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- Global news flow & cues - Stocks to watch, trade setup - F&O strategies   Samina Nalwala, Tamanna Inamdar and Agam Vakil bring all this and more as we head toward the 'India Market Open'. #NDTVProfitLive

Transcript

00:00:00 1%. And when you look at the core data from that larger set, which excludes food and energy,

00:00:07 that's up 0.5% versus an estimate of 0.1%. So that has investors a little worried. You

00:00:15 saw that panning out in the yields as well. The US Treasury firming up at one point over

00:00:21 4.3%, though it's settled a little tad lower than that, about 4.28%. And that's largely

00:00:28 not great news if you're looking for foreign flows to come in with hardening yields.

00:00:34 On the other end, if you look at what's happening with crude, while the cues are negative and

00:00:39 point to pressure on crude, prices are holding fairly steady. There's been fresh strikes

00:00:45 in five locations by the US on Houthi areas in Yemen. You've had Israel escalating in

00:00:53 Lebanon. So all of that is there in the background. But crude prices have been inching up slowly.

00:00:58 Overall, you've not seen a big shoot up. Asia, let's just take a look at how Asia is doing.

00:01:03 And remember, China starts trade after about a week's holiday for the lunar year. And yeah,

00:01:09 Asia is largely mixed. Shanghai is slightly up in the red. So mixed cues there coming

00:01:14 in as far as global is concerned. But I was talking about flows and the kind of flows

00:01:19 that we have been seeing. And this is clearly a market which is being pushed by domestic

00:01:26 investors. While on Friday, you had some buying from FIIs. But if you pull up the figures

00:01:31 for the month of Feb, FIIs have largely been sellers and in the range of about 13,000 crores

00:01:39 odd in the month of Feb so far, while DIIs have been buying about 17,000, 18,000 crore

00:01:44 rupees in the month of Feb. So it is the domestic investors coming in. The question is, will

00:01:50 foreign investors also come in? What are the next cues now that result season is over?

00:01:54 And that really is the question, isn't it, Agam? Does it all move to pre-poll action

00:01:59 now or will we see sort of another range bound week?

00:02:02 No, it's going to be quiet when it comes to, well, of course, earnings are behind us, but

00:02:06 it does seem like there's some consolidation on the cards. But Friday was the first time

00:02:13 since about three or four days before that, we saw the nifty move about 22,000. But it

00:02:21 was also the fifth time since 15th of January that it in fact tried and test the 22,000

00:02:27 mark. The real question now is whether or not it manages to sustain about 22,000. And

00:02:32 if it does, of course, a lot of things will change. Perhaps you will start seeing a lot

00:02:36 more people, well, put on bullish positions at this point in time. And it is the same

00:02:40 for the bank nifty, by the way, because for the bank nifty, while it is nowhere close

00:02:44 to its life highs, it is about 46,000, which has been a little bit of a pivot off late

00:02:51 over the last few weeks. And once again, the bank nifty is sustaining above that mark of

00:02:57 46,000 is going to be important. That is when perhaps a lot of these traders will change

00:03:03 their positions. We also have to remember that HDFC Bank has a tremendous weighing on

00:03:08 the bank nifty, and that's largely one of the reasons why we have seen so much weakness.

00:03:14 In terms of the other technical factors, coming down to the nifty specifically, at the moment

00:03:20 what has been very interesting is that the maximum open interest in puts has moved from

00:03:25 21,700 to 22,000, which means that we are likely to see at least some amount of support

00:03:32 as far as the nifty is concerned around the mark where it is. And you know, I won't be

00:03:38 too surprised if a lot of traders in fact go ahead and already initiate long positions,

00:03:43 keeping 22,000 and perhaps 21,900 as a little bit of support, because we have clearly the

00:03:51 risk reward which will be in favour of the longs at the moment. And on the higher end,

00:03:55 remember, it's all the way up to 22,600 where we are seeing max OI coming through. So we

00:04:00 will be watching out for that. In terms of several other factors, your index futures

00:04:04 coming in at around 38% for FYI's net longs, that is nowhere close to being hot. And as

00:04:12 far as your nifty put call ratio is concerned, that also stands at around 1.22. Once again,

00:04:18 it's nowhere close to overheating as far as those indicators go. So at the moment, it

00:04:23 does seem like the environment, at least the technical parameters are indicating positive

00:04:28 stance. The feel is much better at the moment. It is. But a couple of things I think fundamental

00:04:35 investors now again will want to keep in mind is the fact that crude trades at 11-month

00:04:39 high. So it's again going back into territories of $83 a barrel, which is what we've not seen

00:04:45 for a very long time. Apart from that, global cues are going to be missing from the US because

00:04:51 the US is shut today on back of President's Day. But it will be important to see why,

00:04:55 I mean, because it was hotter than expected inflation. The reason for that correction

00:04:59 is what the markets may be slightly disappointed about. But those are things that could fundamentally

00:05:04 play out negatively for us in the medium term. More importantly today, I think I do have

00:05:09 a feeling that it could be a positive start and some sort of consolidation in the second

00:05:13 half, largely because it's law of averages, right? You've had three strong days of trade.

00:05:18 You've had higher highs being made by the Nifty consecutively. Bank Nifty also closed

00:05:23 very close to its previous highs. So lots of positive triggers like Agam mentioned,

00:05:28 but it could just simply be bulls taking some profit off the table that cannot be ruled

00:05:32 out this morning. That is on the broader market front. Talking about stocks, once again, lots

00:05:38 of stocks and sectors will be in focus. We'll highlight a few for you and then talk about

00:05:42 the sectors that participated. Stocks that actually moved out really well. And talking

00:05:46 about that, insurance had a pretty solid catch up on Friday's trade. It was a catch up rally.

00:05:52 You had stocks, so Midcap Pharma that really did quite well. Those could be in focus this

00:05:57 morning. Aviation could come back in focus again. IT may continue to look good. So fortunately,

00:06:03 the stock specific action in sectors that did pretty well on Friday itself. So follow

00:06:07 up buying cannot be ruled out this morning. But take you through what's happening. Some

00:06:12 of these counters were already in the news on Friday, but will continue to remain in

00:06:16 focus this morning as the news pipeline built up on the weekend. SpiceJet is one such counter.

00:06:21 They along with Busy B have submitted a bid to acquire Crisis Head Co. First Airline.

00:06:27 They do believe synergies between the two carriers could lead to improved cost management

00:06:31 and revenue growth. Remember, SpiceJet currently itself is underway fixing its own house. They

00:06:37 have recently raised the first tranche of Capital Infusion to the tune of Rs. 744 crores.

00:06:44 They are also in the process of raising additional Rs. 1,000 crores. They also did have an approval

00:06:49 in place from your shareholders for a Rs. 2,500 crore fundraising via QIP. Now, all

00:06:56 this could be in the works and hence, the management has got approvals for these very

00:07:01 aggressive fundraising plans for SpiceJet. Well, so watch out for this one. It's going

00:07:05 to be another big mover in today's day of trade.

00:07:07 Dr. Reddy's and Novartis. Now, this is definitely worth a mention. Remember, in Feb 2022, Dr.

00:07:15 Novartis had transferred some of its businesses to Dr. Reddy's including its exclusive sales

00:07:20 and distribution agreement. What we have heard over the weekend is that Novartis AG, which

00:07:26 is a Swiss-based company, is looking to offload its nearly 71% stake in its Indian arm and

00:07:34 Dr. Reddy's is the frontrunner for this. Of course, we did write to Dr. Reddy's. They

00:07:38 couldn't confirm that or deny that and that's important to note. Novartis India's top line

00:07:44 as of last quarter stood close to Rs. 380 crores and their market cap is about Rs. 2,556

00:07:51 crores. Dr. Reddy's, remember, is sitting on a very heavy cash balance. So, a lot of

00:07:55 this expansion and acquisition will be funded by cash accruals or internal accruals on that

00:08:02 note. So, both these counters to watch out for in trade. Along with that, smaller but

00:08:07 always a mover, it's Balram Prucini. They've announced that they are going to manufacture

00:08:12 polyacetic acid, which is used in the manufacturing of bioplastics. Management believes that this

00:08:19 is going to be the next leg of growth on back of very strong demand from the industry. They've

00:08:25 got fundraising plans approved as well in place. The deal will be funded through debt

00:08:30 and internal accruals. So, that's largely the three counters that are on my radar. There

00:08:34 are a few that Agam also has, which is largely on block deals that we'll talk about like

00:08:39 data patterns. But Tamana, you've got a few as well. Yeah, I think one stock definitely

00:08:44 to watch out for this morning is going to be 197. Never ceases to be out of the news

00:08:49 and so much action there on Friday during market hours and after as well. So, a couple

00:08:54 of things have happened. The RBI put its list of FAQs on what its action against Paytm Payments

00:09:00 Bank means, what it means for the core Paytm business users, etc. Axis Bank turned out

00:09:06 to be the knight in shining armour for now. We'll take over 197's nodal accounts. That

00:09:12 means at least there is some relief for merchants, etc. even after March 15th. That was the other

00:09:18 piece of news that instead of the end of this month, the deadline to sort of seize all operations

00:09:24 in Paytm Payments Bank has moved to March 15th. Now, a couple of interesting notes out

00:09:29 this morning, one of them is Bernstein's and we're going to be speaking with Bernstein's

00:09:33 in a bit from now, that rates Paytm outperform with a target price of 600. They've also said

00:09:41 that RBI's actions seem to be limited to Payments Bank and are not intended at disrupting the

00:09:47 UPI and other functions of Paytm. They see RBI's hint at merchants being able to use

00:09:53 the QR code soundbox as positive and this is important because in the FAQs, the RBI

00:09:59 made it clear that those functions, the soundbox, etc. will continue. The cutoff date has also

00:10:05 been extended, which is being seen as a positive and no exception for bulk transfer to another

00:10:11 bank. Citi meanwhile has maintained a sell with a target price of 550. They expect Paytm

00:10:17 to announce more banking relationships after access. So, that's the next trigger. It says

00:10:23 Paytm to see impact on app traffic and elevated user churn. So, while there are some sort

00:10:31 of positive cues on that, the other question really is what the FAQs are telling you because

00:10:36 the RBI is very clearly advising users to move their Fastag and other operations out

00:10:41 of Paytm. So, we'll have to wait and see how the stock reacts, but that's definitely one

00:10:46 that is going to see some gyrations today in trade.

00:10:49 LIC is the other one we should talk about and this is something NDTV Profit had reported

00:10:54 earlier. LIC has put it out in the public domain. Quite a sizable tax refund that the

00:11:00 insurer has got, about Rs. 21,740 crores. It's for the assessment years FY13 to FY20

00:11:08 and they've also launched a new product. So, LIC anyway has been a hot favourite and could

00:11:14 turn out to be the stock of the year as far as a few analysts are concerned. So, that's

00:11:19 one that could see some movement today. Tata Power is the other one. They've got a letter

00:11:23 of intent from REC to acquire the Jalpura Kurja Power Transmission project for about

00:11:29 Rs. 838 crores. Few more counters, but I'll come back to them after Agam has his list

00:11:37 out.

