this morning.
00:33:59 It's expected to see a gap up as we gear up for trade,
00:34:02 but remember it's gonna very likely could be a day
00:34:05 of consolidation with stock specific action
00:34:07 that will be driving the street.
00:34:09 There are also a whole bunch of brokerages
00:34:10 that have come out with their reports
00:34:13 on PB FinTech in particular.
00:34:15 Anushi is joining with more details on that, Anushi.
00:34:18 - Right, so on PB FinTech, Jefferies has come out,
00:34:21 initiated a buy over here,
00:34:23 implying about a 23% upside at a target price of about 1,150.
00:34:28 So they are expecting about a 30% CAGR growth
00:34:31 over the next course of two years,
00:34:34 that is from FY25 to 27,
00:34:36 and they are backing this by,
00:34:38 and also they're backing of 5X EBITDA jump expectation
00:34:42 from the 23 to 27 period.
00:34:45 So some strong expectations over here.
00:34:47 But on the revenue front,
00:34:48 they are seeing about a moderation
00:34:50 from their earlier 30% CAGR growth,
00:34:53 about 22% CAGR growth over FY24 to 27
00:34:57 after the new RBI measures that are in place.
00:35:01 Again, key risk over here continues to remain
00:35:04 on the regulations that are still evolving in this space,
00:35:07 and also strong competition which might emerge from Jio.
00:35:11 Another one that I want you to focus on
00:35:14 is also Apollo Hospital,
00:35:15 in which our city has maintained its best pick
00:35:18 among the hospitals,
00:35:19 wherein it has maintained a buy at about 7,670.
00:35:23 This was on the back of Q3,
00:35:26 which was mainly largely in line with expectations.
00:35:29 While the EBITDA was impacted
00:35:31 due to the seasonality and cyclone impact,
00:35:34 the management continues to maintain
00:35:35 its 200 BPS margin expansion guidance
00:35:38 over the next 18 to 24 months timeline,
00:35:42 and sees a break even for its online 24/7 business.
00:35:46 So that can be on radar.
00:35:48 Again, Yuwama has maintained a buy on Apollo Hospitals
00:35:51 as well with a target price of 7,500
00:35:55 on the back of its strong hospital
00:35:57 and offline pharmacy growth.
00:35:58 So definitely these two should be on the radar today.
00:36:01 - Right, Anushi, thank you for that.
00:36:05 Apollo Hospitals definitely one to watch out,
00:36:07 or all round positive house notes on the numbers as well.
00:36:12 Now, another set of stocks that we must talk about
00:36:15 this morning, PI Industries, Inox Wind,
00:36:17 and Honasa that came out with its earnings.
00:36:20 We mentioned a few of them briefly in our trade setup,
00:36:22 but Varsha joining in with more details.
00:36:25 Varsha.
00:36:26 - Good morning, Tamanna.
00:36:26 So let's start with PI Industries,
00:36:28 where you see our revenue was up 17%.
00:36:31 Now this was led by 13% growth in agrochemical exports,
00:36:36 which was led by volume growth
00:36:37 and newly commercialized products.
00:36:40 Also, if you see this,
00:36:41 there's improvement in EBITDA margin,
00:36:43 which was of course led by favorable product mix
00:36:45 and operating leverage.
00:36:46 But the main thing why EBITDA margin has been improved
00:36:48 is one time impact of recovery of theft material
00:36:51 contributing 300 basis points improvement in EBITDA.
00:36:55 Then we have Inox Wind,
00:36:56 where you see huge uptick in revenue of almost 2X,
00:36:59 while EBITDA is at 92 crore versus loss last year,
00:37:02 and margin standard 18%.
00:37:05 Now if you see with the single largest order win
00:37:07 of almost 1500 megawatt,
00:37:08 order book stands at almost 2.6 gigawatt,
00:37:11 and they have target to achieve net debt free status
00:37:14 for the company in the next few months.
00:37:17 Then lastly, we have Honasa Consumer,
00:37:19 wherein revenue was 27,
00:37:22 there was growth of 27% in revenue.
00:37:24 Now this was led by volume,
00:37:26 and also if you see the same store sales growth
00:37:30 is up almost 31%,
00:37:31 and EBITDA is up 2X at 34 crore,
00:37:35 while net profit is up 3X,
00:37:37 which is led by sales growth.
00:37:38 - Right, thanks for that, Varsha.
00:37:41 There's a whole bunch of stocks that will be in focus.
00:37:43 Honasa, PI should be getting a thumbs up guys this morning.
00:37:47 But just a quick diversion from equity markets,
00:37:49 another asset class which we've been tracking
00:37:51 and I think investors generally have been tracking
00:37:54 as well is SGBs, sovereign gold bonds.
00:37:56 Remember they're open today for subscription,
00:37:58 they will run for the next three days.
00:37:59 So if you're looking to add paper gold to your portfolio,
00:38:04 you must look at SGBs,
00:38:06 which are open for subscription today.
00:38:08 We will take you through a lot more details on that
00:38:10 later on in the day.
00:38:11 But coming back to the markets guys,
00:38:13 I think lots of stock specific trade
00:38:15 and I think the markets are gonna focus on that.
00:38:17 One we didn't talk about was ONGC earnings.
00:38:19 - I did. - Oh, you did.
00:38:20 You did mention ONGC. - I did start it off
00:38:21 with ONGC. - Yeah.
00:38:22 So mixed sort of pack largely,
00:38:24 but I think the broader markets may continue
00:38:26 to spend time consolidating again.
00:38:28 Bank Nifty of course has maintained 45,000.
00:38:31 I think traders taking a little bit of heart from that.
00:38:33 - Yeah. - The PSUs might be
00:38:34 a bit of a pickle today.
00:38:35 I mean, we've seen a bit of a pullback sometime last week.
00:38:38 We did a piece on that as well as to maybe a breeder.
00:38:41 But just the fact that fundamentally
00:38:43 the results have been so bad,
00:38:45 and then we come in a clutch.
00:38:46 Since Friday evening, five PSU stocks coming out
00:38:49 with numbers, all of them highly valued,
00:38:51 all of them weak.
00:38:52 So that is probably a bit of a pickle.
00:38:54 Anyways, that index has come off a little bit
00:38:56 since the time we did that piece on editors cut as well.
00:38:59 But just that stretch valuations, not so great earnings.
00:39:02 Yes, a lot of promise,
00:39:03 but maybe the market wants performance every quarter.
00:39:05 - I have a slightly different take on PSUs.
00:39:09 Yes, they're definitely cooling off as they should have,
00:39:11 and as it's very, very valid.
00:39:14 But you are going to hear, by you I mean,
00:39:17 all of us are going to hear more and more
00:39:19 on government intent on driving your goal
00:39:23 to develop nation, et cetera, with PSUs at the forefront.
00:39:28 So there is going to be more investments.
00:39:31 There's going to be better cleanup of books,
00:39:33 more efficiencies as well.
00:39:35 So this is a mood that could change fairly quickly.
00:39:39 That's all I'm saying.
00:39:41 - 100% sure.
00:39:42 The only question is, like, for example,
00:39:45 when I'm not comparing the two,
00:39:47 but I'm just saying, for example,
00:39:49 when this whole Ayodhya thing happened,
00:39:50 and there was a small stock called Praveg,
00:39:52 which went through the roof,
00:39:53 went up to all the way to 1300, right?
00:39:56 And it just seemed that there was just so much
00:39:58 of exuberance around the valuations
00:40:00 that it left little room for error.
00:40:02 The stock has corrected to 1,950, and are now staying there.
00:40:06 I'm sure at some, or rather, I'm not sure, nobody's sure,
00:40:09 but I believe in two years' time,
00:40:10 Praveg could be higher than where it is right now,
00:40:12 based on the commentary and the earnings
00:40:14 that they're talking about.
00:40:15 But just that the valuations are so stretched,
00:40:17 and the numbers not getting delivered,
00:40:19 might see a bit of a pullback there.
00:40:20 - We've talked about this, where order wins are happening,
00:40:23 the challenge is going to be execution.
00:40:25 - Yes.
00:40:26 - And we are seeing it in the earnings.
00:40:27 So a few quarters out, right?
00:40:29 So while valuations are justified for order wins,
00:40:32 they still don't explain the kind of execution challenges.
00:40:36 - If we can pull up those graphics,
00:40:37 I don't know if we can, is this too much ask?
00:40:39 But if we can pull up those earnings,
00:40:40 because we put out the comparative valuations,
00:40:43 Chinmay Vazdev pulled out those valuations in that story.
00:40:45 If we just look at either price to book,
00:40:47 or price to earning, whichever you like, right?
00:40:49 Let's say, compare it to 10 year averages,
00:40:52 and budget for some bit of a uptick,
00:40:54 because last 10 years are not testimony
00:40:56 to what would happen ahead.
00:40:58 For PSUs, they have changed completely
00:40:59 under this current government.
00:41:00 But still, that's a gap of valuation is so high,
00:41:03 at some point of time, you feel that some of these stocks
00:41:05 need to see some bit of gravity.
00:41:07 - But I would argue today, this morning,
00:41:10 all of us spoke about notes and outlooks
00:41:12 on the Indian market overall, as premium, expensive,
00:41:17 valuations are high, but we still like it.
00:41:20 At some point, why would that not extend to the PSU path?
00:41:23 - How expensive is expensive, right?
00:41:24 - That's the only thing.
00:41:25 - I think that's the argument.
00:41:26 - Yeah, so at some point of time,
00:41:27 people will say that if BHEL is trading at whatever,
00:41:30 151 times price to earnings, is it expensive at 100?
00:41:35 Yes.
00:41:37 Is it egregious at 151?
00:41:38 Certainly.
00:41:39 So could it cool off a little bit?
00:41:40 So even if it does nothing,
00:41:42 just that the valuation multiple cools off
00:41:44 from 151 to 150, that's a 33% shame off.
00:41:47 I'm not saying it will happen, it could happen.
00:41:49 - When Morgan Stanley reports says what it says,
00:41:51 it also says private capex is on the pickup.
00:41:53 So are we saying that PSUs are the only ones
00:41:56 that can carry the bait in their hand?
00:41:57 You also have private sector,
00:41:59 India, that is gonna see a pickup, right?
00:42:00 If that doesn't participate,
00:42:02 all those numbers will go out of whack.
00:42:04 - But there's things that PSU companies are doing
00:42:07 that private companies are not necessarily
00:42:09 going to be able to do,
00:42:10 in terms of where government is spending its money.
00:42:13 So there is a bit of an advantage there.
00:42:14 - There are some sectors where the government has said,
00:42:16 I mean, defense, for example, right?
00:42:18 They've said that they want private companies to come in.
00:42:20 - It will always be hedged and it'll always be lesser
00:42:23 because it's such a sensitive sector,
00:42:24 you will not open it up completely.
00:42:26 But yeah, so a lot of conversation there.
00:42:30 - So is there business momentum?
00:42:32 Yes.
00:42:33 Are valuations expensive?
00:42:34 - Very.
00:42:35 - Very.
00:42:36 So therefore, could there be a case
00:42:37 wherein while business momentum continues,
00:42:39 valuations could just see a bit of a pull up?
