- 5 months ago
With the festive season approaching, experts believe that automobile companies will be among the biggest winners of the recent rate cuts in GST.
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00:00Good morning and welcome to market opening on our brand new collab show between Business Today
00:04and India Today TV. It's just after 9am and we're here to get you ahead of the curve as markets
00:10kick off trading for the day. From the big overnight queues on Wall Street and global
00:14markets to the buzz around corporate earnings, policy moves and stock-specific action. We break
00:20it all down so you know exactly what to watch. Stay tuned as we track the Sensex, Nifty and the
00:25stories that will drive the market mood today. And catch us again at market closing with my
00:30colleague Sakshi Batra. We've got you covered. Let's take a look at what's hot in the corporate
00:35and financial space this morning. Wall Street soared overnight with the S&P 500 hitting a fresh
00:44record close. Tech giants led the charge. Amazon jumped over 4% while Meta and Broadcom also gained.
00:51Investors brushed aside soft labor data, keeping focus on Friday's all-important jobs report and an
00:57expected Fed rate cut. US President Donald Trump hosted over two dozen top tech leaders at a White
01:06House dinner last night. Industry heavyweights including Mark Zuckerberg, Tim Cook, Sundar Pichai
01:11and Sam Altman all praised Trump's pro-business stance, pledging massive investments in US innovation.
01:17A notable absentee was former first buddy Elon Musk.
01:24Trump tariffs seem to be opening the doors for higher Chinese investments into India.
01:29There are reports that the government is planning to ease curbs on companies with small Chinese
01:34holdings which currently face several restrictions.
01:37footwear major Bata has taken the lead in passing on benefits of the GST cut. The company has launched
01:48its Bata price promise initiative, instantly passing on a 7% price reduction on footwear priced
01:55below 1,000 rupees by absorbing the GST rate cut, which came into effect September 22nd.
02:04Morgan Stanley expects Apple to modestly increase the iPhone 17 prices at its launch event on 9th September.
02:10It will be the first real hike by Apple for a new iPhone model since 2017.
02:15The iPhone 17 Air is expected to be priced at a premium over the current iPhone 16 Plus while
02:21the Pro model will start at $1,099.
02:24All right, let's take a look at the market set up this morning. Global queues all positive.
02:35We're coming through on a positive move on Wall Street and Asia also green across the board this morning.
02:40Remember markets have been watching out for news of the Fed rate cut and of course the big GST news
02:45in the domestic markets as well. Pre-open also looking steady uptick there 0.3%.
02:50I've got Ajay Baga with me on the phone line. Let me go across to him.
02:54Always great to speak with him. He's a market veteran.
02:57And Ajay, you know what really stood out to me?
02:59And of course, Shail Damania also joining us this morning.
03:02Shail, great to have you with us.
03:04Let's go across to Ajay on really his views because yesterday he was so bullish.
03:09Ajay post the GST reform news talking about the kind of impact we'll see in the market.
03:13And we're already seeing evidence with Bata being the first to kick off that, you know,
03:17passing on the benefit to the consumer. What is the kind of impact you see on consumption?
03:23And with markets as well kind of holding steady on the news,
03:26do you anticipate they're going to pick up as we close the festive season?
03:30Yeah, definitely Abha. Overall, if you look at the consumption pack, I spoke to across industries.
03:39I spoke to friends in senior places or industrialists.
03:44The car dealers are very enthused. I spoke to North Delhi, one of the biggest chains.
03:50And they said, we are going to see a bumper festival season with this 10% kind of pass-through.
03:58They were a little worried on how the inventory would be treated, but they said, we'll figure it out.
04:04I'm sure some FAQs will come out. FMCG majors are again very happy with this kind of change.
04:15The ex-Amul MD, I was speaking to him, Mr. Sodhi, RS Sodhi, and he was saying about 11,000 crores is the savings
04:25that households will have on dairy items going down to 5% or 0%.
04:31And he says that normally a 5% fall in Amul products translates into 20% more demand.
04:39That's the kind of multiplier that comes in.
04:42Real estate people welcoming the reduction in the cement GST.
04:48They said it will have a minor impact, 12 to 14% of the housing and construction cost is cement.
04:57So he said it's very welcome for that. So across segments, I could see a lot of enthusiasm.
05:04It didn't come, it didn't flow through the markets. It started well, but the markets ended up a little on the negative side.
05:13I think that was more a function of the expiry yesterday of the Sensex.
05:19And as well, a lot of it was discounted post the PM speech of August 15.
05:25But going ahead, I'm seeing a consumption boom, which will have a multiplier and which will see these companies doing well.
05:33All right. My colleague Shailendra Bhatnagar, the Chief Analyst and Editor of Markets at Business Today also with us.
05:42Shail, I want to bring you into this conversation because I know you've also been tracking Ajay's comments very closely.
05:47Yeah. Good morning to you Abha and Ajay. A very warm welcome Ajay.
05:52How do you see fresh money getting deployed in the markets? Any sectors that you have at the top of your mind as also maybe some stocks that our viewers could be interested in?
06:04Yeah. Morning Shail. I think the biggest beneficiaries, of course, the turnaround will be staples as well as durables.