00:11:38 Very quickly, I want to talk about Paytm because I'm not going to rule out a 5% upper circuit

00:11:43 this morning. There's a high chance that's going to happen because it was already on

00:11:47 an upper circuit last Friday and given the fact that it's just a 5% circuit now, there's

00:11:52 a higher possibility, a higher probability that it could in fact end up there. That said,

00:11:57 a couple of more counters in focus. We are also keeping an eye on something like data

00:12:02 patterns. Now, we've had some change of hands there. At least the private equity player

00:12:08 Florentry has sold a little over 10% stake in data patterns and interestingly, we have

00:12:14 a bunch of other institutions who have bought into it. So, Government of Singapore has bought

00:12:19 about 5.6% in the company. Mirai AMC has bought up nearly 2% and Kotec Mahindra Mutual Fund

00:12:26 has also bought nearly 1%. Along with them, an individual Mathus Siriak has also bought

00:12:32 about 1.2% stake. I believe, if I'm not mistaken, and this is something I need to assert, that

00:12:37 Mathus Siriak is also associated with Florentry. Of course, that said, we are also keeping

00:12:42 an eye on M&M and that's at a life high of course. Its futures were down across all series,

00:12:50 open interest that is, by as much as 7%. It doesn't necessarily mean that shorts were

00:12:54 covered because naturally, we've seen a super up move as far as M&M is concerned. But do

00:13:00 remember at the moment, as far as M&M goes, its base now shifts to around 17.50 because

00:13:06 that used to be a little bit of a resistance of sorts and it had been before we started

00:13:12 seeing that sharp, sharp up move there. So, we'll be watching out for M&M as well in today's

00:13:17 day of trade. In fact, quite a few other stocks that we need to talk about and M&M is something,

00:13:23 Samina, I know you're going to come to in detail with the Sharan Editor's Cut. But before

00:13:29 that, just a couple of more counters because so much news over the weekend and Quest is

00:13:34 one we should address very quickly. So, Quest Corp is going to demerge into three separate

00:13:42 listed firms. These will be Quest Corp, Digitide Solutions and Blue Spring and there will be

00:13:49 separate verticals really which will be seeing an unlocking of value, at least that's what

00:13:53 the company says. So, they will be handling workforce management via Quest, business process

00:13:59 management, insure tech and HR outsourcing versus Digitide and facility management, industrial

00:14:05 services and investments through Blue Spring. So, Quest could have some interesting move

00:14:09 there. NTPC, Nalco is the other one, they have inked an agreement, NTPC has actually

00:14:15 inked an agreement with Nalco to supply 1200 megawatts of power for Nalco's Odisha Ops

00:14:22 and a whole smattering of stocks really with some news.

00:14:26 Yeah, in fact talking about Quest Corp and this is very interesting because they are

00:14:29 splitting it three ways but if you look at the market cap of Quest Corp, it's 7000 crores.

00:14:34 So, it's going to go into becoming a micro cap in every sense if you split this three

00:14:38 ways, right. But another quick mention, Crystal reported earnings, I'm just doing a little

00:14:43 bit of justice to the end of the earnings season, good set of numbers. They've reported

00:14:47 a 16% growth on top line, margins also look pretty good, quarter on quarter also they've

00:14:52 done quite well. Remember it's a mid cap name, so it will be again in focus this morning,

00:14:57 you could see a movement on the upside on Crystal as it would be, you know, reacting

00:15:03 to a solid set of numbers for themselves. Well, that's pretty much all the stocks that

00:15:10 we have but it's over to Alex, he's back as always on Editor's Cut this morning. Good

00:15:14 morning Alex. Good morning Samina and good morning to the

00:15:16 viewers as well. This is a story of one of the, if not the cheapest large automotive

00:15:26 original equipment manufacturers. We are talking about Mahindra and Mahindra today. It's an

00:15:31 interesting play of both India's rural story through its farm equipment sector, its tractors

00:15:37 as well as India's love for the sport utility vehicle through its urban play and the premiumization

00:15:45 strategy that is at play in the automotive space. The question is, can it capitalize

00:15:51 on the potential that it has and will that reflect in the price? Indeed, in the end of

00:15:57 last week you saw the price run up very substantially and despite that we are talking about a very

00:16:02 significant gap in valuations between Mahindra and Mahindra and its peers. So, we are talking

00:16:07 about the case right now and I think the question that Tushar was asking is, is this Mahindra

00:16:14 and Mahindra's moment in the sun or is this going to be a case of sunburn? So, let's lay

00:16:20 the context first on the fundamental Samina and then we will go to valuations if you will

00:16:25 allow me. How does it look right now because farm equipment is looking a little weak? Yeah.

00:16:31 So, farm equipment, thank you Alex. Good morning Samina. Good morning. So, the most important

00:16:35 fact to look at Eminem's farm business is that it's a cyclical business. Sure. Couple

00:16:42 of years ago, tractor units were growing at 27% or something like that. It's down almost

00:16:48 flat and the company may end at 524 with tractor volumes at, declining by about 5%. But the

00:16:55 story here is not just about tractors. It's about the SUVs. That's because we have seen

00:17:01 a run up in the way SUVs are in demand in India. Yeah. So, Eminem as per its Q3 earnings

00:17:08 it says it's the number one company as far as revenue market share is concerned, not

00:17:11 in absolute numbers. So, it's not selling as many units. That number is Maruti's. That

00:17:15 number is Maruti's. So, what they are doing is they are getting the money but they are

00:17:20 not selling the units. They are also down on average selling price as compared to its

00:17:24 peers but it will still be the fastest growing because that's what the guidance that the

00:17:28 company has given. Right. It will grow in the high to, mid to high teens with the industry

00:17:35 average seen at about 10 to 12%. How are the margins on this business, Dushyant? Because

00:17:39 while I know you will get the numbers, what happens to margins? So, in margins what happens

00:17:44 is they want the premiumization to be in play. Okay. So, essentially they don't, they want

00:17:51 the buyers to be spending on the Scorpios and the XUV700s. But what the company has

00:17:56 faced problems is that people have gone to the top end of the SUVs. Yeah. So, while there

00:18:02 may be numbers coming in, you know, in a way but that's not still reflecting in the, in

00:18:09 the margins. So, it's actually an interesting conversation because if you look at the last

00:18:12 decade, decade and a half, Samina, and anytime you have seen an instance where rural has

00:18:17 underperformed, you have seen farm equipment sector do a little badly, urban has taken

00:18:23 the pie for… And it's happening right now. Absolutely. Maybe not in the auto pack

00:18:27 only but everywhere else. So, we'll talk about that tomorrow. Yeah. But be it FMCG,

00:18:32 be it other sectors, like you said this morning, if rural doesn't do too well, urban jumps

00:18:37 in to support. Yeah. Absolutely. That has worked for us, for our economy so far. That

00:18:42 helps for us. But this is what I said, when it's, is the case of a sunburn or not because

00:18:47 it's, it's an opportunity for M&M to squander. If you see your SUV is in so much demand,

00:18:56 what M&M needs to do now is to actually get those products out. It's to get its product

00:19:01 mix right. So, when are these product launches expected, Tushar, over the next couple of

00:19:05 quarters? Yeah. So, by first quarter of next fiscal, that FY25, they want the 5 door Thar.

00:19:11 Remember, the Thar is the product that brought back M&M 2 or 3 years ago. The company also

00:19:18 has about 5 or 6 EVs in the pipeline. There are, there is a refresh of this XUV300 that

00:19:23 is going to come in. So, those products, the new product launches as we have seen is, draws

00:19:28 the volumes as well. So, while the company wants to show up its margins, it also is looking

00:19:33 at building its absolute numbers as well. It wants to sell more. It wants to gain market

00:19:39 share. Got it. So, while okay, we have the revenue market share, but we want the absolute

00:19:42 market share, absolute market leadership as well. So, but let's talk about valuation.

00:19:46 Yeah. So, I think, and I think it's interesting, right, Tushar and Alex, when you compare,

00:19:51 so first let's look at Mayandra and Mayandra's recent rally. It's done a 8 to 9% up move

00:19:56 in the last two days, post earnings and post the fact that they announced that deal with

00:20:01 Volkswagen. So, both those factors led the counter to lead the way up in the auto pack

00:20:06 on Friday. Now, when you look at those numbers, it trades at close to 20 times its forward

00:20:13 price to earnings. That on the face of it when compared to its peers, appears extremely

00:20:18 cheap. But what you want to keep in mind, it appears expensive to its own historical

00:20:22 average. So, historically, M&M has traded at 14 times forward earnings. Now, you're

00:20:28 at 20 times forward earnings. So, there's a huge gap in terms of a premium that it's

00:20:31 currently trading at. So, while I said it trades expensive compared to itself, but cheap

00:20:36 as compared to its peers. Now, on the face of it, it looks cheap, right? Let's break

00:20:40 this down. The reason it trades at a discount to its peers is because M&M, the whole company,

00:20:47 only contributes to 30 to 40% of auto. There is some holding company, there is the NBFC

00:20:53 arms, there are a whole bunch of businesses that go into M&M. And the valuation hence

00:20:57 doesn't look too fair, and the calculation is done on the SOTP basis. So, I think the

00:21:01 better way to look at this is while it looks cheap, it's actually not cheap. It's not cheap

00:21:05 as compared to itself. And I think that's what investors want to keep in mind. Also,

00:21:09 what brokerages, and I want to come on this one because, you know, when you and me spoke

00:21:13 yesterday, we said, oh, brokerages seem so euphoric about M&M. But Tushar and Alex, you

00:21:18 both will agree, while everyone has come out with a brokerage note pretty much immediately

00:21:22 after the earnings came out on M&M, from your Nuwama to your Bernstein to CLSA, the whole

00:21:29 list, everyone has increased the target price, but there hasn't been an aggressive upgrade

00:21:34 on the counter. The max increase in target price stands at 18 to 20%, which after Friday's

00:21:39 rally would be much lesser. Much lesser, no. So, there's no aggressive upgrade. Let's not

00:21:43 forget that. While we got very excited and trying to explain the move on Thursday, Friday

00:21:47 to earnings and brokerages, they've only hiked their target price and not so aggressively

00:21:51 either. But yeah, you've got to tell us what you made of those brokerage reports.

00:21:56 So, in a way, we saw the upside as about, at maximum that we saw was from, I think,

00:22:01 Motilal also at 21%. That's it. Yeah. That's it. And since you mentioned about the SOTP

00:22:06 angle, that's the most important thing to see, that it's just not the auto business

00:22:10 as far as Mahindra's valuation is concerned. They have to consider everything else as well.

00:22:15 So essentially, what they have to now do is actually fire, see how do they manage their

00:22:21 order book, how do they manage their waiting periods. So, therefore, the question is, where

00:22:28 do the risks lie at this point and is it in the price? So, first, where do the risks lie

00:22:33 and then is it in the price? The good news is in the price. That I can

00:22:35 see. So, where the risks lie is not delivering on the promise. So, essentially, if you have

00:22:41 a production capacity of 49,000 units, if you're sitting on an order book of about 2.25

00:22:47 lakh, that's the order book that the company is sitting on and the waiting period, say

00:22:52 for example, for a Thar or a Scorpio is still one year. So, if you're not able to bring

00:22:57 that substantially, so you will see highest cancellations coming forward. Secondly, M&M

00:23:03 and actually it's a very weird thing to bring up, especially when it's deal with Volkswagen

00:23:07 has actually underway now. So, it'll bring up more EV components from Volkswagen for

00:23:12 its EVs that are going to come in. So, historically, M&M has, for a better word, has bungled its

00:23:19 alliances. M&M has had an alliance with Ford, M&M had an alliance with SsangYong, as well

00:23:27 as with Kinetic for its two-wheeler business. So, the history does not look good for M&M.