00:42:41 - And maybe not a price correction.
00:42:43 At least a time correction is only,
00:42:46 and it's only healthy.
00:42:48 - It is very healthy.
00:42:49 - So more pain, more pain to come before you feel
00:42:52 maybe an upswing.
00:42:53 All right.
00:42:54 But a whole host of other numbers
00:42:55 that we're talking about this morning,
00:42:57 and more earnings on our radar,
00:42:58 we should talk about Bandhan Bank,
00:43:00 Campus Activewear and Tata Power,
00:43:02 some of those stocks that we mentioned,
00:43:04 but Bandhan Bank definitely will be hearing
00:43:07 from the management also ahead on the day.
00:43:09 Harsh, what can we add in terms of,
00:43:13 you know, what qualitatively these results look like?
00:43:16 - Well, Tamanna, in terms of,
00:43:19 let me first start off with Bandhan Banks.
00:43:21 It's a good solid set of numbers.
00:43:23 After a while, we've seen a back to back quarter
00:43:26 of good numbers coming in from Bandhan.
00:43:28 So that's one big positive.
00:43:30 And that reaction ought to,
00:43:32 that's how the reaction ought to be on the markets as well.
00:43:36 Of course, need to wait and watch for that reaction,
00:43:38 but 20% growth plus with regard to NII is quite solid.
00:43:42 They've guided for a seven to seven and a half percent
00:43:44 kind of a margin number,
00:43:45 which they've achieved in this quarter as well.
00:43:48 And the loan growth is in high teens.
00:43:49 So second consecutive quarter of loan growth as well.
00:43:52 So that's the other positive.
00:43:54 With regard to deposit growth as well,
00:43:55 there's good solid 14 and a half, 15 odd percent
00:43:58 of deposit growth,
00:43:59 which the bank has clocked in this quarter
00:44:01 on a year on year basis, of course.
00:44:03 And that's, there's nothing much to complain
00:44:06 about there either.
00:44:07 In terms of just the overall metrics,
00:44:10 you're seeing profit after tax, which has doubled
00:44:12 because provisioning has come off.
00:44:14 So the asset quality seems to be getting better,
00:44:18 even though NPA on the absolute GNPA side,
00:44:21 the number has actually inched up a little bit.
00:44:23 So that's one piece to watch out for.
00:44:26 And as we speak to management,
00:44:27 we'll try to break some of those numbers down.
00:44:29 So that's on Bandhan.
00:44:30 Let me quickly switch it over to Campus Active
00:44:32 because that one, again,
00:44:35 it's been a disappointing quarter here for campus.
00:44:38 Clearly, you've seen 1% on growth
00:44:40 when it comes to top line,
00:44:41 but EBITDA has really disappointed.
00:44:43 Even compared to street estimates,
00:44:46 that number is sharply lower.
00:44:48 And profit after tax is probably less than half
00:44:51 of what the street was really penciling in.
00:44:53 So possible negative reaction on this counter,
00:44:58 at the start of trade itself today
00:45:01 because of those poor set of numbers.
00:45:04 Last off, we have Tata Power, mixed kind of a bag there.
00:45:07 Overall, you're looking at revenue,
00:45:09 which is up roughly 3.5%,
00:45:11 and Pat, which is up 2.5%.
00:45:13 But we have a CLSA note,
00:45:15 we have a couple of notes which have come out,
00:45:18 city note as well.
00:45:20 And what it seems to be the case is it's a mixed quarter,
00:45:24 and it's going to be in terms of execution.
00:45:28 How the execution starts to play out for Tata Power
00:45:31 is going to be one of the key,
00:45:33 you know, monitorables that investors will look out for
00:45:37 going forward.
00:45:38 Right.
00:45:39 Thank you for that.
00:45:40 There will be a whole bunch of them.
00:45:41 We'll add the likes of Adorms,
00:45:44 Sri Lanka Sugar to the list,
00:45:46 MCX that will be reacting to their earnings today.
00:45:49 Well, Sudeep Shah, Deputy VP,
00:45:50 Head of Tech Derivatives Research at SBI Cap Securities,
00:45:53 joins in.
00:45:54 Sudeep, good morning.
00:45:55 Let's start with how do you feel about the Nifty?
00:45:58 We've spent the last few weeks consolidating.
00:46:01 This morning, while implied Nifty is indicating to a gap up,
00:46:06 do you think there could be follow on buying
00:46:08 that would emerge today in terms of direction
00:46:11 and trading range?
00:46:13 What is the call on the Nifty?
00:46:14 Good morning, Kamalna.
00:46:18 See, what we are seeing on Nifty is that last week,
00:46:21 on Thursday and Friday, Wednesday and Thursday,
00:46:25 we have seen markets witnessing some kind of a resistance,
00:46:28 closer to 22,000, 22,050 levels.
00:46:31 Now, this is exactly that same level
00:46:33 where there was a pending gap,
00:46:35 which was created on 16th and 17th of January.
00:46:39 And that is not able to,
00:46:41 Nifty is not able to cross it on a closing basis now.
00:46:45 So every time the markets are approaching that zone
00:46:47 of 22,000, 22,050,
00:46:50 there's some jittery moves
00:46:51 or some kind of selling pressure
00:46:53 from higher levels is visible.
00:46:55 So on the upside now,
00:46:56 I feel that 22,000 is a capped resistance as of now.
00:47:01 On the downside, the 10,
00:47:02 as well as the 20-day exponential moving average
00:47:05 of 21,650 to 21,730 zone now.
00:47:09 So this band is providing some kind of a decent support.
00:47:13 So all in all, I feel that markets still could continue
00:47:16 staying in this range between 21,600, 630 on the downside
00:47:21 and 21,950 to 22,000 on the upside.
00:47:25 And while GIFT Nifty is right now
00:47:28 leading at 70, 80 points positive opening,
00:47:31 which would imply 21,850, 21,870 as a possible open.
00:47:36 Again, at that zone,
00:47:38 I feel there could be some kind of a resistance
00:47:40 because 21,900 call writers
00:47:43 have also built positions aggressively on close on Friday.
00:47:47 So I feel that it's important
00:47:51 that we don't just rush into the trade
00:47:53 and we see whether the markets,
00:47:55 whether Nifty specifically sustaining
00:47:56 above this 21,900, 930 mark on the upside
00:48:00 for today's session.
00:48:01 - Okay, watch out.
00:48:05 So Sudeep, what about specific stocks for the day today?
00:48:09 - Good morning, Neeraj. - Very good morning.
00:48:13 - Yeah, I feel that cement stocks in the last week
00:48:17 was they're showing some kind of a positive momentum
00:48:20 and specifically if we see Grasim.
00:48:23 Now Grasim has closed at its almost highest level
00:48:26 post the consolidation since December.
00:48:29 So since 1st of December,
00:48:31 we have seen Grasim consolidating between 2,030
00:48:34 on the upside and 21,50, 21,60 on the upside, sorry.
00:48:39 So from current levels,
00:48:40 I feel that there could be a breakout in Grasim.
00:48:43 The daily, weekly, monthly charts
00:48:45 are hinting towards this same scenario.
00:48:47 A lot of other cement stocks
00:48:49 have also witnessed positive momentum.
00:48:51 So I feel all in all,
00:48:52 cement this week could outperform
00:48:54 and Grasim could be the leader of the pack.
00:48:57 And 21,20 could act as a strong support
00:49:01 which could be,
00:49:01 with which we could buy Grasim
00:49:05 with a stop loss of 21,20
00:49:06 for an possible upside of 22,50, 22,70.
00:49:11 The second stock would be Bank of Barodao.
00:49:14 Now we've seen PSU banks
00:49:16 showing strong momentum in the last week,
00:49:18 specifically Bank of Barodao, PNB, Union Bank.
00:49:22 So our topic is Bank of Barodao.
00:49:25 If we see the weekly charts,
00:49:26 last three weeks we have seen a higher top,
00:49:29 higher bottom formation in this stock
00:49:31 and post some kind of a corrective moment
00:49:34 from 260 to 245 where the stock retested
00:49:38 its 10-day exponential moving average.
00:49:41 Thereafter witnessed a strong pullback on the upside.
00:49:43 So we feel that there could be a continuation
00:49:46 of positive momentum on the upside
00:49:48 in case of Bank of Barodao.
00:49:50 And this could be bought with a stop loss of 256
00:49:54 and a target of 275 to 280 on the upside.
00:49:58 All right, you know, a lot of focus on banking.
00:50:02 Just a few more, if you have your eye on them, Sudip.
00:50:06 And this is Tamanna here.
00:50:07 So very good morning to you.
00:50:09 Bandhan, if you think there is some potential there,
00:50:13 PI Industries and Oro Pharma.
00:50:16 All three of them, news of results, et cetera.
00:50:19 And those reactions will come in,
00:50:21 but I'm curious to know how you see them on the charts.
00:50:23 Good morning, Tamanna.
00:50:26 See, what we're seeing on Bandhan is that
00:50:28 this stock has been a rank underperformer.
00:50:30 Now, even while we complain about HDFC Bank
00:50:34 being an underperformer or other private sector banks
00:50:38 being an underperformer in the last several months,
00:50:40 but still they have held on to their key support zones.
00:50:43 But in case of Bandhan,
00:50:45 every time the stock has moved to 250 to 55,
00:50:49 there has been a big sell off.
00:50:50 And once again, the stock is at the cusp
00:50:52 of an important support zone now.
00:50:54 Since last, if I'm not wrong, since last July,
00:50:59 there have been three retests of the zone of 210, 211.
00:51:04 Now, I feel that if 210 is taken out on this stock,
00:51:09 there could be a serious downside,
00:51:12 which could be up to 170 levels also.
00:51:15 So for me, 210 would be the key for Bandhan.
00:51:19 If 210 is taken out,
00:51:21 it could be a bigger downside that could open up.
00:51:26 The second stock which you were referring to,
00:51:28 PI Industries.
00:51:29 Now, PI Industries, in the last three months,
00:51:33 we've seen some kind of a decent correction
00:51:36 from 3,900 levels up to 3,200 levels.
00:51:39 And I feel the stock is not completely
00:51:42 on a negative momentum.
00:51:44 And in the last few days,
00:51:46 we have seen support zones around 3,250, 3,300
00:51:50 holding well.
00:51:51 And once again, the stock has now sustained above its 10,
00:51:54 as well as 20 day exponential moving average.
00:51:56 So I feel till the time 3,400, 3,420 holds on this,
00:52:01 we could see the stock at least moving up to 3,600
00:52:05 where the 200 DMAs place.
00:52:07 And if that is crossed and sustained,
00:52:10 then further upside also could not be ruled out.
00:52:13 Right.
00:52:17 Sudip, hi, it's Samina.
00:52:18 Good morning.
00:52:19 Just a quick one on Hero Motor Corp as well.
00:52:21 The stock has been on the radar.
00:52:23 Friday had a good day.
00:52:25 Earnings were also pretty impressive.
00:52:26 How would you trade Hero Motor this morning?
00:52:29 Good morning, Samina.
00:52:32 What we've seen in the interest of Hero Motor
00:52:35 is that this stock has been on a big uptrend.
00:52:39 Now in the last four months, starting November, 2023 now,
00:52:44 since it broke out of the consolidation range
00:52:48 that it was in October and November.
00:52:50 So from 30 to 80, the stock has grown,
00:52:54 has sustained above its 20 day exponential moving average
00:52:56 and has never broken even once.
00:52:59 So this 20 day exponential moving average,
00:53:02 as well as the 10 day also has been violated,
00:53:04 but it did not sustain below that for a longer time.
00:53:08 So I feel till the time this 4720 zone is guarded,
00:53:13 this stock could still continue outperforming
00:53:15 and we could see levels of 5,100, 5,200
00:53:20 in the next few sessions.
00:53:22 For any long positions that anyone would be having,
00:53:25 I feel a stop loss of 4720 would be a decent level
00:53:29 to hold this stock with.
00:53:31 All right, super.
00:53:33 Sudeep, stay on with us.
00:53:35 We're taking a very short break,
00:53:36 but a lot more stocks to discuss,
00:53:39 a lot more action before the markets open,
00:53:41 but even as we keep our focus on the markets,
00:53:44 good news this morning.
00:53:46 In a major diplomatic triumph for India,
00:53:48 eight veterans of the Indian Navy
00:53:49 who were sentenced to death in Qatar
00:53:52 were released by Doha today.
00:53:54 The capital punishment was commuted
00:53:56 to an extended prison time earlier
00:53:58 following diplomatic intervention by New Delhi.
00:54:01 The visuals you're seeing is of them arriving this morning,
00:54:04 early morning at the Delhi airport
00:54:06 after the release from Qatar.
00:54:07 This is a big deal because it was a hard fought
00:54:11 diplomatic negotiation with a friendly country,
00:54:14 but nevertheless, they have exceeded to this intervention
00:54:19 and these guys are back home.
00:54:20 So on that note, we'll take a very quick break,
00:54:23 but we're back in just a few minutes,
00:54:24 pre-open and a lot more when we return.
00:54:28 (upbeat music)
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00:56:44 (upbeat music)
00:56:49 (upbeat music)
00:56:56 - All right, back with India Market Open
00:57:03 right here on NDTV Profit.
00:57:05 We are in conversation with Sudeep Shah
00:57:07 on clutches which are doing well.
00:57:09 Sudeep, you've given us your views on some of the pockets
00:57:13 which might react today.
00:57:14 Just wondering, can the PSU index, the PSC index
00:57:19 or some of the PSUs take a bit of a down drift?
00:57:22 I don't know which ones do you track on the charts
00:57:24 but a view on the PSC index
00:57:26 and any of the PSUs that may have a view for
00:57:28 because they've come off a little bit
00:57:30 from the peak of last week.
00:57:32 - Let's see what we're thinking is that
00:57:38 if you see a stock like PowerCredit,
00:57:41 if you see stocks like NTTC,
00:57:43 they could still say hold on to their current levels
00:57:47 where they are trading at.
00:57:49 But a stock like say, REC, PFC,
00:57:53 where we have seen some kind of a serious liquidation
00:57:56 on Friday, say 5 to 8% anywhere they had seen the cuts.
00:58:01 So I feel those should be avoided
00:58:04 because see, they were the ones which were the first movers
00:58:07 and they've seen the biggest rallies.
00:58:10 So I think there could be some profit taking
00:58:12 which could be witnessed and overall on the CPSC index.
00:58:15 Is this now if we see the index which had broken out
00:58:21 about 3,900 levels on November 2nd.
00:58:25 Now, if you see that index,
00:58:26 that is not even breached,
00:58:27 it's a 20 day exponential moving average even once.
00:58:31 So, and as well as if you see
00:58:33 the 10 day exponential moving average now,
00:58:34 that is the shortest barometer of any,
00:58:37 for gauging any trend from a short term perspective.
00:58:41 Now, if that index also has been only violated once
00:58:44 and we have seen a pullback on the next day itself
00:58:47 when there were cuts in the month of January,
00:58:50 once or twice.
00:58:52 So from the current levels,
00:58:53 I feel while there could be debate
00:58:56 that this indices have rallied too much,
00:59:00 but I feel if one is a trend follower,
00:59:02 then at least that 10 day moving average,
00:59:04 which is around 5,600, 55, 80 on the downside,
00:59:09 till that is held,
00:59:10 one could still hold on to their existing positions.
00:59:13 I'm not recommending buying any fresh positions
00:59:16 at this current moment,
00:59:17 but any trailing stop losses one needs to keep
00:59:20 for this index,
00:59:21 then it would be around 55, 90, 55, 80 on the downside.
00:59:26 Once this level is violated,
00:59:27 then one could consider booking their profits
00:59:30 and at least wait for a significant dip
00:59:32 to re-enter the stocks.
00:59:35 - Okay, fair call.
00:59:35 So wait for a dip is what Sudeep Shah is recommending.
00:59:39 Now, by the way,
00:59:40 we may well classify today as a pharma day,
00:59:42 simply because of the constant amount of news flow there.
00:59:45 We've discussed the results, right?
00:59:46 There is Aurobindo Pharma,
00:59:48 there is Dewey's Lab amongst the large ones.
00:59:50 Then there is Jupiter Lifeline Healthcare.
00:59:53 There is Alchem Labs, Brokerage Notes,
00:59:56 and a bunch of others.
00:59:57 Something that has happened,
00:59:58 which may not necessarily move the needle on Loris Labs,
01:00:01 but it's a big win from a cancer treatment perspective.
01:00:04 The CAR T cell therapy,
01:00:06 which is done by Immuno Act,
01:00:08 a made in India CAR T cell therapy has been now tied up,
01:00:13 wherein Immuno Act ties up with Apollo Hospitals
01:00:16 for the rollout of this.
01:00:18 This could be a big move in cancer treatment.
01:00:19 I don't know if it really impacts Loris Labs today,
01:00:21 because remember,
01:00:22 Immuno Act is not a fully owned subsidiary
01:00:26 or a majority owned subsidiary of Loris Labs.
01:00:28 In case you see a reaction,
01:00:30 this could be the reason,
01:00:31 but please remember,
01:00:32 there is no EPS movement happening in the near term
01:00:35 because of this news.
01:00:36 But Deven Choksi is with us.
01:00:38 Deven, good morning.
01:00:40 Thanks for taking the time out.
01:00:41 Great having you.
01:00:42 Just wondering, I'm starting off with pharma.
01:00:44 We've discussed the index at length already.
01:00:46 Just starting off with pharma,
01:00:47 simply because of the kind of news flow
01:00:50 and the kind of results that have come in.
01:00:51 We've seen mixed views on Dewey's Lab, for example,
01:00:54 wherein some brokerages are saying
01:00:56 that the first quarter of margin expansion
01:00:57 and the worst is behind,
01:00:59 while some are saying that even if the worst is behind,
01:01:01 the good times to come are some time away,
01:01:03 and therefore we remain sellers.
01:01:05 So that is one.
01:01:06 Oro has resolved.
01:01:07 Some others have resolved.
01:01:08 I just spoke about Immuno Act.
01:01:10 What do you think about this space?
01:01:11 What stands out for you?
01:01:12 Hi, Neeraj.
01:01:14 Good morning.
01:01:16 Well, I guess I think the important point out here is few.
01:01:19 On one side,
01:01:20 namely the input cost-related issues,
01:01:23 I think which were haunting the pharma companies
01:01:25 in last two quarters.
01:01:27 I think they have by and large settled.
01:01:29 And more or less, I think these companies
01:01:30 have been showing their resilience
01:01:32 sort of I think the absorbing the cost is concerned.
01:01:35 To a greater extent,
01:01:36 I think they've been able to successfully pass on the cost,
01:01:38 both in CRAMS model, FBA model as well.
01:01:42 So from that perspective,
01:01:44 I think the margin protection is fairly, I think,
01:01:46 understood and visible going forward as well.
01:01:49 On the other side,
01:01:50 I think the efforts pertaining to the specialty
01:01:53 and mixing some of the pharma space,
01:01:54 I think have actually started yielding results.
01:01:57 And that's getting reflected
01:01:58 into some of the major numbers
01:02:00 which we have seen in these results so far.
01:02:02 So to a greater extent,
01:02:03 I think this is also creating a larger amount of,
01:02:06 I think, growth as far as I think
01:02:08 the earning outlook is concerned.
01:02:10 You mentioned about DVs and Loris.
01:02:14 I think these two companies remain absolutely
01:02:16 very, very convincing and promising.
01:02:18 Whatever I think has been the situation with them,
01:02:23 I guess I think the demand scenario
01:02:24 is now basically showing the signs of improvement.
01:02:27 Their customers are showing the commitment again,
01:02:29 I think, to lift the products.
01:02:30 So to a greater extent,
01:02:31 I would believe that I think the worst seems to be over.
01:02:35 Maybe it may not happen that in one quarter of that,
01:02:37 I think they'll start rising.
01:02:39 But both DVs and Loris,
01:02:40 I believe, I think it's a good model.
01:02:42 They should be, I think,
01:02:43 giving a reasonably good amount of size,
01:02:45 I think, going forward,
01:02:46 they're working in subsequent quarters.
01:02:49 So it would be more inclination towards
01:02:51 looking at the stock from the investment perspective
01:02:53 than to distal them from the portfolio.
01:02:55 - Okay, so that's the view on some of the pharma names.
01:03:01 Devin, the other aspect is the kind of disappointing results
01:03:07 that some of the PSUs have come out with.
01:03:09 Everything from,
01:03:11 you know, ONGC, fine,
01:03:12 but SJVN, Midhani, Shipping Corporation of India,
01:03:16 just very wobbly set of numbers.
01:03:18 There are some others like MCX,
01:03:19 which are in the private space,
01:03:20 which have come out with weak numbers,
01:03:21 but I'm talking about PSUs.
01:03:23 What do you do if you have these PSUs in your portfolio?
01:03:25 Let's say you got lucky,
01:03:26 or let's say you were smart and you bought them earlier,
01:03:28 you were riding on some great gains.
01:03:30 Would you book those gains on the back of these numbers,
01:03:32 or would you stay long?
01:03:33 - I think these numbers of the PSUs,
01:03:37 I think I'm always very skeptical
01:03:39 about this number sustaining.
01:03:41 Largely because of variety of the facts
01:03:43 that we reach in every companies.
01:03:45 On one side, the market is dumb about the story
01:03:47 about the PSUs.
01:03:49 I am not doubting the potential of these companies,
01:03:52 but the few minutes that I think
01:03:53 the inherent nature of the business
01:03:55 won't allow them to scale up the business
01:03:57 in a manner in which market anticipates.
01:04:00 With oil marketing, oil refining company,
01:04:02 oil exploration company,
01:04:03 even for that matter, metal and commodity companies,
01:04:06 I think each one of them would have limited ability
01:04:09 to create the upside in the working of the company.
01:04:12 Having got, I think,
01:04:13 despite of having got the huge amount of potential.
01:04:16 So that is a realization that remains very, very clear.