00:23:31 So, any delay or any gaps in this particular alliance will not bode well for M&M's EV business.

00:23:38 Remember, six EVs that M&M has promised that will run six electric SUVs in the next 18

00:23:43 months. Any delay and you'll have a Maruti coming in with its product in October. Tata

00:23:49 will not give up on its advantage. Which is a market leader right now. So, those risks

00:23:53 remain. And by the way, that list is much longer. You have Navistar, you have Renault

00:23:58 as we pointed out, you have the two-wheeler play that you mentioned, and there are several

00:24:02 more. But what is the point that you were saying?

00:24:04 My very quick apprehension here as well, the big bet is PV is EV. If we don't see a sharp

00:24:11 rebound, there's no upside risk in tractor sales over the next couple of quarters. Will

00:24:17 PV be able to support the kind of valuations M&M trades at this stage?

00:24:21 That's the sense that we're getting from brokerages. So, Bernstein says that the valuations, current

00:24:25 valuations, it is the SUV story that they're saying. So, it is now meaty enough to carry.

00:24:30 So, historical past performance cannot be an indicator of future performance in the

00:24:34 case of EV.

00:24:35 It's because the Indian car market itself is changing. So, you have the SUV volumes

00:24:37 in...

00:24:38 Across businesses.

00:24:39 So, it is again, SUV is the driver as what even brokers are saying. Tractors may take

00:24:44 a step back for some time because it's a cyclical business. If it performs very well, if it

00:24:48 lays flat, then I mean, okay, at least the SUV will still carry on.

00:24:52 So, you know, we talked about Tata Motors a few weeks ago and we talked about Maruti

00:24:56 and this morning we talked about M&M. The story for all three clearly in terms of future

00:25:00 outlook is EV. But if an... and of course, this is not a recommendation. So, make clear

00:25:05 that we're not recommending any stocks to anybody. But in terms of what we've seen,

00:25:10 what commentary we have and prices stand between the three of them, who seems better placed

00:25:15 at this stage?

00:25:16 Okay, that's a...

00:25:17 That's a tricky question.

00:25:18 It's a tricky question.

00:25:19 And completely different entities, right? Because I would argue that you have Mahindra

00:25:23 and Mahindra which is...

00:25:24 Which is a group entity.

00:25:25 And which has farm equipment and automotive. Tata Motors is a Jaguar Land Rover player

00:25:30 because 70% of their revenues come from Jaguar Land Rover. Maruti Suzuki, India's largest

00:25:34 passenger car maker and seeing a transition from entry level to SUVs. It is the largest

00:25:40 by volumes right now. And you could see a situation where down the road it could boost

00:25:44 its SUV offerings to have the very large offerings as well.

00:25:48 So, no decision on this?

00:25:49 You can't. I don't think that you can necessarily...

00:25:50 It depends. I guess it depends on what your preference is. If you want PV and EV, you

00:25:55 pick Maruti. You want luxury and EV, you pick Tata Motors. You want farm and EV, you pick

00:26:02 M&M.

00:26:03 SUVs. Farm and SUVs.

00:26:04 Farm and SUVs, you pick M&M.

00:26:06 But hopefully we'll give our viewers some perspective on Mahindra and Mahindra. The

00:26:10 fact that yes, when you look at its peers, the multiples might look very attractive.

00:26:15 But as Samina pointed out, it is trading at multiples that is higher than its historical

00:26:20 averages. So, bear that in mind as well. Lots to talk about before the start of trade. We'll

00:26:25 talk about several individual counters as well as the latest from the F&O space and

00:26:29 you'll find all of that after this very short break.

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00:29:48 Welcome, you're watching India Market Open. Quick look at the GIFT Nifty before we move

00:29:53 to what the F&O Qs look like this morning. And we're set for a mildly positive start,

00:30:00 I would say as best. Let's quickly pull up Asia as well and see what's happening there.

00:30:04 We've seen mixed Qs largely as far as Asia is concerned and that trend continues. Shanghai

00:30:10 about 1% up and Hang Seng 1% in the negative. But can we sustain above 22,000 is the question

00:30:18 are we going into the next hunt for a trigger after Q3 is done and what are F&O Qs looking

00:30:25 like? Agam is joining us for all that and more. Agam, is the mood largely positive?

00:30:31 The indication suggests that we are likely to sustain about 22,000 at least over the

00:30:36 course of the next few days. And if we do in fact come off 22,000 then well we could

00:30:42 potentially be in some challenging times. That said, as far as Friday is concerned and

00:30:48 as I mentioned earlier, it was the fifth time where the Nifty tested 22,000 and possibly

00:30:54 the third time where it closed above 22,000. Now we're keeping an eye on the index futures

00:31:00 which saw about 2.5% increase in open interest towards longs. The Bank Nifty picture wasn't

00:31:05 very different. The Bank Nifty also saw an up move with a little bit of an increase as

00:31:09 far as open interest is concerned also towards fresh longs. Coming down to the options market

00:31:14 we talk about the change in OI. Now because 22,000 has become a little bit of an important

00:31:21 level of late, we've seen a substantially larger amount of puts coming through as compared

00:31:27 to calls. This also indicates at the moment that there are more number of traders who

00:31:33 are a little bit more confident about the Nifty sustaining above 22,000 as compared

00:31:37 to it moving below and perhaps staying below that mark. And this is how the positioning

00:31:43 is as far as Friday's Day of Trades is concerned. Of course, if you do see the Nifty come off

00:31:48 then you'll start seeing a lot of unwinding of those particular puts. But even in terms

00:31:52 of your overall range based on maximum open interest, because of the action on Friday,

00:31:58 your max OI input has now shifted from 21,700 to currently at 22,000. Of course, on the

00:32:05 higher end we continue to track something like 22,600, 22,500 where we could see the

00:32:11 next level of resistance as far as the Nifty is concerned. Still about 2% away from current

00:32:17 market levels, but an important level to keep an eye on all the same. We did see a lot of

00:32:22 strength across stocks, Metropolis, MFSS, Nalco, Polycab, all of them is looking at

00:32:27 advances. Gujarat Gas of course saw weakness coming through, so shorts building in there

00:32:31 in terms of stocks which is seeing unwinding. We have long unwinding for ICICI Lombard,

00:32:36 but besides that M&M, Deepak Nitrate, Chambal Fertilizers, and Apollo Tires, all of them

00:32:41 looking at about a short covering. So all in all it did turn out to be a good day of

00:32:45 trade as far as the markets are concerned. The question really is where do you go from

00:32:49 here? What do you do with these indices? Let's get an expert opinion. We have Shilpa Rath

00:32:54 of Prabhudha Sridhar who is joining us on the show. Shilpa, good morning, thanks for

00:32:57 joining in. Let's start with your view on the Nifty and the Bank Nifty. How would you

00:33:01 trade them now? Good morning everyone and thank you for having

00:33:05 me on the show. Talking about the indices, we see that Nifty and Bank Nifty definitely

00:33:09 has given some sort of very bullish trend now and Nifty particularly sustaining above

00:33:14 22,000 is a clear indication that we might see that new all-time high is coming very

00:33:19 soon. If you look at the option chain for the weekly and the monthly or even for the

00:33:23 March monthly expiry, we see that 23,000 call writers are very active with 22,000

00:33:28 and 21,800 in a portfolio has been very active, which also indicates that the limited downside

00:33:34 scenario now with a largely upside potential is going to be playing out. Talking about

00:33:39 Bank Nifty, Bank Nifty also we see 47,000 and 49,000 call writers on weekly basis, very

00:33:46 active and if you look at the March monthly expiry, the next series you see that 50,000

00:33:51 call writers are very active, which means that the upside is definitely looking way

00:33:56 up towards 50,000 mark with immediate support at 45,000 levels.

00:34:02 Alright, Shilpa. So, can you talk to us about trading ideas that you can offer us this Monday

00:34:07 morning? I have a couple of ideas. For indices, I believe

00:34:13 one can go for March monthly expiry. It is a little positional view from here and I have

00:34:18 recommended the same in Prabhudha Sriladhar. For 50,000 call, I had recommended around

00:34:24 120, of course, it has moved past 200 right now, but on any declines towards 150 or something,

00:34:31 you can definitely go for a buy. Keep a stop loss of 60 and it should do 450 to 500. This

00:34:37 is a very large potential, I mean a positional trade, but one can definitely bet on that.

00:34:44 Talking about stocks, I believe, you know, two buying recommendations I have. The first

00:34:48 one would be in Tata Com. Tata Communication we saw has given a breakout now and the stock

00:34:53 sustaining above 1800 is a very positive trigger. You can see levels of 1900 and 50, you know,

00:34:59 coming days. So, as long as it is holding above 1800, it is a very positive trigger.

00:35:04 So, one can buy here with a stop loss of 1780 and look for targets of 1880 to 1900 on first

00:35:10 basis and little ahead of that 1950 should be the next stop. The other one would be Chola

00:35:15 Finance. Chola Finance is giving a breakout above 200 DMA which is roughly placed at around

00:35:20 1130 to 128 zones. So, as long as it is 1120 is held, this is a very strong support. One

00:35:28 can look for Chola Finance to move towards 1200.

00:35:31 Shilpa, we will leave it at that. Thank you so much for joining us and taking us through

00:35:35 your views on the markets and also, of course, giving us a handful of those trading ideas.

00:35:38 We will be watching out for that and some crucial insights coming in as far as the technical

00:35:44 stance on which the world markets are currently being built upon. Well, with that, it's back

00:35:51 to you, Samina.

00:35:52 Thanks, Agam. That's the F&O picture and stock recommendations coming in from our analysts

00:35:57 as well. In the meantime, the implied Nifty is indicating to a flattish start with a slight

00:36:03 positive bias. Remember, we are 80 points away from our record highs that was made on

00:36:07 the 16th of January exactly over a month ago. Well, 52 points high on implied Nifty. If

00:36:13 it goes as indicated, we should be seeing a start closer to those record highs. But

00:36:19 we have got lots of stocks that we will be tracking. A few of them would be carried forward

00:36:24 from Friday itself. But they were too active to ignore this morning. So, we have got Varsha

00:36:30 standing by with more on that. Varsha, what are we watching out for this morning?