01:04:19 And that is one of the reasons for which I think
01:04:21 these companies have been up till now
01:04:22 put at a valuation,
01:04:23 which was comparatively weaker compared to the peers
01:04:26 in the private sector.
01:04:30 I think that story is unlikely to change beyond a point.
01:04:33 Neither of these companies, I think,
01:04:35 which are likely to, I think,
01:04:36 show dramatic improvement in the stock price.
01:04:39 So if the market price probably moves up in a hurry
01:04:42 because of the higher potential,
01:04:44 then it would be a case for sale.
01:04:46 As of now, I think we'll have to ride that particular wave.
01:04:49 Wherein I think the more amount of money
01:04:51 is chasing PSU companies,
01:04:52 and that is the reason for which I think
01:04:54 these stocks are rallying.
01:04:55 Given the kind of higher amount of rally possibilities,
01:04:59 I would think that I think one will have an inclination
01:05:01 to look at these companies from the selling point of view
01:05:03 if the working is not catching up.
01:05:04 So wait a while before you start booking your profit.
01:05:08 That would be my approach on this particular stock.
01:05:11 - Right, Deven, as we are, of course,
01:05:15 gearing up for trade this morning,
01:05:17 lots of stocks that are going to be reacting to earnings.
01:05:20 But I'll quickly come to you on auto.
01:05:24 So Hero Motor Corp, Tata Motors,
01:05:27 two outliers in terms of earnings and stock performance.
01:05:30 Way ahead, what are you making of both of them?
01:05:33 - Again, I think the best of the times in which they are,
01:05:39 and they have entered into.
01:05:41 I believe on one side,
01:05:43 we have the consumer having the power to spend money.
01:05:46 On the other side,
01:05:47 we are expecting the interest rates to come down
01:05:50 in next three, four quarters from here onwards.
01:05:53 So it is again going to help
01:05:55 to get higher amount of buying power.
01:05:57 And at the same time,
01:05:58 I think the input cost is remaining under control
01:06:01 for most of these companies,
01:06:03 largely because of the commodity prices are remaining
01:06:05 largely settled at this point of time.
01:06:08 Given higher demand, given lower input costs,
01:06:11 and given the ability of Indian auto companies,
01:06:14 be it in four wheelers, be it in two wheelers,
01:06:16 they have got a fantastic time ahead.
01:06:19 Say for example, commercial vehicles.
01:06:21 Say for example, buses, electric vehicles within that.
01:06:25 I believe that I think the new generation of demand
01:06:27 is happening in this area of activity.
01:06:30 And that's where I think one remains absolutely very convinced
01:06:32 and remaining interested into this process.
01:06:35 I think that some of the companies have run up a bit more,
01:06:39 but correction in the price could mean a buying opportunity.
01:06:42 As of now, I think we believe
01:06:43 that as much as they invest in auto,
01:06:46 and maybe pick up some of the good quality auto
01:06:47 and see like stocks in the portfolio.
01:06:49 - Sudeep, let me come to you on some of the banks
01:06:55 and PSB banks specifically,
01:06:58 anything that you like over here going forward.
01:07:01 You know, that whole cut which came
01:07:03 in public sector companies,
01:07:05 PSB banks were still relatively secure.
01:07:08 What would you want to accumulate at this point?
01:07:11 - Within the PSU banking space,
01:07:16 there are clearly two sets of banks that you feel,
01:07:19 one is the Bank of Baroda, Scandina Bank,
01:07:22 PMBs, Union Bank.
01:07:24 But on the other hand of the spectrum,
01:07:26 there is Bank of Maharashtra, then PSB,
01:07:30 or a whole lot of other banks.
01:07:32 So within both the segments,
01:07:37 from the first segment, we feel that Bank of Baroda
01:07:39 as well as PMB could continue doing well
01:07:42 in the next few sessions to come.
01:07:45 And also a stock like Bank of Maharashtra also,
01:07:49 we feel that that would really do well from here on also.
01:07:52 Because see, after a decent amount of consolidation
01:07:56 between September and January,
01:07:59 the stock had broken out of 50 levels on the upside.
01:08:04 And once again, it has retested
01:08:06 its 10-day exponential moving average
01:08:07 and witnessed a bounce back on Friday from the same levels.
01:08:11 So I feel this stock would continue doing well.
01:08:14 And also if you see the last few quarterly numbers
01:08:17 of Bank of Maharashtra, they have been really good.
01:08:20 So here, this is a case of the valuations
01:08:23 also supporting the stock price,
01:08:24 the results also supporting the stock price.
01:08:27 So I feel that within the entire PSU banking gamut,
01:08:33 Bank of Baroda, then PMB,
01:08:35 as well as Bank of Maharashtra would be our top picks.
01:08:38 - Okay, and the pre-openers will settle
01:08:41 in just a moment from now,
01:08:42 but have to mark the other big view
01:08:45 that has come in on India.
01:08:47 And that is the Morgan Stanley note
01:08:48 that is coming from Jonathan Garner this morning,
01:08:51 wherein he says that India is the top EM pick.
01:08:56 The premium valuations will be driven
01:08:59 by superior fundamentals.
01:09:01 I think that's the key point
01:09:03 that Jonathan Garner and team are making
01:09:04 that we know valuations are expensive,
01:09:06 but the fundamentals are superior.
01:09:08 We'll get the other views from them.
01:09:09 They expect structural outperformance of India in 2020s
01:09:14 is what the note says.
01:09:16 So it's not just for the next one year,
01:09:18 possibly for the rest of the decade.
01:09:19 The outperformance on nominal GDP,
01:09:22 CapEx and digitalization agenda are the key factors
01:09:26 that will probably drive this outperformance.
01:09:29 Remember, India is not the only one.
01:09:30 They also speak about Japan as being a preferred Asia pack,
01:09:32 a play, but India certainly out there within Asia
01:09:35 and within EMs as one of the top ideas.
01:09:38 And they expect financials and industries
01:09:41 to recover in 2024.
01:09:42 Now, this is the big thing.
01:09:43 Institutional investors, Jonathan Garner has a pulse
01:09:45 on what institutional money could do.
01:09:47 If insti money comes back,
01:09:49 then certainly financials and IT will benefit quite a bit.
01:09:51 So can this happen is the question,
01:09:53 but when Morgan Stanley says you pay attention.
01:09:55 And the last point, it says India,
01:09:58 expect India to be the key driver
01:09:59 for global growth in 2020s.
01:10:02 So independent of what the targets are guys,
01:10:04 but just the fact that there's Morgan Stanley coming out
01:10:06 and saying that, hey, take notice.
01:10:08 We believe India still remains our top pick.
01:10:10 I think that is a really big statement, Samina.
01:10:15 - Right, that is Morgan Stanley on India,
01:10:17 very, very optimistic.
01:10:19 The bulls on the street are definitely
01:10:21 gonna be excited about this.
01:10:23 Got a couple of minutes to go as we gear up for trade.
01:10:26 Sudeep, very quickly on oil and gas stocks,
01:10:29 they've also had and drawn quite a bit of trader attention
01:10:32 in the last couple of weeks.
01:10:34 This morning, of course,
01:10:34 we're coming to disappointing numbers from ONGC.
01:10:37 How would you trade your upstream and downstream companies,
01:10:41 if at all you trade them?
01:10:42 - What we've seen in case of ONGC is,
01:10:49 firstly, just coming to ONGC,
01:10:51 ONGC had rallied from 230 to almost 270.
01:10:55 And on Friday, they've taken support at 259 to 260,
01:11:00 and they just submitted a bounce back.
01:11:03 So I feel that these last three, four days,
01:11:05 low of 259, 258 levels would be a crucial zone
01:11:10 to watch out for.
01:11:12 If at all ONGC opens lower and sustains below this level
01:11:16 of 260, 259, then the profit making could take the stock
01:11:21 down to 248 levels.
01:11:23 So I would not go long,
01:11:26 at least for the first 30 minutes,
01:11:28 just watch out for the stock reaction there.
01:11:30 And apart from ONGC,
01:11:32 one stock which has been doing well is Oil India now.
01:11:36 So Oil India is a big uptrend.
01:11:39 Last few sessions,
01:11:40 we have seen higher top, higher bottom formations also
01:11:44 on the daily as well as on the weekly charts also.
01:11:46 So while there is some weakness visible in ONGC,
01:11:50 there is strength visible in Oil India.
01:11:52 And also if you see Reliance,
01:11:54 now this stock also has seen a fair bit of buying
01:11:58 in the last few days from the lows of 28, 60, 28, 70 levels.
01:12:03 And in a way that this stock has been instrumental
01:12:06 in holding out Nifty also in the last few sessions.
01:12:09 So I feel from positional perspective,
01:12:12 Oil India and Reliance would be our top picks
01:12:14 and ONGC should be on a wait and watch mode.
01:12:19 - Just a quick word from Deven on ONGC.
01:12:23 And Deven bhai, if you track SJVN as well,
01:12:26 SJVN also down a fair bit on the back of numbers pre-market,
01:12:30 nearly 11% ONGC looking like it's set for a weak start.
01:12:34 Any take on this space and the sense
01:12:37 that perhaps valuations have run ahead of performance here?
01:12:41 - Absolutely.
01:12:43 I guess I think the price is physically moving
01:12:47 quite ahead of the potential.
01:12:49 As I was making a point a while back,
01:12:51 the potentials of ONGC, Oil India,
01:12:55 all marketing companies would be extremely high.
01:12:58 At the same time, I think the kind of renewable
01:13:01 in the green hydrogen foray that is now in making,
01:13:05 I think is going to give significant amount
01:13:07 of upside potential to these companies.
01:13:10 But one must remember well that I think
01:13:12 these are not the businesses that we should get scaled up
01:13:15 in a nonlinear fashion.
01:13:17 I think they will only get scaled up,
01:13:18 I think, in the growth in the economy.
01:13:20 It cannot be scaled up, I think,
01:13:21 with the way in which market euphoria gets created.
01:13:26 So I'm very clear about it,
01:13:28 that great businesses, great potential.
01:13:31 Don't expect, I think, too much of number game play
01:13:34 as far as I think these companies are concerned
01:13:35 on a quarterly basis.
01:13:37 Stay invested if you hold these companies.
01:13:39 However, I think if you don't,
01:13:41 I think wait for better opportunity
01:13:42 to buy into the portfolio.
01:13:43 - So, you know, wait and watch.
01:13:46 If you want to buy in, if you are holding,
01:13:48 then perhaps you'll have to hang on for a bit for now.
01:13:53 But in the entire power space, Devenbhai,
01:13:56 if you could come in on that as well,
01:13:57 because you're going to see Tata Power
01:13:59 also perhaps with a weak sort of opening this morning
01:14:04 on the back of numbers and that same sense
01:14:07 that perhaps it's become overpriced
01:14:09 and run ahead of valuations.
01:14:11 Do you think that the power energy space
01:14:13 is something that you keep a distance from now on,
01:14:16 or you see at least some sparks over there,
01:14:18 some potential there?
01:14:19 - Again, I guess I think the fundamental approach
01:14:23 we've been seeing on this particular case,
01:14:25 that you have economy growing at inflation
01:14:29 for GDP growth rate of around 11 and a half, 12%.