00:36:34 Good morning, Samina. So, let's start with SpiceJet wherein Chairman and Managing Director

00:36:39 Ajay Singh and BBB Airways, which is largely owned by Ease My Trip CEO Nishant Pitti, has

00:36:45 submitted a joint bid for Go First Airlines. Now, the bid has been submitted by Ajay Singh

00:36:50 in its personal capacity and SpiceJet will serve as the operating partner for new airline

00:36:55 by providing staff and services. Also, this collaboration is anticipated to generate synergies

00:37:01 between the two carriers leading to improved cost management and revenue growth. If you

00:37:04 see the stock performance on Friday, stock was up 13.5% while in last six months, stock

00:37:09 has been up almost 45%. Then we have Bajaj Auto where record date has been fixed as Feb

00:37:16 29 for Rs 4,000 crore buyback. On Jan 9, board had approved approval for buyback for up to

00:37:24 4 million shares, total consideration at Rs 4,000 crore. Stock performance since announcement

00:37:29 of buyback stock is up almost 18%. Lastly, we have Novartis AG wherein Novartis AG on

00:37:36 Friday announced the strategic review of Novartis India Limited, which is listed in India. The

00:37:43 strategic review will include assessment of 70% shareholding of Novartis AG in Novartis

00:37:49 India. Now, Novartis said that there is no assurance that the strategic review of Novartis

00:37:54 India will be completed in 2024. Also, this will have no impact on Novartis Healthcare

00:37:59 Private Limited which is separate from Novartis India. And if you see the portfolio of Novartis,

00:38:05 it has a largely of patented branded products catering to bone and pain, transplants, matured

00:38:11 neurology and oncology segments. Now, media reports suggest that drug maker Dr. Reddy

00:38:16 is in race to acquire the Novartis AG stake in Novartis India while Dr. Reddy declined

00:38:22 to comment on NDTV Profits email queries. On Feb 22, company entered into exclusive

00:38:29 sales and distribution agreement with Dr. Reddy for a few establishment medicines. Volume

00:38:34 growth there was in double digit. Also, if you see stock performance for Novartis India

00:38:40 on Friday, the stock was up 13% while in last six months stock is up 45%.

00:38:47 You know, definitely an interesting piece of news to watch out for. Remember, Dr. Reddy

00:38:51 is neither denied nor really confirmed that report that it would be looking at Novartis,

00:38:58 but it seems like the natural fit because in 2022, Dr. Reddy's and Novartis India business

00:39:05 had a distribution tie up. And strategically, if you look at it, DRL has three times Novartis

00:39:13 distribution and 10 times its physician reach. Novartis in itself has quite a valuable sort

00:39:21 of portfolio, which Dr. Reddy would be interested in. They have revenues about 379 crore. They

00:39:27 have oncology segment of patent brand products catering to bone and pain transplant, mature

00:39:32 neurology. So it would be quite a catch for DRL and Novartis, both stocks that we should

00:39:40 watch today. In fact, we'll get a quick word in just a bit from now with our analyst on

00:39:47 what the pharma space is looking like and these counters as well. But meanwhile, we'll

00:39:54 go to Mahima in just a bit for some of the other stocks that are in news today. Mahima,

00:40:00 what's on your list? Right, Tamanna. So firstly, defense stocks

00:40:03 will be in focus today because defense opposed the DAC meeting, the defense companies will

00:40:10 get order worth rupees 80,000 crores. So BEL, HAL, Bharat Dynamics will be the biggest

00:40:15 beneficiaries of this. And BEL has also recently received an order of approximately 2000 crore

00:40:20 from the Indian Navy. So all of these will be in focus today. Then we have the Titagarh

00:40:25 Rail System, where it has received an order of approximately 170 crore from the Ministry

00:40:29 of Defense for 250 specialized wagons for again, Ministry of Defense. Then we have Balrampur

00:40:35 Chine Mills, where it is foraying into a new business of polylactic acid for manufacturing

00:40:41 of bioplastics. Now, this is important because sugar will be used as a raw material in the

00:40:46 manufacturing of this. And they've approved an investment of approximately 2000 crores,

00:40:50 where 800 will be utilized by internal accruals and 1200 by raising debt. Then we have Cresil,

00:40:57 where Cresil's results came out, their total income is up 34% and net profit is up over

00:41:04 110%. So good set of results. The board has recommended a dividend of 28 rupees per share.

00:41:10 The rating segments have grown by 18%. And then the research, however, the research analytic

00:41:17 solution segment saw a bit of dip. It showed around 9.8% this quarter versus 12.4% of Q3FY24.

00:41:27 Then lastly, we have LIC, where it has launched a new product of LIC's Amrit Bal to cater

00:41:32 the domestic market. Now, this is basically a non-linked, non-participating individual

00:41:37 life insurance saving plan. And also two positives for LIC, one is the new launch of product

00:41:43 and second, they've received an income tax refund worth rupees 21,700 crores. So all

00:41:48 of these stocks will be in focus in the trade today.

00:41:51 Thank you for that, Mahima. There are a whole bunch of names that we will be tracking, the

00:41:56 likes of Aditya Gharan, Auto Winds, Defence, also will be a sector you want to track. Stocks

00:42:01 like HAL and BEL will be counters that might be seeing some more activity in today's

00:42:07 day of trade. You've also got Crisil, the reported numbers, your data patterns, we got

00:42:11 a big block deal that hit Tata Power, SpiceJet, Paytm to add to the list in today's day

00:42:18 of trade. Well, we will be trying and connecting with an analyst on the pharma pack any minute

00:42:26 now. But just before that, Sudeep Shah, Deputy VP Head of Technical Derivative Research at

00:42:32 SBI Cap Securities joins us.

00:42:34 Sudeep, it's been a pretty good week behind us, barring Monday last week the markets have

00:42:40 put up a good show, three straight days of higher highs close to about 22,000 on Friday.

00:42:48 Follower buying is expected, but do you think it could be a morning where we get a gap up,

00:42:53 could finally see some consolidation in the second half of trade only because of low of

00:42:57 averages?

00:42:58 Good morning. See, what I feel is that the way the last week has shaped up more than

00:43:06 Nifty, it was the bank Nifty which has stolen the show. And if you see what has happened

00:43:11 with Nifty, Nifty got support from IT, it got support from auto pharma, even the CPSC

00:43:18 stocks oil and gas stocks had moved up. But had it been not for the bank Nifty, which

00:43:23 managed to close above its 20 day exponential moving average, like straight for the third

00:43:28 day. And that is the first occurrence after 17th January gap down open, which bank Nifty

00:43:34 had witnessed of more than 1000 points. So I feel that is one critical point that we

00:43:39 should not be missing out. So now for the entire rally for Nifty and bank Nifty to say

00:43:46 even even post consolidation for the rally to continue for bank Nifty 45 900 45 800 zone

00:43:53 will be a key and for Nifty 21 800 21 850 positionally will be the key. Now, coming

00:44:01 to your question regarding the post opening, how could we be witnessing the markets is

00:44:06 that post this gap of opening will be once again opening closer to 20 to 100, where the

00:44:11 previous multiple tops are placed. So I feel before crossing that we would be there would

00:44:17 be some back and forth some consolidation witness, but overall now for the day 21 950

00:44:22 holds the key and till the time indices are sustaining about 21 950. I feel slowly and

00:44:30 steadily the upside is there up to 22 250 22 300. And just to map it up with the options

00:44:38 data now there was significant put writing visible in the 22,000 as well as 21 900 puts

00:44:44 on Friday, as well as the PCR is now sustaining well above 1.1. So that gives us comfort that

00:44:50 on dips there would be buying witness and I just feel that one thing what we should

00:44:56 not be doing is chasing the gap up. Let the market settle after the first one hour and

00:45:01 then pick up opportunities as they come. Absolutely stay on with us, Sudeep. And let's just take

00:45:10 a couple of minutes to look at what's happening with Novartis and Dr. Reddy's and what that

00:45:14 news report means for the stocks. Forum Parikh Research Analyst at Sher Khan by BNP Paribas

00:45:21 with us for a very good morning to you. Glad to have managed to get you online after those

00:45:26 initial connectivity hiccups. But let's talk a bit about why Novartis is India business

00:45:32 will be a good fit for DRL and why they seem to be the prime candidate. Yeah, hi, thanks

00:45:40 for having me on the show. So Dr. Reddy's as we know in the past have also taken brands

00:45:46 from Novartis which was Sidmonds and some other brands also in 2022, after which it

00:45:53 has been able to revive it very nicely. In 2022, it had bought some selling and distribution

00:45:59 rights for a couple of brands and post acquiring it, you know, it had it is not able to make

00:46:06 it a hundred crore brand and I mean, it has a double digit growth rate. So earlier also

00:46:13 we know that Dr. Reddy's has bought Sidmonds and other brands. And now also we know that

00:46:18 Dr. Reddy's want to increase the India business and it has the muscle power, it has cash on

00:46:24 hand. So Dr. Reddy's is always looking for opportunities even in the US market and India

00:46:31 market being a branded market, high margin market and in Dr. Reddy's Horizon 2 strategy

00:46:39 also, they want to increase their EBITDA margin run rate to around 25-27% from current, you

00:46:48 know, 15-20% run rate. So we feel that Dr. Reddy's though they have denied, you know,

00:46:56 any such speculations, but we feel that Dr. Reddy's could be in a position to buy the

00:47:02 controlling stake because 70% stake on, you know, current market cap of Novartis, it would

00:47:09 all go to some 1100-1200 crores which Dr. Reddy's could easily pay. So I think it can

00:47:15 strategize and increase Dr. Reddy's margin. So we feel that there is a likely possibility

00:47:22 of Dr. Reddy's being able to buy controlling stake.

00:47:25 Sure, sure. No, they definitely will be able to buy, probably they want to, they have not

00:47:29 confirmed it yet for them. The question is that at current valuations would Novartis

00:47:34 be a good buy? Would you see this as an advantage for Dr. Reddy's?

00:47:40 I would definitely see this as an advantage for Dr. Reddy's because it would, you know,

00:47:46 contribute healthy growth to its India portfolio. And I mean, the pharma market is an expensive

00:47:53 market, but you know, there's always double digit growth ahead in the domestic market.

00:47:59 So I feel that, you know, current valuation do augur well for Dr. Reddy to buy Novartis

00:48:05 at current market price.

00:48:07 Suram, couple of, what sort of a premium do you think is acceptable for a Dr. Reddy's

00:48:13 shareholder or an analyst who tracks the sector for Dr. Reddy's to pay for Novartis' Indian

00:48:19 arm?

00:48:20 So, Indian market is an expensive market and you know, any deal which has been done, it

00:48:27 has always been done at a very hefty valuation of, you know, five to six times market cap

00:48:33 to sales. So that could be, you know, the kind of valuations that Dr. Reddy's would

00:48:40 be, you know, I mean, Novartis would be looking at. But then even in the past, there were

00:48:45 many deals which were called off. Indian market, Indian pharma market is in a very good spot

00:48:50 right now. And when the market booms, such kind of corporate actions would always take

00:48:54 place. But whether it would get, you know, fulfilled or not, we do not know. But then

00:48:59 yeah, if the deal has to happen, it could be anywhere in the market cap to sales of,

00:49:04 you know, five to six times is what we believe.

00:49:08 So, for him, if the market cap of Novartis India is about 2000 crores, 5x of that is

00:49:14 what takes me to 10,000 crores, 70% of that values it at a 7,000 crore deal for Dr. Reddy's,

00:49:20 they have 5,900 crores on their books. Are we then saying that the rest of the deal might

00:49:24 have to be funded by debt?

00:49:27 We do not, that is the kind of broad, you know, expectation we have. It could be anywhere,

00:49:35 you know, below that also. But that's the at most kind of run rate what, you know, they

00:49:42 would pay.

00:49:44 So okay, so I don't know how those numbers will work out. But of course, we'll have to

00:49:49 wait and see. From also Dr. Reddy's conference call post the earnings, there was no indication

00:49:53 of any fundraising plan. So maybe 5x is probably not what Dr. Reddy's is going to be willing

00:49:58 to pay.