01:14:32 And on that growth rate,
01:14:34 I think the industry is also showing
01:14:36 a corresponding growth of 15% plus kind of a growth.
01:14:40 When we are seeing this kind of a growth,
01:14:43 electricity, for say, as a utility,
01:14:45 cannot be growing faster
01:14:47 than what the industry of growth is.
01:14:49 So it will also consume or get, I think,
01:14:51 grown on the particular subject,
01:14:53 I think with the same rate of growth.
01:14:56 Now, if you start giving the valuation
01:14:58 of 2027, 2028, and 2024,
01:15:02 then probably I think you will have to face the problem
01:15:04 because I think these stocks will not perform.
01:15:06 They will basically, I think, have a time correction
01:15:09 apart from having the price correction.
01:15:11 So to a greater extent,
01:15:12 I think this is a situation happening
01:15:13 in one and another company.
01:15:15 One of the reasons for which this is happening
01:15:17 is because infrastructure play,
01:15:18 people do want to buy in India, definitely for sure.
01:15:21 And that should be the case for most of the insurance
01:15:23 from the pension companies,
01:15:24 how are in front to buy into the infrastructure.
01:15:27 However, when I think the other than this player
01:15:29 who buy into the infrastructure
01:15:30 and they buy into the utility places,
01:15:33 probably I think they are buying expensive.
01:15:35 In my view point,
01:15:36 I think one has to rationalize the buying
01:15:38 into the infrastructure companies, utility companies.
01:15:42 In a systematic manner,
01:15:43 one should buy when the market gives opportunity
01:15:45 to the corrected levels.
01:15:47 I believe that power store in India is remaining strong.
01:15:50 However, the valuations are run up ahead of time.
01:15:52 - Valuations ahead of time.
01:15:55 And I think that's been Devyan's grouse
01:15:57 for a lot of pockets this morning.
01:15:59 So bear that in mind, important opinion.
01:16:01 20 seconds left for the markets to kickstart trade.
01:16:03 Stay on, gentlemen.
01:16:04 We'll take in opening thoughts from you
01:16:05 and then let you go.
01:16:06 But looks like we'll have a flattish start today.
01:16:10 Nothing untoward on the index, maybe,
01:16:13 but a lot of specific pockets,
01:16:15 particularly PSUs, maybe some pharma names
01:16:17 could be in focus in terms of movement.
01:16:20 But let's highlight the big boys on open first.
01:16:23 And here are the first trades.
01:16:25 21,800, hardly anything to write home about.
01:16:29 Flat for the Sensex.
01:16:31 Let's look at banks.
01:16:33 Again, flattish move, no changes there.
01:16:35 Our mid caps and small caps doing the same.
01:16:37 It's a quiet morning, you have to admit.
01:16:40 Nothing great.
01:16:41 I wonder if there is any point in showing the heat map.
01:16:43 There is, we'll show it.
01:16:44 And then Tabanna and Samina will highlight
01:16:46 the broader end of the spectrum.
01:16:47 Dr. Reddy's up 2%.
01:16:49 Divi's, well, the margin uptick gains prominence
01:16:54 over the no so many triggers
01:16:59 over the near term argument for now.
01:17:02 But Dr. Reddy's up 2.5%.
01:17:03 Wonder I've missed something out there.
01:17:05 But the top gain on the index, UPL comes back.
01:17:08 Well, it seems like a clutch of stocks
01:17:10 which have not been performing are going up.
01:17:12 IT is right up there, by the way.
01:17:15 HCL Tech, Wipro, Infi, LTI, Tech Mahindra.
01:17:18 All five in the top list, except for TCS,
01:17:20 which actually reached all time highs last week.
01:17:24 Everything else is in the green.
01:17:26 TCS must be somewhere there, yeah, the 11th stock.
01:17:28 Even Stevens between the losers and the gainers.
01:17:30 What's losing out?
01:17:31 Hedo Motocorp, 3% lower.
01:17:33 Just in line with estimates.
01:17:34 Maybe that is what disappointed, I don't know.
01:17:36 ONGC reacting, not so much, but reacting duly to results.
01:17:41 Power Grid has had an iffy up one day, down next day
01:17:44 kind of a week.
01:17:45 Last week in the results piece,
01:17:47 and it starts off as one of the top losers as well.
01:17:51 Aside of that, not too much.
01:17:52 Maybe the action is in the broader end of the spectrum,
01:17:54 but hey, Divi's Lab, 1.8%, Tamanna highlighted it.
01:17:59 I thought the brokerages were negative,
01:18:00 but for now, that view seems to be winning.
01:18:03 Divi's Lab up about 2% in trade, Tamanna.
01:18:05 - Absolutely, we called it this morning.
01:18:06 So Divi is definitely doing well.
01:18:09 The pharma sector, you know, having a good day.
01:18:12 But dava and daru.
01:18:14 So let's talk about United Breweries now
01:18:17 as we move in to some of the stocks that have had,
01:18:21 you know, a result flow coming in and were on our radar.
01:18:25 UBL down 2% in open trade.
01:18:27 So the numbers didn't seem bad, but ahead of elections,
01:18:30 there is a bit of a risk.
01:18:31 At least that's how Citi looked at it.
01:18:34 They say profitability could also be volatile
01:18:37 and earnings estimates were cut by 8%
01:18:40 for the full financial year.
01:18:42 So that stock now seeing a pretty bumpy start.
01:18:46 Apollo Hospitals though had good reviews all round.
01:18:50 Brokerages were bullish,
01:18:52 but in a market that isn't in a great mood today,
01:18:55 you're seeing a tepid response to Apollo Hospitals.
01:18:57 Overall numbers weren't bad at all, to be honest.
01:19:00 Honasa is the other one that is on our list
01:19:03 and we'll be speaking to the management ahead as well.
01:19:06 Honasa on the face of it, numbers look great
01:19:08 and the market is rewarding it as well.
01:19:11 About 6.5-7% up.
01:19:13 Sri Renuka, poor numbers.
01:19:15 SJVN, very poor numbers.
01:19:17 And all of that impact this morning.
01:19:19 Earnings impact leading the big movers on the markets
01:19:24 and you're seeing that completely play out.
01:19:26 Sri Renuka, definitely a disappointment.
01:19:29 In fact, JM Financial has set for SJVN,
01:19:33 a target price of quite low,
01:19:37 very low, almost 49% less is their target price for SJVN.
01:19:41 Just startup powers, the other one that we will look at.
01:19:44 Again, results which weren't very, very exciting.
01:19:46 A sell call coming in here, overvaluation concerns
01:19:49 and that stock about 3% down.
01:19:52 So most things on my list,
01:19:54 Samina down in the red this morning.
01:19:55 Are you seeing spots of green?
01:19:57 - Green, we know what's happening.
01:19:59 Tamanna, interestingly, we usually see big gains
01:20:01 across the broader markets
01:20:02 and they may be limited to a few stocks.
01:20:04 But this morning, we're not even getting that.
01:20:06 The biggest gain in terms of percentage
01:20:09 in the Nifty 500 is E strip and it's not a very big gain.
01:20:14 It's up about 3.5%.
01:20:15 So no runaway rally in terms of earnings reaction
01:20:18 this morning.
01:20:19 E strip is up 3.5%.
01:20:21 They've talked about,
01:20:22 and this is not even regarding earnings, right?
01:20:24 They've talked about opening a five-star hotel in Ahodia
01:20:27 and that is what is driving the stock up this morning.
01:20:30 Apart from that, Aurobindo Pharma,
01:20:32 that has already been in talk.
01:20:34 We've talked about this one,
01:20:35 very strong set of earnings from the company.
01:20:38 The reaction is good.
01:20:39 It's not a runaway rally in Aurobindo.
01:20:41 3% gains on Aurobindo Pharma after the company posted
01:20:45 record profits and highest ever margins
01:20:48 of over 20% since December, 2021.
01:20:51 So you've got Birla, you've got Birla Corp as well,
01:20:54 that's up 4%.
01:20:55 E strip, Aurobindo Pharma, like I mentioned.
01:20:57 DV's Laboratory as well,
01:20:59 if you can take a look at how that stock is doing,
01:21:00 up 2.5%.
01:21:01 Neeraj of course highlighted that a few minutes ago.
01:21:04 Godrej Industries, if we can get that one up,
01:21:06 it should be helpful to see how the count is reacting
01:21:09 to its earnings.
01:21:10 It's a thumbs down on the stock,
01:21:11 1.5% off on the stock.
01:21:13 BB Fintech, we took you through what the brokerages
01:21:15 have to say.
01:21:16 They largely seem quite excited about the company
01:21:18 on back of those brokerage upgrades.
01:21:20 The stock trades the gain of 2.5%.
01:21:22 Along with that, 197 Communications,
01:21:24 seeing a little bit of buying this morning,
01:21:26 2.5% up move on the counter,
01:21:28 but still struggling at levels of 430 in today's trade.
01:21:32 Well, apart from that,
01:21:34 there are lots of earnings reaction.
01:21:35 I'll quickly take you through those.
01:21:36 If we can pull up Bandhan Bank, Dish TV,
01:21:39 PI Industries.
01:21:40 So as you fire the stocks, we'll talk about that.
01:21:42 Bandhan Banks, that's an earnings reaction.
01:21:45 Dish TV, PI Industries, IRFC, weak numbers there.
01:21:49 The market seemed disappointed.
01:21:50 PI now posted a good quarter,
01:21:52 but the stock is down a percent.
01:21:54 IRFC is trading down with a cut of 2.5%, 3%.
01:21:58 Parag Milk, that's the other one, 4% lower,
01:22:01 4% higher on that stock,
01:22:02 4.5% higher on that stock is what we have.
01:22:05 MCX, numbers weren't great.
01:22:08 The stock does look a little weak in trade this morning,
01:22:10 2.5% on this one.
01:22:12 Shri Renuka Sugar, if I can get that one too on the screen,
01:22:15 it should be helpful to understand
01:22:17 what is happening to Shri Renuka Sugar.
01:22:19 Weak numbers, the stock is down about 2% percent.
01:22:21 Inox Win, Inox Win Energy, Wind Energy, Vishnu Prakash,
01:22:25 all those are going to be earnings reaction.
01:22:27 Inox Win is up 3.5%.
01:22:29 Inox Win Energy, on the other hand, is trading flat.
01:22:32 Vishnu Prakash, Doms, Celo, Landmark Cars
01:22:36 are some of the other names.
01:22:37 And I'm guessing Neeraj and Tamana
01:22:38 will continue with their list,
01:22:39 but lots of earnings reaction.
01:22:41 But what is, I don't know whether Neeraj,
01:22:43 you know what's happening, but Aarti Industries,
01:22:46 I know those brokerages were quite optimistic.
01:22:48 We are seeing a turnaround on the company,
01:22:51 but also you've got Birla Corporation
01:22:53 that jumped out of nowhere, 3.5% gain this morning.
01:22:57 - Cement Rally maybe.
01:22:58 - Maybe that, okay, that's probably what it is.
01:23:00 - Yeah, but just one stock I want to mark is LIC.
01:23:04 Now, the stock is up about 3% today.
01:23:07 Maybe some income tax refund,
01:23:08 JP Morgan upgrades the stock price target as well.
01:23:11 So after seeing one dip, while PSUs are iffy,
01:23:15 Life Insurance Corporation of India
01:23:17 has done remarkably well, 2.5% or 3% higher
01:23:20 in trade this morning.
01:23:23 Initial thoughts from our experts.
01:23:25 LIC, Devane, if somebody wants to look at insurance,
01:23:30 is LIC a good option or is something else better?
01:23:34 Or you want this back completely?
01:23:35 - Well, LIC remains, I think,
01:23:38 absolutely very convincing option.
01:23:40 No questions asked on this aspect.
01:23:42 On one side, we have a fantastic amount of demography reach
01:23:45 that we have created.
01:23:46 That's unparalleled to any other insurance companies.
01:23:50 At the same time, I think adapting to digitization
01:23:53 to further expand the reach is another important point.
01:23:57 What I like most about this business
01:23:58 and the profitability is that they are all creating
01:24:00 the micro-insurance products.
01:24:02 And that is going to create the same amount of effect
01:24:04 I think which the AMC, the mutual funds have created
01:24:08 by way of SIPs.
01:24:10 So from that particular perspective,
01:24:12 I think the potential remains absolutely very convincing
01:24:14 and very strong.
01:24:15 And LIC remains absolutely very convincing.
01:24:18 At the same time, I think we also look at
01:24:19 the investment portfolio of LIC.
01:24:22 This is where I think probably I think my eyes are on.
01:24:24 Some of the best quality stocks are held in the portfolio.
01:24:28 And if I consider that India's market capitalization
01:24:30 is moving from $4 billion to $10-12 billion in 2035,
01:24:35 one company which will get phenomenally benefited
01:24:37 in the next 10 years would be LIC.
01:24:39 So from all this perspective, apart from the business,
01:24:42 I think the investment, they remain, I think,
01:24:45 very strongly as far as the balance sheet of LIC is concerned
01:24:47 or the shareholders as well.
01:24:50 - Lawrence Pack in focus definitely,
01:24:52 but LIC the star of that show,
01:24:55 even if you look at the others, GIC, et cetera,
01:24:57 and see what they're doing.
01:24:58 Sudeep, any thoughts of LIC?
01:25:01 A cracker of a quarter,
01:25:03 and the outlook on the stock has changed.
01:25:05 It took a while to even get to its IPO price.
01:25:08 Do you see a sustained breakout there?
01:25:11 - Yes, I do see because it really,
01:25:17 it has taken a lot of time for it to come back
01:25:21 to its IPO price.
01:25:22 But once it has taken that out,
01:25:24 we have seen a big rally on the upside.
01:25:25 And I feel that this is just a start
01:25:28 after a big consolidation.
01:25:30 So all of that would be intermediate dips in between,
01:25:34 but overall, this stock is on a strong footing
01:25:36 compared to all other insurance stocks.
01:25:39 And I feel from these levels also,
01:25:41 all on dips, minor dips from here on,
01:25:44 they should be added from a medium term
01:25:47 to long term perspective.
01:25:48 Even from a trading perspective,
01:25:50 the trend is firmly on the upside.
01:25:52 So overall, I feel till the time 1040, 1050 levels are held,
01:25:57 this stock could continue its upwards momentum
01:26:01 up to 1250, 1270 in the next few weeks to come.
01:26:06 - Sudeep and Devane, those are a few questions
01:26:10 that you've answered for us.
01:26:11 But very quickly, Sudeep,
01:26:13 I have to ask you any trade that you've picked up
01:26:15 since markets have opened,
01:26:17 any reaction that has caught you by surprise
01:26:19 that you would then trade on this morning,
01:26:21 maybe intraday also?
01:26:22 - See, a couple of stocks,
01:26:26 one is Birla Corp now.
01:26:29 When we were at the beginning of the show,
01:26:31 we discussed Grafton as a top pick from the cement stock.
01:26:35 We've seen Birla Corp showing strong moves
01:26:38 in the last few sessions.
01:26:39 And even post today's opening,
01:26:42 there are a lot of mid-caps
01:26:43 or a lot of other stocks are witnessing pressures.
01:26:46 But this stock is gaining from strength to strength.
01:26:48 So I feel that this should be on investors
01:26:51 and traders' radar.
01:26:52 And this could do well in the next couple of sessions
01:26:55 also on Birla.
01:26:56 - Pfizer, Zydus Life, all of them having a good day.
01:27:01 Positive reports over there.
01:27:02 A stock we haven't marked is 197.
01:27:04 We mentioned it in our pre-open
01:27:07 that there might be some relief over there
01:27:09 coming in for Paytm.
01:27:10 We broke the story that there is going to be an extension
01:27:13 perhaps on the 29th Feb deadline.
01:27:16 From the point of view of allowing customers
01:27:18 to pull out what they need to from the Paytm Payments Bank.
01:27:21 But there has been a positive reaction on that.
01:27:25 Thank you so much, Sudeep and Deepak for joining us today.
01:27:28 We're gonna take a very quick break,
01:27:30 but on the other side,
01:27:31 we speak with Chandrasekhar Ghosh of Bandhan Bank
01:27:35 to talk about the company's Q3.
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01:31:18 - Hello and welcome to NDTV Profit.
01:31:30 You're joining us on Earnings Edge.
01:31:31 And today we're discussing the Bandhan Bank Q3 numbers
01:31:36 which came in a little while ago.
01:31:38 So Bandhan Bank, of course, has reported a 730 odd crore
01:31:44 worth of net profit.
01:31:45 This is more than double of what it reported last year.
01:31:49 Of course, on the profit growth is largely being aided
01:31:53 by an improvement on the provisioning side.
01:31:55 The provisioning has been lower during
01:31:57 the current quarter, December quarter, compared to last year.
01:32:02 If you look at the operating profit side, of course,
01:32:04 there's been a bit of a dip and this is largely coming in
01:32:07 due to the operational expenses.
01:32:09 I have with me Mr. Chandrasekhar Ghosh,
01:32:11 the MD and CEO of Bandhan Bank.
01:32:12 Mr. Ghosh, welcome to this conversation.
01:32:15 My first question, sir, is with regard to this OPEX number.
01:32:18 Now the operating expenses have gone up year on year,
01:32:22 as well as quarter on quarter.
01:32:23 If you could just tell us what exactly has happened
01:32:25 during the December quarter to push this up.
01:32:28 - Thank you to given this opportunity to share on that.
01:32:34 Of course, there is an operational cost
01:32:39 a little bit is increased.
01:32:40 We are looking on that the operational expenses on asset.
01:32:45 So if we see that the operational expenses on asset,
01:32:50 it was in that the 3.5%, it was in the first quarter,
01:32:55 second quarter, it was as come to the 3.7.
01:33:01 Again, it has come down in the third quarter 3.6.
01:33:05 So we feel that it is in a range of our prediction on that
01:33:10 in the 3.5 to 3.7% in that operational expenses
01:33:15 on advanced assets.
01:33:18 Second point on that, you know that this the quarter
01:33:23 we are new IT system have been introduced.
01:33:28 We are transformed from the old CBS to the new CBS
01:33:32 and other many of the application we are introduced.
01:33:35 So it has been also a little bit cost has come.
01:33:38 The last couple of quarters we have been increased
01:33:42 the 500 to the new branch open.
01:33:45 We are also given that the number of good number
01:33:49 of employees to them, those branches to serve on that
01:33:54 to the customer.
01:33:55 So these are also have been also taken
01:33:59 some of the cost of operation has increased.
01:34:03 And I hope that it is not we are looking
01:34:05 as a cost of operation.
01:34:08 I am looking it in a cost of investment
01:34:11 and that investment will give the future business growth.
01:34:14 We have been planned on that and that will be like
01:34:18 to where we are looking it on that.
01:34:21 Okay, coming to the core business front now,
01:34:24 NII has grown strongly during the quarter.
01:34:27 But if you look at your net interest margin front there again,
01:34:31 there's been a bit of a stabilization.
01:34:33 I just want to get a sense as to what is happening
01:34:36 on the core business front because your loans are growing
01:34:38 about 18 and a half percent and deposits are growing close
01:34:41 to 15 odd percent.
01:34:43 This how is this operational sort of improvement helping
01:34:48 as far as your net interest margin is concerned
01:34:50 and your overall business growth is concerned, sir?
01:34:54 If I say that the operationally the banking industry today,
01:35:01 sorry, there is a cost of fund has increased
01:35:05 because of the deposit rate is increased
01:35:07 and the liquidity is very tight in the market.
01:35:10 And that is the one cost has come to every bank on that.
01:35:14 So that is the one part.
01:35:16 But other part is there because of the quality
01:35:20 of the portfolio is increased.
01:35:22 And so that is in there's a sleep is point of view
01:35:26 and the provision point of view,
01:35:28 which has come to control that have been taken on that
01:35:32 the both the side are managed on that the name.
01:35:38 And I saw that the name in the bank are maintaining 7.2%
01:35:43 in the last quarter and this quarter also 7.2%
01:35:48 which was the last year is a 6.9%.
01:35:52 So better than that.
01:35:53 So we feel that it is a good name on that
01:35:57 to it is a cost of fund little bit in this
01:36:00 but other efficiency also help us to maintain this 7.2%
01:36:05 of the name and we feel that the next also quarter
01:36:10 we can be like to maintain on that the 7.7, 7 to 7.5
01:36:16 as per our guidance.
01:36:18 Your gross NPA ratio at about 7%.
01:36:21 I just want to get a sense as to what the outlook is looking
01:36:24 like for Bandhan Bank.
01:36:26 This quarter the net slippages are lower gross slippages
01:36:31 slightly higher, but this is primarily being adjusted
01:36:34 because of a sale to NPA that you didn't do in the quarter.
01:36:37 I wanted to know what the outlook on asset quality is
01:36:40 gross NPA trend.
01:36:42 What is that looking like?
01:36:45 What we saw that in the data showing that that is
01:36:49 in we have been seen that also collection efficiency
01:36:53 has come 99%.
01:36:55 That is a one side is there.
01:36:57 Other side we saw that there is a measure of the portfolio
01:37:02 which are shown as an NPA is an earlier because of pandemic.
01:37:09 After that if you see the this is the portfolio DPD SMA 012
01:37:16 and DPD has now has come 3.4% SMA 0 is a 1.5%
01:37:24 SMA 1 is a 0.9% SMA 2 is a 1% and what we see that
01:37:32 it has been 3.4% has come to this quarter,
01:37:37 which was in the last quarter 3.4.8%.
01:37:42 So I saw that this has been come down.
01:37:45 If I go to this the first quarter it was in a 5.6%.
01:37:49 So every quarter it has come to 1% and the during that period
01:37:56 that will be given the comfort on that it is gradually
01:37:59 it is coming out on down on that.