00:49:59 So yeah, I think the best, I think the best that would be in the range of 2x to 3x. But

00:50:06 any other risk that you see any other contender that could join this race?

00:50:10 So large pharma players like Sun Pharma would also be, you know, in a forefront to buy.

00:50:17 But then as far as I know, Sun Pharma wants to focus into speciality or innovative products.

00:50:25 So maybe in a generic portfolio, I think it could be only Dr. Reddy's, you know, would

00:50:30 be in the forefront to buy amongst the large cap players.

00:50:36 Thank you, Forum. Great talking to you today on the show. That's the perspective coming

00:50:39 in. The kind of valuations Novartis is looking at is 5x of its market cap. And as of Friday,

00:50:44 it stood at 2200. That takes it above 10,000 odd crores. And of course, a 70% stake in

00:50:51 that would mean that Dr. Reddy's would have to shell out anywhere in the range of 7 to

00:50:55 8000 crores, which is far more than the cash it has on its books. Now, whether this deal

00:51:00 goes through or not is going to be anybody's bet.

00:51:03 But Sudip, what about Bank Nifty? How are you viewing Bank Nifty at this stage? It closed

00:51:08 at 46,892, which was the closest to its recent high, but 44,850 I know is an important support.

00:51:20 How do you play Bank Nifty at this stage? Long could be initiated in early trade?

00:51:25 Yeah. See, within the Bank Nifty, it is important to find out what stocks are looking good.

00:51:31 So now, within the Bank Nifty, on Thursday and Friday, we have seen HDFC Bank rebounding.

00:51:36 We even feel that ICICI Bank is a strong contender for an up move. It has consolidated for the

00:51:43 last month, month and a half. So I feel the key for Bank Nifty to sustain at higher levels

00:51:49 would be ICICI Bank as well as HDFC Bank because PSU banks have done their bit. They are already

00:51:55 bullish. They are already moving with strength to strength. So now it is, whether you say

00:52:01 IndusInd Bank, Axis Bank has its own weakness in the last week for all the reasons that

00:52:06 we have seen. So I feel the key would be HDFC Bank as well as ICICI Bank. And levels wise,

00:52:13 if we see Bank Nifty, 44,800 agreed that's a 200 demo zone last week, at least in the

00:52:21 last seven, eight sessions, four or five retests of that zone has confirmed that there is a

00:52:25 strong buying, which is visible there. Now, it is obviously underperformed, but not breaking

00:52:33 an important support in itself is like giving a signal that this kind of zone is becoming

00:52:38 the base for Bank Nifty from a short term perspective. But now for it to move higher

00:52:44 from here on, I feel two levels would be very crucial. First level would be 45,930, 45,950

00:52:51 where the 20 day exponential moving average is placed. And I feel this is, as I said in

00:52:56 my morning commentary also that this is the first time that we have seen consecutive three

00:53:01 closes above the 20 day exponential moving average post its fall from the 17th of Jan

00:53:07 gap down. So this is a positive. Now from here on, this support zone of 45,900, 46,000

00:53:16 would hold the key. And I feel looking at the options data where 46,200 quote writers

00:53:20 were quite active in trade on Friday, that zone of 46,200 could act as a strong support

00:53:25 and we could eventually move higher up to 46,700, 46,800 where the 50 day moving average

00:53:31 is placed.

00:53:32 All right. So, you know, exciting, exciting week up ahead. But the key question, Sudeep,

00:53:39 is what would be your top calls in a market like this? So much news flow that we've seen

00:53:44 over the weekend. Any of those counters on your radar?

00:53:48 The first call that I have is from the CPSC basket, that is a container corporation. Now

00:53:56 for this talk, we have seen the stock has given its highest closing in about last several

00:54:02 weeks. And even it has crossed it's the ninth Feb swing highs also, which were around 970.

00:54:09 On a steady up move from a weekly charts perspective, if you see higher top, higher bottom formation,

00:54:14 also there have been enough consolidations and breakouts in the entire journey from November's

00:54:20 low of 660, 670 zone. So I feel the stock is now poised for a decent breakout on the

00:54:28 upside, can be bought with 960 stop loss and 1020 targets on the upside.

00:54:36 The second stock that I have is PCBL. Now, Philips Carbon, if you see this stock from

00:54:43 the mid gap space, there was a consolidation in between January month, then the stock retested,

00:54:50 broke down below its 28 exponential moving average. And once again, has reclaimed that

00:54:54 with strong volumes. So the structure is quite good on the daily, weekly, as well as the

00:54:59 monthly charts. And I feel that this stock can do well from here on and can be bought

00:55:06 with a stop loss of 318 for a target of 345, 350 on the upside.

00:55:12 So container cop and PCBL on Sudeep's radar. We'll get more of his calls after a very short

00:55:19 break. We'll be right back with the pre-open. Stay tuned.

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00:57:55 Welcome back. You are watching India Market Open. A quick check on implied Nifty. It's

00:58:03 indicating to be another good start for the street at least in early hours of trade. A

00:58:08 new record high in opening cannot be ruled out at this stage. There will be lots of stocks

00:58:12 in focus. I want to talk about some of those pharma movers that we picked up in trade on

00:58:16 Friday. Sudeep, anything with the mid-cap pharma pack that your constructor won this

00:58:21 morning for a quick trade? From the mid-cap space within the pharma, if you see this one

00:58:29 name which did really well on Friday and that was the granules. Now, granules has witnessed

00:58:36 a breakout and it was consolidating for the last one month and a half between 430 and

00:58:42 400 on the downside. And there was a good breakout above 435. So, with this, it has

00:58:49 now reached its highest level and it's a strong chart on the daily, weekly and monthly

00:58:53 time frame. So, I feel this could be looked upon from a quick short-term trade. 440 will

00:59:01 now act as a strong support until this is guarded. I feel on the upside, 475, 480 levels

00:59:07 also can be seen. Absolutely. Another counter that's on the radar is definitely 197. A whole

00:59:17 host of brokerage reports after they've had their FAQs become very clear from the RBI.

00:59:24 In fact, just news coming in that Jefferies has halted all coverage till regulatory issues

00:59:29 are closed. An interesting report from Bernstein as well that asks whether this is the rock

00:59:36 bottom and whether the worst is over in a sense for Paytm. Pranav Gundlapally of Bernstein

00:59:42 joins us now on the phone line on Moor. Pranav, very good morning to you. Great to have you

00:59:47 on the show. Now, the question is that what from the FAQs actually gave you comfort because

00:59:55 they made it very clear that they wanted or were urging users to move their accounts when

01:00:00 it came to Fastag, etc. So, I'm just wondering what you saw as a positive there. Good morning,

01:00:06 sir. Good morning, everyone. I think the big positive is the continuation of the merchant

01:00:11 payments. I think the QR code or the soundbox or the post machine, I think that continuing

01:00:19 is the biggest positive. I think it was largely expected that PPBL will cease operating. I

01:00:26 think maybe that got extended by 15 days. But the products that they used to offer,

01:00:31 which is the savings account and the wallets will cease to exist. And that was largely

01:00:36 expected. The fact that RBI announced that merchant payments will continue is a big positive.

01:00:42 In terms of contribution to 197's top line, is that significant enough, Pranav? And can

01:00:50 we factor in the reputational risk? Yes, for now, things don't change for merchants if

01:00:56 the underlying account is not with Paytm Payments Bank, but with some other bank. Access to

01:01:01 access also seems to have come in as a nodal agency. Is that going to be enough to keep

01:01:05 customers? I would think so. I think from a revenue perspective, the revenue generating

01:01:11 merchants were the ones using soundbox and the ones using the EDC machines. I think there

01:01:18 it is reasonably sticky and switching to alternatives does involve a significant effort. So, retention

01:01:26 should be easier. The QR code merchants might have temporarily stopped using Paytm, at least

01:01:33 a good percentage of them. So, you might see a GMB drop, but limited impact of revenue

01:01:41 should be there. And once this is sorted, given they have that large sales force on

01:01:47 the ground, I think they should be able to get most of the merchants back sooner than

01:01:52 later. Okay. So, the hit then you say, or you think

01:01:55 will be contained to the Payments Bank ceasing to exist and others will come in. Do you expect

01:02:01 other big names after Access to come in to handle some of those nodal accounts?

01:02:05 Yes, I do expect them to diversify into two or three banks at least. And I do expect others

01:02:12 to jump in. It's a reasonably safe exercise for them because they're just being a nodal

01:02:19 account. So, I don't see any issues with other banks jumping in on this.

01:02:23 And this target price of Rs. 600 that you're seeing Pranav, what is the kind of timeline?

01:02:28 You know, are we going to see a bit of a spike in the next couple of sessions at least?

01:02:33 Yes, I think I do expect the spike in the next couple of sessions and as the stock gets

01:02:39 closer to the target price. And I think the next big catalyst would be them coming out

01:02:45 sometime in March and giving an update on what exactly has been the attrition, you know,

01:02:51 because of all of this development and a good number there could drive further upside.

01:02:58 Pranav, you've obviously been extremely busy, either it's Paytm or HDFC Bank. So, if your

01:03:05 clients haven't kept you busy, we definitely have. Very quickly, you've revised the target

01:03:10 upward to Rs. 600, which you talked to Tamanna about. Any sort of upside risk over here?

01:03:16 What sort of attrition number in March do you think could lead the next leg or provide

01:03:21 the momentum that Paytm currently is looking for?

01:03:24 See, I think there are two things here. One is the attrition number, there will be a loss

01:03:30 of business in this month for sure. I think the key will be what percentage of it comes

01:03:35 back in the last weeks of March before they report. So, getting back to 80-90% of their

01:03:42 payment revenues, I think would be a big positive. The second one is, I think, just announcing

01:03:48 that their lending operations resume, assumption of their lending operations, I think would

01:03:52 be a big positive. So, they have halted that. I think getting to a BAU on that, I think

01:03:58 would be the other big positive for them. So, those two would be the big catalyst that

01:04:03 I see and which then means that the permanent average from PPBL going away is quite limited

01:04:12 from there on.

01:04:14 Pranav, we have covered this well and good. We of course spoke last week regarding the

01:04:20 questions you would like or investors should be asking the HDFC management. Now, all eyes

01:04:25 are on that Annist HDFC management meet. Anything else that you are critically watching out

01:04:31 for that we should be or should be on top recall this morning?

01:04:37 I think I would be hoping to hear something on their lending strategy. So, if they plan

01:04:46 to continue keeping the yields low and going in a conservative mode or if they are seeing

01:04:51 enough data points that would suggest they need to switch gears. I think that's the big

01:04:56 question and I think the cost of funds will sort itself out. I don't see that as a big

01:05:01 reason to worry at this stage.

01:05:05 Thank you Pranav. A big gap up on, of course, Paytm is what we are expecting and Pranav,

01:05:10 we will try and connect back with you once this HDFC analyst meet wraps up and get your

01:05:14 feedback on what you thought. So, two very important talking points, the sectors or the

01:05:20 stocks that Pranav of Bernston has been tracking is Paytm and HDFC. Like we said, we can't

01:05:26 rule out a 5% gap up on HDFC Bank. Bernston and Citi both have pretty aggressive targets.

01:05:31 Now, Rs. 600 is what Bernston has, Citi has a target of Rs. 550 on the counter. So, it's

01:05:37 going to be a good one to watch out for and trade today.