01:38:03 So this is the portfolio quality point of view is see that again
01:38:08 another point I mentioned about it on that this is in
01:38:10 Sleepage has come 1300 course in the every quarter and 400
01:38:16 quarter 400 course have been recovered and 900 courses
01:38:21 and as a net NPF has come on that quarter on quarter basis.
01:38:25 So it shows that it is not increasing it is in control on that
01:38:30 and overall Bank has been provisioned 600 course in every quarter.
01:38:35 So I feel that this is an gradually it is coming up as a as a quality
01:38:42 of the portfolio other part on that.
01:38:44 Whatever the our micro credit portfolio or what I say that the
01:38:49 EB portfolio EB portfolio this year, whatever we are disbursed
01:38:55 in the 2023 and 24 that the portfolio outstanding is a total
01:39:02 outstanding of the EB is a 85% plus among this the portfolio
01:39:10 NPA only the 35 crores which is a 0.11% which is showing that
01:39:18 the new portfolio what happened developing on that gradually
01:39:22 coming very better than the earlier pandemic portfolio and
01:39:27 which have been also shows that the very good comfort on that
01:39:31 the quality of the portfolio future is better and PA will coming
01:39:36 down and of course the sleep is already shown that the coming
01:39:40 down on that.
01:39:41 There any number on the gross NPA that you are targeting with
01:39:46 respect to your business?
01:39:46 Number of the gross NPA is there a ratio that you are targeting?
01:39:52 No, we will be like to see that the how the quality of the portfolio
01:40:00 increase and recovery will come.
01:40:02 So we see that it will be gradually come down on that and
01:40:07 hopefully this quarter is the best quarter for every year.
01:40:11 It will be like to help us to reduce on that.
01:40:15 As far as your CASA ratio goes, you are about 36.1% overall your
01:40:20 deposit growing about 14.5% 15% odd.
01:40:24 I wanted to get a sense from you as to what is stopping the
01:40:28 banking sector from pushing up retail deposit growth because
01:40:32 there's a lot of emphasis on the wholesale growth portion of the
01:40:38 deposits.
01:40:38 People are depending on the bulk deposit side to sort of push up
01:40:42 their deposit base.
01:40:43 But according to your mind, what is exactly stopping banks from
01:40:48 going after the retail deposits?
01:40:49 If I my learning of the last eight and a half years in the banking
01:40:54 industry, though I am not an experienced banker, but we learned
01:41:01 about from the beginning to reach to the retail people are more
01:41:05 and then we'll be like to getting that the retail deposit is more
01:41:11 to the bank and which we are focused from the beginning.
01:41:14 Until now, we are continuing.
01:41:17 We are also like to future continuing on that to reach physically
01:41:22 to the customer which are the retail.
01:41:25 And second point we see that there is a lot of opportunities in
01:41:30 our country, semi-urban and rural areas to physical branch to
01:41:37 give a confidence to the customer that they will trust more and
01:41:42 very quick and they will be like to come to this banking system
01:41:47 to deposit their money.
01:41:48 So in this all of this is the things we are practicing last couple
01:41:54 of years and we are also focusing on that how our employee can
01:41:57 be like to reach to the old people who are like to come to this
01:42:02 banking system and the deposit their money and to the back and
01:42:08 that is only the way we have been seen that there is a retail
01:42:12 deposit.
01:42:13 We can be attract and of course to the service to the customer
01:42:17 and satisfied to the customer with a good behavior and very
01:42:22 transparent way to given that all information to the customer.
01:42:27 It is also another way confidence has come from the customer
01:42:31 and given to this the opportunities of the retail customer
01:42:35 attract to the bank.
01:42:36 So this is the way we are going.
01:42:39 Of course, there is a not bank and not be go in the bulk.
01:42:43 The bulk deposit means other customer also who have the bulk
01:42:49 deposit opportunities in there.
01:42:51 We should bank should be like to attract on that.
01:42:54 It is not only one segment will be like to make it.
01:42:58 So in that sense, we are overall bank like to provide to the
01:43:03 customer service and the give the undertake that opportunities
01:43:08 to grow the business deposit to grow in the bank.
01:43:11 And this is this is one is practicing in that.
01:43:16 The last question from my side.
01:43:18 So there was some announcement that came from the bank with
01:43:22 regard to the NCGTC portfolio review.
01:43:25 They called it a forensic audit, but according to you to review,
01:43:28 I just want to get an update on where that is at this point in
01:43:32 time.
01:43:32 So there is an already disclosed on that, but we are like to
01:43:39 mentioned about it update on that whatever the data is needed
01:43:44 to detailed audit on that and we are provided already and they
01:43:49 are doing it on that because the data is in use.
01:43:52 So whenever it will be like to some queries will come to us
01:43:57 till now.
01:43:57 We have not get any queries and whenever they will be like to
01:44:01 complete it will be get the report and accordingly it will
01:44:04 be like to confidence on that.
01:44:08 We will like to get the benefit of it.
01:44:09 Alright, Mr.
01:44:11 Ghosh, thank you so much for joining us on this conversation.
01:44:13 Pleasure to talk to you, sir.
01:44:14 Thank you.
01:44:15 Thank you to you.
01:44:17 Thank you.
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01:48:06 Welcome back.
01:48:07 You are watching India Market Open and one stock that is in
01:48:10 focus is United Breweries.
01:48:11 They posted earnings last week.
01:48:13 So pretty strong sort of numbers coming in on the front line,
01:48:17 on the top line of course, but some sort of margin pressure is
01:48:20 what we are seeing for UBL.
01:48:21 We have with us the management Vivek Gupta, MD and CEO at United
01:48:25 Breweries joining in.
01:48:26 Vivek, good morning.
01:48:27 Hi.
01:48:28 It's been a pretty good quarter for United Breweries, at least
01:48:31 on the face of it.
01:48:32 Take me to demand trends in the next few quarters.
01:48:35 Growth I believe this quarter was driven by the South and the
01:48:38 East market, while North still is a pain point.
01:48:42 Give us some color in terms of what we can expect on volume
01:48:45 growth for the new few quarters out.
01:48:48 Yeah, good morning and thank you for having me.
01:48:50 Indeed, we had a very good quarter last quarter.
01:48:53 We finished with 8% volume growth and 13% revenue growth.
01:48:57 I think the growth was quite broad based.
01:49:00 We actually grew double digit in both in West, in East and in
01:49:05 South.
01:49:06 Yes, North was a decline because of some of the changes which are
01:49:09 happening in the landscape there, some of the conscious choices
01:49:12 we made and some of the interventions which are going on in some
01:49:16 of the markets where we are waiting for policy news there.
01:49:20 Overall, we feel very positive about the trends going forward.
01:49:24 We know that the trend is on sessionable beer consumption.
01:49:29 Our focus is on growing quarter on quarter and really serve the
01:49:34 consumers with our innovation and product portfolio.
01:49:37 So we are getting into the season.
01:49:39 So fingers crossed, we are really hoping that we will have a good
01:49:44 quarter as well.
01:49:46 Vivek, let's talk about the state mix before we talk about the
01:49:50 product mix and of course the margin picture.
01:49:53 North volumes have declined marginally.
01:49:56 East has done quite well for you, up 22%.
01:49:58 South has also seen a growth of about 10% and West has seen a
01:50:02 growth of 9%.
01:50:03 Now in terms of putting a little bit of a number to that, how do
01:50:07 you see things playing out in the next few quarters state-wise?
01:50:10 Do you feel like things in Delhi will come back on track and Tamil
01:50:13 Nadu, Kerala could also play ball?
01:50:16 See, one of the strengths of United Beauty is we have a very broad
01:50:20 based portfolio and very broad based market presence.
01:50:23 We play in almost all the states where beer selling is allowed.
01:50:29 So actually we are very confident on business coming back in North
01:50:33 as well.
01:50:34 But at the same time, you know, it is going to be an election
01:50:38 season for the next quarter.
01:50:40 So we will be actually quite cautiously optimistic depending on
01:50:43 the disruptions which are going to happen due to the elections.
01:50:46 But we overall feel very confident that our state mix will continue
01:50:50 to grow.
01:50:51 We are also bringing innovation and expansion of innovation in some
01:50:55 of our core markets.
01:50:57 For example, in Tamil Nadu we are launching one of the very
01:51:01 important beer dispositions very soon.
01:51:04 We are also introducing ultra-max draft beer in Karnataka and Maharashtra.
01:51:08 We continue to see very positive results on our Henneken Silver
01:51:11 innovation.
01:51:12 So as we work in some of these markets, we will continue to see
01:51:16 the upside.
01:51:17 But yes, you know, state mix is going to be tricky and we will have
01:51:21 to wait and watch how the policy framework come out in these states
01:51:24 given the scenario around elections.
01:51:27 Vivek, couple of other things I want to talk to you about.
01:51:31 How much does premium products contribute to your top line?
01:51:35 I know premiumization has also worked out really well for United
01:51:38 Breweries and it has also worked out for the likes of United
01:51:41 Spirits.
01:51:42 It seems to be quite the theme in urban cities at least as we see
01:51:45 it right now in this earning season.
01:51:48 Yeah, I think, you know, as I have always maintained that consumers
01:51:51 are looking for economy, premium, mainstream.
01:51:54 So it's the entire portfolio which is critical.
01:51:57 I know premium is very important because consumers are looking for
01:52:00 low alcohol, sessionable beer.
01:52:02 For us, premium segment grew faster than our mainstream segment.
01:52:06 We grew premium volumes by 14%.
01:52:08 We actually grew shares in premium segment in the last quarter.
01:52:12 So premium is absolutely critical.
01:52:14 We have very strong products like Ultra, Ultra-Max, Henneken Silver.
01:52:19 We're also planning to introduce some more portfolio over the next
01:52:22 coming months.
01:52:23 So we feel confident that we will continue to win in premium and
01:52:27 continue to build the category through premium.
01:52:29 We have a long way to go.
01:52:31 We are coming, we are slightly behind, you know, on premium but we'll
01:52:36 make it up in the future quarters.
01:52:39 Right.
01:52:40 What does market share currently stand at Pan India Vivek and what
01:52:44 can we expect on market share going ahead?
01:52:49 So we estimate the market share.
01:52:52 In December, we ended up with more than 50% market share as United
01:52:55 Breweries on total beer category.
01:52:57 Now market share will continue.
01:53:00 Our focus is on category growth versus actually growing market share.
01:53:03 But we see the market share will be in the similar range over the
01:53:07 quarter but our bigger focus will be to grow category and expand the
01:53:10 pie on beer because only 85 to 90 million consumers in India drink
01:53:15 beer as compared to almost 200 million who actually drink alcohol.
01:53:19 So we really need to drive the category and that's our key priority
01:53:22 as a United Breweries.
01:53:24 The category you want to focus on and grow, I'm assuming that is going
01:53:27 to come on the back of spending on marketing events.
01:53:31 I believe in Sunburn as well, the recall of UB Stockingfish is at 87%.
01:53:37 How much of your margins are then going to be impacted or how much
01:53:42 does marketing sort of take off in terms of your cost at this stage?
01:53:47 In quarter 3, we actually invested 300 basis point more on marketing
01:53:52 and promotions.
01:53:54 We'll continue to invest in brands.
01:53:56 We'll continue to invest in category growth.
01:53:58 We are very conscious of margins as well.
01:54:00 Of course, we are working a very strong cost program in the company.
01:54:04 We are looking at a revenue mix program.
01:54:06 It will be a balanced growth.
01:54:08 It will be a combination of top line but at the same time, we are not
01:54:12 going to take our eye off the margin.
01:54:15 Margin progression will be gradual but our top line should actually be stronger.
01:54:22 Right.
01:54:23 Also, if I have to ask you outlook on margins, Vivek, going ahead,
01:54:28 what is the margins that you will be able to maintain in the next few
01:54:31 quarters around current levels or do you think we can expect an uptick
01:54:34 on the margin front as, of course, contribution from the premium segment
01:54:38 also goes up?
01:54:41 See, we actually are in a very volatile environment.
01:54:43 So we definitely get some tailwinds on barley prices, which is an important
01:54:47 commodity in our product.
01:54:49 But at the same time, we also, as we drive more innovation, we have to
01:54:52 infuse new bottles, which also takes away the margins.
01:54:55 So I think we will be -- our aim will be to grow the margins, but we will
01:54:59 be responding based on the market needs.
01:55:03 And I believe one of the things that played out this quarter was the bottles,
01:55:09 the return of bottles, right?
01:55:11 So explain this to me, how much percent of your bottles are new, how much
01:55:15 do come back, are there any measures taken to break the illicit --
01:55:20 illicit trade that is happening in terms of reusable bottles?
01:55:24 Thank you for raising that issue.
01:55:26 I think new bottles, immersion, when we actually launch new innovation,
01:55:30 is a part of business model.
01:55:32 When you launch a new brand or a new pack size, you have to insert new
01:55:35 bottle, which costs us a lot.
01:55:37 The second is we are working with our partners to ensure that the -- for the
01:55:41 sustainability, the reusable of bottle is increasing.
01:55:45 Now, in some cases, there is this illicit trade which is going on, on
01:55:49 crushing the bottles, which we are working with various government agencies
01:55:53 and equity board, and actually giving the awareness, because it is not good
01:55:57 for sustainability when the color trade is booming.
01:56:01 But having said that, I think we continue to work in strengthening our
01:56:05 programs with our current bottle suppliers.
01:56:08 But at the same time, as we bring new innovation, the new bottles will
01:56:11 continue to be -- you know, it will be heavier dose of new bottles in the
01:56:15 beginning, and it will gradually streamline over a period of time.
01:56:20 Vivek, so until it gets streamlined, what is the sort of impact that it's
01:56:25 going to have on margins?
01:56:27 See, it is going to balance it out.
01:56:29 As I said, we are going to have tailwinds on some of the commodities, and
01:56:32 we will try to balance it.
01:56:34 We have also made some interventions with our partners.
01:56:37 So I think our aim is going to have a steady margin progress going forward.
01:56:42 Right.
01:56:43 Employee expenses have also risen in this quarter.
01:56:46 Is that because you've added more employees, or is it largely just
01:56:49 inflation and investments that are being made on current employees?
01:56:54 No, we continue to invest in our capabilities.
01:56:57 As I said, one of the focuses, we want to make ourselves as future ready.
01:57:01 So we are investing in technology.
01:57:03 We are investing in also the organization capabilities in execution,
01:57:07 in go-to-market, in brand building.
01:57:09 And we are also investing in our manufacturing capabilities so that we
01:57:14 actually prepare for 2030 versus actually, you know, really focus only
01:57:19 on the current quarter.
01:57:21 So I think it's the investment in our capabilities, and some of it will
01:57:25 actually, as our revenue grows, will actually streamline as well.
01:57:29 Very quickly, Vivek, in your call, you mentioned that over the next two
01:57:33 weeks, the impact of MRP increase on pricing and margins, you will get
01:57:38 some more clarity in Tamil Nadu.
01:57:41 Also, you've said that there will be some volume recovery post the change
01:57:45 in operating model.
01:57:46 Can you elaborate a little bit on that?
01:57:48 What MRP increase are we talking about?
01:57:50 When can we see that impact trickle into the numbers?
01:57:54 So as you know, that, you know, in many state governments have taken
01:57:58 price increases on beer.
01:58:00 I think there is price increase in Tamil Nadu.
01:58:02 So we are still learning what is the impact on our margins on that,
01:58:06 and we are also learning that how consumers are going to respond.
01:58:09 Usually there is 20 to 25 days of inventories in the trade.
01:58:13 So actually, we will only know in a month's time if the consumer will
01:58:17 start seeing the, you know, slightly expensive beer they will have to buy.
01:58:21 So we'll have to understand that.
01:58:23 So that is what I mentioned, that we will wait for the response.
01:58:27 But given the macro trends, we are very positive that we will continue
01:58:32 to create interest and purchase intent for beer through our programs
01:58:37 and through our better execution in store.
01:58:39 But how this all impacts, we will see when the rubber hits the road.
01:58:44 Right. Also, very lastly, Vivek, you want to tell us about your strategic
01:58:48 initiatives and how that is expected to contribute to your top line
01:58:51 in the next two to three quarters or calendar year '24?
01:58:54 Yeah, I think as I said, our priority is to drive category growth.
01:58:58 I think our first priority is to really fill the portfolio in economy,
01:59:02 premium, mainstream, super premium.
01:59:05 So you will continue to see a scheme of innovation from UBL.
01:59:08 Second, our priority is to work with the regulators to continuously drive
01:59:13 and pitch for moderation.
01:59:16 As I mentioned, 200 million people in India drink alcohol,
01:59:19 but only 85 to 90 drink beer, and beer is moderate alcohol.
01:59:23 Even World Health Organization has already started talking about the need
01:59:27 to have moderate drinking.
01:59:29 So I think we need to continuously educate and work with our regulators
01:59:33 to ensure that the taxation on beer is fair and beer can become more
01:59:37 affordable and accessible.
01:59:39 And the third is we continue to keep ourselves as future ready in terms
01:59:42 of the investment we are going to do in expanding our capacities
01:59:45 in our organization and our capabilities.
01:59:48 So those are the three strategic priorities, and hopefully we'll continue
01:59:51 to see the category growth and momentum on the business.
01:59:54 I'm excited for you. I'm excited for UBL. Good luck.
01:59:57 It looks like it's going to be promising in this calendar year.
02:00:00 Thank you. We need all the luck. Thank you for your message.
02:00:03 Thank you. Thank you very much.
02:00:05 That was Vivek Gupta of United Breweries charting it out for us about how
02:00:08 it looks for the company, the product mix, the state mix,
02:00:11 all working in favor of United Breweries for now.
02:00:14 Well, in the meantime, the markets continue to spend time consolidating,
02:00:19 so no relief there from a little bit of selling that we're seeing
02:00:22 at high levels, 21,725. Remember, 21,700 will be an important level
02:00:27 of support for the markets to watch out for.
02:00:30 Bank Nifty as well has been really under pressure.
02:00:32 This morning is no different.
02:00:34 PSU Banks also seeing some selling pressure.
02:00:36 Hero Motor reported good earnings, but despite a good performance,
02:00:39 the stock gets a thumbs down 3% lower on Hero Motor Corp.
02:00:43 ONGC as well on Baco, weak numbers is off 3%.
02:00:46 BPCL not looking good. So, remember, Oil & Gas and OMCs
02:00:49 after the steel brokerage upgrades, talking about a re-rating for OMCs
02:00:54 and downstream companies gained and now, of course, seeing some profit taking.
02:00:58 But, Tamanna, even the broader markets, earnings reaction
02:01:02 and that's largely what the markets are focusing on.
02:01:04 Yeah, I just wanted to highlight Coal India.
02:01:06 Numbers are expected later today and there is a slide which is being expected.
02:01:14 Already the stock is 3.5% down.
02:01:17 So, if you look at the overall theme and ONGC, BPCL, Power Grid, NTPC,
02:01:22 that whole energy pack is looking quite demure, I would say.
02:01:27 A fresh listing though taking place.
02:01:29 Remember, this is going to be a week of listings, adding five in all
02:01:32 and APJ Surendra Park Hotels is the one being listed.
02:01:36 Right now, you're seeing the D Street debut of the company.
02:01:40 Let's just pull up and see what the price seems to be.
02:01:44 We have seen a massive run-up for IPOs, great season for IPOs last year.
02:01:50 Will it continue? So, a decent listing.
02:01:52 I wouldn't say it's a complete cracker, but it's opened up about with a 17% premium.
02:02:01 So, we'll keep an eye on that.
02:02:03 We'll get you also information about all the other listings we're expecting this week.
02:02:07 But right now, we'll take a very short break.
02:02:09 On the other side, I'm speaking with Ramanpreet Sohi of Honasa Consumer.
02:02:14 You'll also hear from Premchand Devarakonda of EML on their third quarter performance.
02:02:20 Stay tuned.
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02:06:52 Welcome. You're watching NDTV Profit.
02:06:54 I'm Tamannaa Anandar and you're watching Earnings Edge,
02:06:57 the company we're focusing on today is a recently listed parent of Mama Earth,
02:07:02 Honasa Consumers.
02:07:04 Their Q3 numbers are looking great on the face of it.
02:07:07 The net profit has soared 265% year on year.
02:07:11 Margins have expanded by close to 400 basis points.
02:07:15 Now, the question is that can they see sustained revenue growth?
02:07:21 From the con call, the management has indicated that consumption has been slow.
02:07:25 When do they see a recovery on this?
02:07:28 This and a whole host of questions now for the Chief Financial Officer,
02:07:32 Ramanpreet Sohi, who's joining us on the show.
02:07:34 Ramanpreet, hi.
02:07:35 Great to speak with you here on NDTV Profit.
02:07:38 And, you know, let's begin by talking about this quarter
02:07:41 and what has driven those profit numbers.
02:07:44 Your margins also have expanded, very decent expansion there.
02:07:48 Net profits have also expanded.
02:07:51 Are you seeing this coming in from revenue growth or from a curb on operational expenses?
02:07:58 Yeah, no, absolutely.
02:08:00 Hi, good morning to you.
02:08:01 Thanks for having me.
02:08:03 So, you know, like we said, of course, we deliver almost 28% growth for the quarter
02:08:07 from a like for like basis, which is a product business actually delivered 30% growth.
02:08:12 So as we sort of see scale up for our brands, Mama Earth and our younger brands,
02:08:17 we clearly see the scale up happening at an efficient, you know,
02:08:22 leverage across E&P and some of the other line items in our P&L.
02:08:26 Of course, a larger sort of driver for our margin expansion has been efficiency in E&P,
02:08:32 which has come all the way, which has been optimized almost 200 bps from a year on year basis.
02:08:37 I think that continues to be our biggest lever in terms of margin unlocking as we look ahead.
02:08:43 I think in our views, we think we have peer levers to unlock 100,
02:08:47 150 bps in operating margins from an E&O perspective.
02:08:52 And of course, you know, the growth has also, you know,
02:08:56 30% kind of a growth from a YDD perspective and for the quarter perspective,
02:09:01 that, of course, also helps leverage.
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