01:05:39 Devane Choksi as well now joins in. Good morning, Devane. Hi, it's Amina. How are you feeling

01:05:44 about the markets this morning? I was thinking about this last week and I said we don't have

01:05:48 too many triggers left and we might be going into a price or time correction. But as always,

01:05:54 the market is so habituated in surprising us that we managed to actually have a pretty

01:05:58 good run on Friday. Going into the near term, so pre-elections, where are you seeing the

01:06:04 markets headed to? Is it still a buyer's market? Good morning, Amina. Well, I guess I think

01:06:12 the market is giving opportunity in a rotational manner. If I think till some point of time

01:06:18 the opportunity was available in likes of Reliance, likes of Tata Motors and among other

01:06:22 stocks. Today, the opportunity is coming back into the banking stocks. So, certainly, I

01:06:28 think we are seeing the rotational approach, I think, as far as the traders are concerned

01:06:33 in building their positions. I see a strong possibility of a higher amount of participation

01:06:39 coming in from the banking space in particular. And also, I think some of the IT and pharma

01:06:45 companies continuing to support the market at the current levels. So, nothing wrong with

01:06:51 the fundamentals, nothing changing as far as the fundamentals are concerned. By and

01:06:56 large, I think the growth opportunities that we have been talking about, I think it remains

01:07:00 intact and as a result of which the stocks which are getting corrected on the pricing

01:07:05 front, they find favour the investors, traders in the market who want to buy at a corrected

01:07:10 level. So, today the banking could be the opportunity that one could possibly experience.

01:07:15 Deven, so in that case, also very quick word on what did you make of the earnings season

01:07:22 so far? Have you gone back and upgraded your earnings of the Nifty 50 companies?

01:07:29 Well, overall, I think the season has been quite satisfactory, I must say. And I think

01:07:35 by and large, the companies have been able to maintain the margin. So, in some pockets,

01:07:41 including FMCG and also including some of the specialty chemical companies, there has

01:07:46 been a relative amount of miss as far as I think the numbers are concerned. But in my

01:07:54 viewpoint, I think one shouldn't be looking at these companies on a quarter to quarter

01:07:58 basis. Maybe particularly the chemical companies, specialty chemical businesses, they look relatively

01:08:04 more stronger going forward. I think they have seen the worst in their past quarters,

01:08:09 have some higher amount of raw material inventory that they had in their portfolio. And also

01:08:14 now seeing relatively better offtake from their customers, particularly in the contract

01:08:20 research manufacturing areas, where probably companies are seeing the better offtake demand

01:08:25 coming in from their global customers. So, I would think that save and accept a couple

01:08:30 of sectors, including, as I said, FMCG. I guess I think more or less the earnings season

01:08:36 has played out well in this particular quarter.

01:08:40 Deven bhai, very good morning. Tamanna here. Earnings season has ended largely on a positive.

01:08:47 The question is, what is the next big trigger that markets are looking for? And I want to

01:08:51 understand whether we will see another pre-election rally. Data suggests that you do see a pre-election

01:08:58 rally in the three months preceding the actual polls. Here, considering that the result is

01:09:05 pretty much priced in, do you see this becoming the next big trigger?

01:09:09 Tamanna, good morning. Well, I guess I think you're absolutely right. The results are already

01:09:15 priced in as far as the market is concerned. And I don't think that results are going to

01:09:20 show any kind of surprise as far as the upside or downside for that metal also is concerned.

01:09:26 To me, I think what it appears is very clear that the new funds are coming into the economy,

01:09:32 particularly these funds are coming into some of the infrastructure companies. That is,

01:09:38 they're probably I think are likely to see the inflow of new money into the market. As

01:09:42 far as portfolio money is concerned, that money is coming into the ETF segment largely,

01:09:48 particularly from the global investors, including investors. I think they probably I think will

01:09:54 be to these different sectors on a rotational basis. So I think that process is continuing

01:10:01 and probably like continue re-election. However, I might see I think we might see some amount

01:10:08 of corrections happening into some of the large caps and the mid cap stocks. They have

01:10:13 ran up much ahead of time as far as I think their prices are concerned and quite possible

01:10:18 that the shift might take place. Profit booking might happen into some of the mid cap, small

01:10:23 cap companies and money would flow into some of the large cap companies where the opportunity

01:10:28 size is relatively stronger. IT is a case in point. I think till the quarter result

01:10:34 announced, I think the IT is languishing. Most of the front line IT companies are languishing.

01:10:39 And today, we are seeing 15% kind of an upside, which has already come in some of the counters.

01:10:45 So in my viewpoint, I think that is a distinct possibility that wherever the large cap companies

01:10:50 are not catching up on the valuation, they will find the funds getting attracted to them

01:10:55 and small and mid cap companies might see some amount of profit booking. Qualitative

01:10:59 sectoral play, qualitative rotational play as far as market is concerned.

01:11:02 Right, right. You know, one play that we should talk about and I just want to get Sudip's

01:11:07 view very quickly is on HDFC Bank. Now, we know that this investor meet was happening

01:11:13 today. It's being organized by Goldman Sachs. It's closed door. But it is the first key

01:11:20 sort of interaction that the management will have since the Q3 results disaster and then

01:11:24 what happened to the stock. The question is that have we bottomed out on HDFC? What are

01:11:31 the charts telling you, Sudip?

01:11:33 See, we have not yet bottomed out on HDFC. I feel it was just because of the oversold

01:11:40 zone that the stock was trading at around 1370-1380 that we got this move. And for me,

01:11:47 1450-1455 zone from where the breakdown actually began in the first week of Feb, that would

01:11:55 be very crucial to cross. Although it is still better right now because this is helping Bank

01:12:00 Nifty to sustain above 46,000-46,200. But for the stock to move from the current levels,

01:12:08 there are two important levels that I feel 1410 will act as a strong support and above

01:12:15 1450, the stock, at least we could confidently say that the stock has ended its downtrend

01:12:20 and now steadily could head up to 1500-1520 on the upside. So 1410, a crucial support

01:12:27 and the 20-day exponential moving average of 1450 will act as a stiff resistance because

01:12:33 that was broken on 16th or 17th of Jan and post that the stock has never reclaimed that

01:12:40 again. So that would be critical in my opinion.

01:12:42 Sudip, how would you place ViceJet on the charts? Did a 12% move on Friday? If we do

01:12:49 get a gap up, could it still be bought into?

01:12:56 See the charts are not completely bullish. They are sustaining at higher levels since

01:13:03 I guess since the December first week, the stock has been trading between 57 and 69-70

01:13:10 on the upside. And once again, this was just because of the news that the stock had witnessed

01:13:16 such a big rally of 11%. So overall, till the time the stock is sustaining above 66-67,

01:13:23 I feel that the stock would still continue edging higher, but I feel that it might not

01:13:29 be that bigger magnitude of the move that we have witnessed on Friday. So those who

01:13:34 are holding the stock could continue holding this with 66 as a trading stop loss, but below

01:13:40 66, I think the stock would once again head back towards the previous trading range of

01:13:44 say closer to 60 levels, 58 levels.

01:13:49 Your pre-open rates have settled. You're just a couple of minutes away from open and you're

01:13:54 looking like you're set for a good day. Sudip, just before we get to the opening, last calls

01:14:00 and do you think that you see the Nifty sustaining comfortably over the 22,100 mark today?

01:14:08 See, there will be in the first 15-20 minutes, there will be obviously some choppiness or

01:14:15 some consolidation given the fact that we would be only 30-25-30 points away from the

01:14:22 previous multiple tops. So I feel that could be the first 15-20 minutes could be a bit

01:14:28 edgy, but overall, 22,000-30, 22,000-50 would be a strong support post opening. And till

01:14:37 this is held, post some initial consolidation, I expect the Nifty to cross its previous multiple

01:14:43 tops and head up to 22, 170-22,200, say by the end of the day or by tomorrow.

01:14:51 Right. Sudip, Devane, stay with us. We'll just quickly address market opening. Pre-open

01:14:57 was indicating to a positive start on the street. So you are expecting gap up. There

01:15:02 will be lots of action. It could be restricted to the broader markets once again in today's

01:15:06 trade. On the large cap space, HTFC will be in focus ahead of the analyst meet. But apart

01:15:11 from that, nothing too major that we would be tracking and that's a start pretty much

01:15:15 in line with what implied Nifty was indicating to 40 points higher, 22,080. Remember, we

01:15:21 closed at 22,040 in trade. We've got a slight gap up. But like I've said before, we cannot

01:15:26 rule out a day when you might consolidate in the second half of trade only because the

01:15:30 market has shown enormous amount of strength over the last couple of days. 38 points higher

01:15:35 off the day's high point already, but looking good at these levels shy of 22,100. The Sensex

01:15:41 trades the gain of 100 points as well. So about 1/10th of a percent higher on that.

01:15:45 Bank Nifty is not doing too badly and that is something we will be taking heart from.

01:15:49 46,480 on Bank Nifty, a very smart 100-point up move on Bank Nifty. Now, that is what is

01:15:54 going to give some support to the Nifty when it starts looking for that over the next few

01:15:58 hours of trade. The breadth of the market is strong. The broader markets are moving

01:16:02 largely in line with the benchmark. So you've got in fact a little bit of outperformance

01:16:06 coming in from the mid-cap index up to 50 points. The small-cap index also performing

01:16:10 in line 7/10th of a percent higher, 100 points gain on the Nifty small-cap index. The broader

01:16:15 markets once again, like I said, looking far more active than the large-cap stocks. Let's

01:16:20 take a look at the Nifty 50 and see where the movement is. The bias is on the upside,

01:16:24 so the breadth is good, but no runaway rally on the street is what we have. I'll start

01:16:29 with the winner first, Bajaj Auto. The counter is looking good. There is of course enough

01:16:35 and more news on that. The Adani Group Company is looking pretty solid. Adani Enterprise

01:16:38 making a strong move, a percent and a half higher. Dr. Reddy is on talks that it could

01:16:43 look to acquire Novartis' Indian Arm, trades the gain of 1%. SPI, DV, so Pharma is looking

01:16:50 okay. The Adani Pack is doing fine. The Bajaj Twins are trading positive this morning. You've

01:16:55 got Tata Consumers, Ayesha Auto as well holding up in today's day of trade. But no real big

01:17:02 sharp sort of up move yet this morning. On the sell side, IT is seeing some profit taking

01:17:07 after Friday's move. So, you've got TCS that's lower. HTAC Live was a big move on Friday,

01:17:12 so insurance taking a bit of a setback this morning. L&P, Indus and Bank, Infi, Axis and

01:17:18 Ultratech are trading flat. But Tamanna, nothing too exciting to write home about at least

01:17:23 in large cap space early this morning. Yeah, the action seems to be in individual counters

01:17:28 and we'll start by seeing what's happening with Paytm, one of the stocks that we've been

01:17:31 tracking in a pre-open. Remember on Friday, the RBI made it clear that at least their

01:17:38 soundbox and QR code business will continue. We had called it in trade setup something

01:17:44 Agam had said that he wouldn't be surprised if you saw 5% upper circuit and that's exactly

01:17:49 what's happened. Jefferies has stopped coverage, but Bernstein raised the target price to 600.

01:17:56 We just spoke with Bernstein that says that perhaps the contagion to the company will

01:18:01 be limited is the worst over for Paytm. We may just be seeing that turnaround story.

01:18:07 The other stock that we need to see on how its opening is, is definitely Gujarat Gas.

01:18:12 Nomura note on Gujarat Gas that has maintained a buy, hiked the target price to 440 and

01:18:19 you're seeing a mild uptick this morning. Same with Ipca Labs. Ipca Labs interesting

01:18:24 because they expect at least 15 to 17 more products for Ipca Labs over the next two or

01:18:31 three years. That pipeline is looking interesting. Spicejet is the other one we should look at

01:18:38 this morning. So it's Ajay Singh's personal bet in his individual capacity, him and Busy

01:18:45 B, which the Pithi brothers have co-founded, will be betting or will be bidding for Spicejet

01:18:53 for Go Air, but Spicejet could be handling the operations. Considering that Spicejet

01:18:58 itself is trying to clean up its books, the stock has not reacted too positively this

01:19:04 morning. PB FinTech on the other hand had some good news coming in. They have an IRDAI

01:19:10 approval for a license upgrade and you've seen a couple of interesting notes on PB FinTech

01:19:18 as well. So we'll pull that up and see what's happening. The other stock that we want to

01:19:22 talk about, of course, is QuestCorp. Let's pull up PB FinTech here if we're not managing

01:19:26 it on the AR. But all right, there we have. So we have Balram Purchini, we have Quest,

01:19:31 some of the other newsmakers. QuestCorp up nearly 13% and this was on our list this morning.

01:19:38 They're going to demerge their company into three verticals and they look at a lot of

01:19:43 investor value unlocking. Clearly, investors agree as well. Balram Purchini also up in

01:19:49 the green this morning. All right, PB FinTech, there, another newsmaker that we were talking

01:19:54 about with that IRDAI license. So quite a few stocks responding in early trade to specific

01:20:01 news, but overall, no real fireworks, right, Samina?

01:20:04 No, except for QuestCorp, like you mentioned. And I'm going to add one more to that list,

01:20:09 which is actually looking pretty good. Was in focus also last week, continues to do well

01:20:14 this morning and it's MRPL. So if we can get MRPL on the screen, it'd be useful to see

01:20:19 what's happening, 12% up move. Now, the Oil & Gas pack has been extremely active. We caught

01:20:24 up with Pobel last week where he said he's literally going back to the drawing room every

01:20:28 48 hours to revise targets on some of these oil and gas names, MRPL being one of them.

01:20:33 The stock is seeing 11% up move. A couple of counters that continue to see follow-up

01:20:37 action today is Data Patterns. We mentioned about the block deal that took place on the

01:20:41 stock on Friday. This morning too, the stock sees a gain of 6.5%. Rail Vekas Nigam is seeing

01:20:46 a 5% up move. You've got Minda Corp as well seeing a gain of 8%. Balram Purchini on plans

01:20:52 of its new business trades with a gain of 4.5%. Crisil reported a very solid set of

01:20:57 earnings. The company is up 4.5% in trade. ITI is also in the news this morning on back

01:21:05 of which the stock trades the gain of 3.5%. So all in all, it's an interesting morning.

01:21:10 You've got the fertilizer stocks recovering after their big fall over the last couple

01:21:14 of weeks. So have been weak earnings from that pack, but pre-election some of these

01:21:18 names are seeing a little bit of a bump up in trade.

01:21:21 Deven, we've talked about a couple of names that are in the news this morning, but I want

01:21:26 to get your views on what are you making of SpiceJet trying to go out and acquire Crisis

01:21:32 Head Go Air? I mean, it's not like SpiceJet's got the house in order itself. They've recently

01:21:37 concluded the 744 crores of fundraising. They've got another 1000 crores of fundraising approvals

01:21:42 that are sitting in place. I mean, do you think this consolidation, this acquisition

01:21:47 could be positive for SpiceJet in the medium to long term?

01:21:54 One can look at this particular aspect, I think, in two ways. One, SpiceJet on its own,

01:22:00 I think, is struggling at this point of time. And probably in order to come out of the struggle,

01:22:04 I think they have a certain amount of synergy, I think, properties in particular available

01:22:11 to acquisition of jet. So from that particular aspect, if you look at it, I think their move

01:22:18 is legitimate, sounding legitimate. However, at the same time, I think one should forget

01:22:23 that on the other side, the challenge would be quite many significant, actually. In fact,

01:22:28 all operation is used to stabilize, I think, taking on the airline company and integrate

01:22:33 it to a stability mode is another challenge. And maybe I think the amount of money that

01:22:39 would require, I think, to further run the operation or upgrade the operation should

01:22:44 they end up acquiring, that is also going to be the third most important challenge.

01:22:48 So I don't know, I think, and one cannot possibly, I think, be very confident about any move

01:22:52 that the company is taking. But as I said, I think in the first place, thinking positive,

01:22:57 they have the opportunity to acquire the airline jet airways and their assets. Probably, I

01:23:02 think, they could particularly parking assets included, particularly because of that, I

01:23:06 think they would probably might find themselves, I think, a little bit more stable than what

01:23:11 they are at this point of time on their standalone format. So I don't have any clear view immediately

01:23:17 coming up from the investment perspective.

01:23:19 Sudip, let's take a first call on the markets and how they've opened. The action seems to

01:23:26 be definitely in PSUs. And perhaps we're seeing a return of interest in PSUs ahead of election.

01:23:34 They'll lead the pre-election rally possibly. Look at LIC this morning. LIC about 3, 3.5%

01:23:39 up as is NHBC, both on the back of news flows as well. Do you see a further upside on both

01:23:45 of these, Sudip?

01:23:46 Yeah. So if you see LIC since morning, we've seen a gap up there. But from higher levels

01:23:54 around 1090, there has been some profit. So I feel overall, the mood is a bit, but it

01:24:00 could consolidate and LIC could have decent supports placed around 1030, 1035 mark and

01:24:07 overall the structure is well placed. So from a positional perspective, from a medium term

01:24:11 standpoint, I feel LIC could head up to 1150, 1200. And along with this, I feel even the

01:24:17 railway stocks today are returning back railways, other CPSC names such as Coal India, NTPC.

01:24:24 So I feel the entire pack is upbeat and we could continue seeing action in this space

01:24:29 say today and for the next few sessions also.

01:24:33 Just a couple of stocks that are in focus this morning. Sula Vineyards, if we can get

01:24:38 that one up in trade, 12% of equity has changed hands in two block deals a few minutes ago.

01:24:46 The stock on back of that is seeing a cut of 6%. Both those block deals have happened

01:24:51 and that took place right just before or around market opening at 9.15 this morning. The other

01:24:56 block deal is Jio Financial Services. They've had 4.34 million shares traded in one bunch.

01:25:03 So one big block on JFS, the stock is up nearly 2%. So both those counters trading or reacting

01:25:10 to block deals. Of course, in the case of Sula Vineyard, it's a massive one, 12% of

01:25:14 equity has changed hands. That's the take on these counters.

01:25:18 Deven, you want to come in on Paytm. Are you buying into the fact that a couple of big

01:25:24 brokerages have upgraded the target price, their concerns seem to now have reduced in

01:25:30 that sense with Paytm doing all the right things now, of course, in terms of a reactionary

01:25:37 move at the current price. Would you be adding Paytm to your portfolio?

01:25:44 I think the UPI business, I think which is the current merchant business, is probably

01:25:52 saved not getting affected. That's a good sign. But whether I think it's a moneymaking

01:25:56 business, the moneymaking proposition is staying with the bank. On one side, I think when you

01:26:01 process the UPI transaction, the incentives which has been given by the government and

01:26:06 through my financial budget and I think RBI distributed, that particular money is coming

01:26:12 into the bank and not into the Paytm wallet. So from that particular perspective, I think

01:26:17 things don't change immediately. However, I think the things do change as far as I think

01:26:22 they're getting a little better time to transit from what they are currently to I think better

01:26:28 compliance driven company somewhere. I think another 15 days of time has been given to

01:26:32 them till 15th March. I'm not completely sure whether they come out of all this and probably

01:26:37 they are allowed to operate normally on the banking side of the activity. So I would like

01:26:41 to reserve my view on this particular subject at least at this point of time. I would probably

01:26:45 prefer to play a little more safe than otherwise. So I think we'd like to look at the better

01:26:50 opportunities elsewhere. So the cloud is not yet lifted off Paytm, but Novartis DRL, just

01:26:56 a quick look at both those counters responding to news. The news is that of course, Novartis

01:27:02 AG wants to sell some of its India business. DRL could be a contender. They have neither

01:27:08 confirmed nor denied it. That's stock up 2%. But look at what's happening to Novartis because

01:27:12 there's no confusion about Novartis, this India business finding a suitor and you're

01:27:18 seeing an 8.5% rise. We talked about Quest as well. Devin, very quickly, I wanted to

01:27:24 get your view on Quest and the three part demerger that they're talking about where

01:27:31 you know, they're sort of hiving off the payroll business apart from the other two. Do you

01:27:37 see a clear value unlocking proposition here and enough to sustain each of these three

01:27:44 particles? Well, again, I think the strategy sounds rational. Let's put it in one line.

01:27:50 It's a rational way of looking at the thing. Having scaled up and made the base in each

01:27:55 of the three areas of working, it is natural for them to think differently and probably

01:28:00 I think hive off some of those particular areas of activities, including the payroll

01:28:06 part where probably I think the margins are not enough for them. So the other two areas

01:28:11 would possibly give them little better prospects for the margins. Not completely sure at this

01:28:16 point of time whether I think it becomes very accurate from the day one once the demerger

01:28:20 has taken place. But one will have to study a little bit more in detail to I think get

01:28:24 into the right kind of approach to how they build the other two verticals particularly.

01:28:30 I think that one would need to understand it a bit more in detail for the management.

01:28:35 Sudeep, just a quick take on Quest. Yeah. So if you see Quest poses gap up now. I feel

01:28:47 it has broken out of the entire consolidation that the stock was into in the last four months

01:28:54 starting November and maybe poses initial gap up. There could be some cooling off but

01:29:00 now 530-540 zone will act as a strong support. Until the time this is guarded, I feel on

01:29:08 the upside, the stock could head up to 620-640 where the previous resistance was located

01:29:16 say in the month of September 2022. It could move up to that zone of 650 thereabouts and

01:29:23 this could be looked upon on a dip of say 530-540. The stock looks good from a medium-term

01:29:30 standpoint.

01:29:31 The few stocks that we are watching, Quest Corp looks good from a medium-term standpoint

01:29:37 and back of the demerger. MRPL, we've talked about this one extensively. It's been a star

01:29:44 across the broader markets and the top performer in that segment. Diven, it would be unfair

01:29:49 if I let you go without getting a view on the oil and gas back and your top pick in

01:29:53 that sector very quickly.

01:29:54 We continue to hold our positive view on the balance that goes without saying because of

01:30:00 the factors which are known to everyone now. However, I think the current situation is

01:30:06 also probably I think working very favorably because higher GRM in the last quarter and

01:30:12 actually I think ended up giving better amount of defining margin also to the Indian companies

01:30:17 and that is the reason for which I think we are seeing relatively good performance from

01:30:22 these companies, particularly DHB and to an extent I think ONGC in parts. I would think

01:30:30 that I think companies have actually started getting a little bit more stabilized given

01:30:35 the stability in the crude oil prices. In my view point, I think commodity nature of

01:30:39 the business I think still continues. So if we don't see the sustainable part of the

01:30:44 earnings, then probably I think the market will not be very convenient giving the re-rating

01:30:48 to the stocks. So that is the only caveat that one could possibly look at. Maybe I think

01:30:52 I would probably stay with the relatively more forward looking business in the last

01:30:57 vis-a-vis I think the other two. HPVP may be slightly better of comparative, but rest

01:31:03 of the things I think could be I think more of a commodity player.

01:31:06 Thank you, Devin. Thank you, Sudip. Great having both of you on the show. The markets

01:31:12 in the meantime a quick check before we slip into a break. The Nifty had got a gap up of

01:31:17 about 25-30 odd points, so no major run-up in early minutes of trade. The Sensex now

01:31:22 in negative territory and so is the Nifty, around 22,000 is what we have on trade. Broader

01:31:29 markets still the holding out. We will take a break. We will come back. We will talk to

01:31:32 the management of Blue Star. They have actually had a pretty spectacular quarter. We will

01:31:35 understand from them if they will continue to grow ahead of the industry in the next

01:31:39 few quarters as well.

01:31:40 Thank you, Devin. Thank you, Sudip. Thank you, Devin. Thank you, Sudip. Thank you, Devin.

01:31:47 Thank you, Devin. Thank you, Sudip. Thank you, Devin. Thank you, Sudip. Thank you, Devin.

01:31:54 Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you,

01:32:02 Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:32:10 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin.

01:32:17 Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you,

01:32:25 Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:32:33 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:32:40 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:32:48 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:32:55 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:33:02 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:33:10 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:33:17 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank

01:33:24 you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin.

01:33:32 Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin.

01:33:39 Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin. Thank you, Devin.

01:33:47 Welcome back. You are watching India Market Open. The market is going in a little bit

01:33:53 of a consolidation zone after a very sharp up move that we saw in last week's trade.

01:33:57 The Nifty trades flat at 22,000. The Sensex also trading flat as we see it. It's the action

01:34:03 that is all over the broader markets that we are picking up this morning. But there

01:34:07 is one company that's had a stellar performance to see the least be Tigar Rajan, MD of Blue

01:34:12 Star joins us now. Good morning, sir. This is Samina joining in from NDTV Profit. You

01:34:17 had a pretty spectacular quarter. I know it was more or less in expected lines, but 24%

01:34:22 growth, 25% growth on top line. Is that sustainable going ahead? Could you help us understand

01:34:28 what led to that sort of a revenue growth and how much of it can continue to go for

01:34:33 the next few quarters or calendar year 24? Good morning. It is a pleasure interacting

01:34:39 with you. Yes, it was a stellar performance. You know, summer season of FY24 was a washout.

01:34:50 And I think the demand came back during the festival season. It is currently holding.

01:34:56 And I would attribute it to pent up demand. Second thing is the penetration levels for

01:35:03 air conditioners are poor in the country. It's somewhere around 7%. So it will continue

01:35:09 to grow is our view. On the B2B side, quite a bit of activities are happening across the

01:35:17 segments, whether it is shop, showroom, boutiques, restaurants, health care, metro railway or

01:35:24 the manufacturing sector data center that had all these sectors have been doing well.

01:35:30 So overall, B2B as well as B2C segments have contributed to growth. Even commercial refrigeration

01:35:38 have done well driven by the consumption growth in ice creams and frozen products. Your question

01:35:45 is whether it is sustainable. Yes, I think I think Q4 so far the demand has been good.

01:35:53 All of us are preparing for a great summer season ahead. And we are optimistic about

01:35:58 closing the year on a high note and look forward to a great summer.

01:36:02 Hot summer is what Blue Star is probably looking forward to. In terms of product mix, I mean,

01:36:09 I know the air conditioning business is got is only what penetrated 7% so irrespective

01:36:14 of what happens, I'm assuming the growth there will continue in refrigerators as well.

01:36:19 So you can give me a product mix that Blue Star currently stands at and what are you

01:36:24 expecting in contribution from these various verticals over the next few quarters or F525?

01:36:31 See, we are a manufacturer. We are a EPC contractor. We are an after sales service provider.

01:36:38 Perhaps we will be the largest in terms of installed base that we have.

01:36:43 So you can imagine the room air conditioners is a significant part of the business.

01:36:47 Commercial air conditioning and commercial refrigeration are also significant.

01:36:52 You can assume all of them are some air. You know, room air conditioners should be

01:36:58 constituting around 30% of our revenue and 20%, 20% should be coming in from commercial

01:37:05 refrigeration and commercial air conditioning. And in electromechanical projects,

01:37:10 the company's revenue should be closer to around 25-30%.

01:37:15 Now, that electromechanical project segment includes the projects,

01:37:25 commercial air conditioning as well as service. Now, if you ask me, all the segments are

01:37:32 currently doing well and I would expect the demand to continue in F525 as well.

01:37:39 The fastest growing must be the room air conditioners followed by commercial

01:37:45 refrigeration and commercial air conditioning.

01:37:47 Sir, your margins have improved. They've come in close to 7% in this quarter.

01:37:54 Margin expansion can be expected from your quarter, from your stable over the next few quarters?

01:38:01 So we attribute that to the product portfolio rationalization.

01:38:08 We repositioned our room air conditioning offerings to address affordable segment as well as

01:38:15 affordable premium segments. And the margin guidelines have been for segment one,

01:38:22 it is 7 to 7.5%, segment two, 8 to 8.5%.

01:38:28 The margin is also improving due to scale as well as localization.

01:38:33 You are aware that we have set up a factory in CCT. We have all for the room air conditioners.

01:38:40 We have also set up a factory for deep freezers in Wada, in Maharashtra.

01:38:47 You know, your profitability has jumped significantly. I mean, close to 100 odd crores from 60 crores

01:38:54 that we've seen in the same quarter last year. Were there any exceptional items?

01:38:59 Was there anything in that number that includes maybe other income that has led to such a massive bump up, sir?

01:39:07 No, there is no other exceptional items out there other than what is disclosed.

01:39:12 It is purely due to scale and the profit improvement or the margin expansion that has happened there.

01:39:20 That's amazing. Also, talk to me about expansion plans. I know that you are aggressively looking to build

01:39:26 your manufacturing units, play the indigenization game. Bring us up to speed with that.

01:39:31 In September, you also had a QIP approval to raise about a thousand odd crores.

01:39:35 So where is all that money going to go?

01:39:39 The cathetics is primarily in manufacturing, followed by R&D, followed by digitalization.

01:39:48 As far as manufacturing is concerned, we have gone ahead with the phase two of CCT.

01:39:55 CCT project has a total capacity of 1.2 million. It is in modules of 300,000 each.

01:40:05 So last year we commissioned three lakhs. This year we will end up commissioning, in FY25,

01:40:10 we will end up commissioning another three lakh units and thereafter another three lakh units.

01:40:15 So that's how the expansion will take place. In other words, it's a modular factory.

01:40:20 In Warda, where we have gone ahead with the expansion of deep freezers in sub 300 litre range,

01:40:30 which will be indigenously manufactured and will be available in the market from next month onwards.

01:40:37 Commercially, air conditioning, there is an expansion that is planned for both domestic as well as international markets.

01:40:46 In research and development, because we are indigenizing, because there are many regulations that are in the offing,

01:40:52 like energy efficiency or refrigerant migration, and new products that are to be developed for international markets,

01:41:00 where we have great interest in the years ahead, that will be a significant capex that will be going in.

01:41:08 And digitalization, because in air conditioners today, close to 25% are electronics.

01:41:16 So there are electronics, digitalization that is happening in the products, as well as for improving the customer experience.

01:41:26 So in our operations and for both for financial controls, as well as customer experience,

01:41:32 we are investing in quite a bit of digital initiatives, which includes analytics today.

01:41:39 We will be moving ahead with AI and machine learning, so on and so forth.

01:41:44 Very lastly, sir, debt on your books. I think that was a little bit of a concern,

01:41:50 which was fairly elevated at least a few months ago. Any plans to retire debt on the books,

01:41:57 to lower that number and to improve the debt equity ratio?

01:42:00 We have lowered through it. When the QIP was completed, we have gone ahead and reduced debt.

01:42:07 As of 31st December, we have surplus cash in hand.

01:42:12 That's fantastic to hear. So clearly, expansion plan is on track. Numbers are looking good.

01:42:18 Cash on the books is looking healthy. No wonder Blue Star trades at its day's high point as we speak to you.

01:42:24 Satya Garajan, thanks a ton. Great having you today on the show.

01:42:27 That was everything we needed to know about Blue Star.

01:42:29 Growing faster than the industry, 25% growth on top line. Management believes they will improve margins as well.

01:42:36 Product mix has been feasible. They have managed to ensure product and operational efficiency.

01:42:42 And more importantly, have reduced debt and are sitting on surplus cash for Blue Star.

01:42:47 With that, I'm going to move on to Sula Vineyards. That's the stock, Tamana, that's been in the news.

01:42:53 Absolutely. I thought what's interesting also about Blue Star is how the prediction is of a better summer.

01:42:58 Hot summer.

01:43:00 But not such a hot start for Sula Vineyards. In fact, Saa Trade, it's cracked over 6% as 12% of equity,

01:43:08 or one crore shares have changed hands in two large trades. Mahima is joining in with more details on this.

01:43:14 Mahima, what do we know so far?

01:43:16 Hi Tamana, so as you rightly mentioned, well, two large trades have taken place and 12% of equity has changed their hands.

01:43:22 Now this is worth 586 crores, which is huge for Sula.

01:43:27 The term sheet suggests that the major investor, that is the World Invest Asia, has completely powered with its stake of 8.34%.

01:43:37 However, since 12% equity have changed hands, the rest equity we're yet to figure out who the sellers are.

01:43:44 However, if we talk about the major shareholders, HDFC Large Cap and Mid Cap hold around 9.5%, Goldman Sachs and SBI Fund hold around 3.5% and 3.3%,

01:43:54 and Quant Mutual Fund also holds around 4.3%. So by the end of the day, we'll know that the remaining 4% stake is sold by which of these investors.

01:44:03 Yeah, absolutely. For now, of course, Sula feeling the pain over there of that block deal.

01:44:10 Just a quick look at how markets are doing and very tepid and I would say range bound kind of a day.

01:44:16 IT stocks are not having a very great day. Nifty IT also cracking. Let's pull up the quick, the top losers from the Nifty IT.

01:44:23 Reality, another sector, which is seeing a bit of pain today on the market's view.

01:44:29 On the other hand, you have spots of brightness just in some of that pack and really public sector enterprises are the ones who are having a good day.

01:44:39 Today in trade, perhaps with stocks like SJVN, Tata, etc. really pushing up that entire index.

01:44:49 Even NHPC not having a bad day at all in a market which is otherwise quite range bound, to be honest.

01:44:56 NHPC up about 5%. We'll take a very short break.

01:45:00 But when we come back, we're talking about SpiceJet and the ambition of Mr. Ajay Singh to take over Go while getting his own house in order.

01:45:10 Is India ready for an airline revival? We've never seen one yet.

01:45:14 If you rule out Air India, which took decades, can SpiceJet actually step in and revive Go?

01:45:21 All of that and more on the other side.

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