06:15I was on a show with the Blue Star MD, Mr. Tyagrajan, and he was mentioning about a 10 percent jump in demand that he sees for air cons.
06:27Of course, most of the season is gone now and it has been a not very great season.
06:32But he was saying with these kind of tailwinds, they should see a pickup coming ahead.
06:39So overall, I think staples, durables, these will do very well.
06:44Autos, especially on the lower end segment, I think this will give a big boost to autos.
06:51Tractors, it was totally unanticipated. Tractors being brought down to 5 percent.
06:58Again, motorcycles with a strong rural demand already there.
07:03Mobikes about 60, 70 percent get sold in semi-urban and rural areas.
07:09And the lower end mobikes are 95 percent of volumes.
07:14So they get a big boost with this reduction.
07:18And then if you look at a whole gamut of housing materials, construction material companies,
07:26I think all these will benefit a lot from this.
07:30Still being analyzed to see the deeper part.
07:35I think insurance, our first thing was that life insurance and health insurance companies
07:41do benefit from higher volumes, but they are asking on the input tax credit.
07:47So maybe about one third of the GST gain will go towards ITC setups.
07:54We'll have to wait and watch that.
07:56But definitely there will be a volume expansion.
07:59They will be able to offer products at a cheaper price point to customers, which should see a volume expansion.
08:06NBFCs are looking very good because their funding costs go down and they will have a bigger market to address.
08:14So as the consumption pool increases, overall, if you have to put it in perspective, 48,000 crores is the consumer saving over the next six months.
08:26Add to that 10 percent nominal growth every year.
08:30So you're looking at 50, 52,000 crores, maybe 1 lakh crores annualized.
08:36And this is not a one time stimulus.
08:39This is an embedded stimulus, a structural stimulus, which goes into the economy every year.
08:45So it's going to have a multiplier impact going ahead as well.
08:50So not only this festive season, but as the rates stay at these levels, more purchasing power and the rupee in the consumer's pocket gets stretched.
09:00That is the basic structural story.
09:03The market understandably also is skeptical.
09:07So we didn't see moves yesterday after the opening frauds that we had.
09:13But overall, I think as the numbers come in post the festive season or during the festive season, we should see that.
09:23And as the overall, as the new crop also starts coming in, we will see these sectors benefiting.
09:34Overall, rural demand is strong.
09:36Urban has been lacking.
09:38This might be the stimulus that we need.
09:42Great to get a comprehensive view of everything that's looking good and markets opening on that note.
09:470.3% uptick this morning.
09:49Remember, we're coming off a positive move on global markets as well.
09:52Tech in play on US overnight.
09:54Asia green this morning.
09:55Nifty Bank also up about 0.2% at this point of time.
09:58IT also in the green.
10:00Otherwise, it's been lagging pretty much during the week.
10:02Positive sentiment across.
10:03Nifty Auto sustaining that uptick.
10:05It's been a big week for auto stocks.
10:07Nifty Consumer just about flat, but also in the green.
10:09It's a really good breadth of the market that I'm seeing on open immediately right now.
10:13Even better than possibly than we've seen over the last couple of sessions.
10:17Nifty Realty also up close to about 0.5%.
10:19The real estate play continues to look strong.
10:21Healthcare up close to 0.2% this morning.
10:24And the Nifty Metal index also up 0.32%.
10:26Stocks like Hindustan Zinc, for example, have really been shining this week.
10:29Nifty Midcap 100 in the green and a small cap as well.
10:33So like I said, the breadth is looking good this morning.
10:36It may not be some kind of runaway buying, but it's looking healthy.
10:39It's looking strong.
10:40Momentum seems to be intact.
10:41And clearly the mood seems to be intact as well.
10:44Muthud Finance, let's bring that up for you.
10:46Let's take a look at Defense Index.
10:47Remember, a lot of outlay being planned there and acquisitions.
10:51So clearly in the news, we've got gold financing back in the buzz.
10:55Has been through the week.
10:56Muthud today also up about 0.5%.
10:58But it's at a record high and that's what's important.
11:01Also set to benefit, of course, post those record highs that we're seeing on gold prices.
11:05Manapuram Finance also up 0.6% this morning.
11:08So we're seeing some move coming in there.
11:10Let's bring up Adani Power for you as well.
11:12We're going to talk a little bit more about that stock post the stock split.
11:15But this morning, let's take a look at how it's trending on your screens.
11:18And of course, let's take a look at Auto as well.
11:21Adani Power just flat.
11:22We'll come back and talk about it in a moment.
11:24Let's put up some of those auto names.
11:25Escorts, M&M.
11:26We've been tracking them for you through the week.
11:28Nifty Auto is up about 10% this month.
11:30Let's take a look at how some of these names are doing today.
11:33Ashok Leland, 1.5%.
11:34But let's bring up Escorts.
11:36Let's bring up M&M.
11:37Bajaj Auto also positive.
11:39As Ajay was saying, two wheelers are set to benefit, especially on the lower end.
11:43We're seeing the low income boost coming in, of course, on consumption and ahead of festive season.
11:49Tata Motors up 0.3%.
11:51And TVS Motors.
11:53So, all the two wheeler stocks there.
11:55But I'm still waiting on Escorts and M&M.
11:57The tractor play is also what I want to address in the markets today.
12:00And to take a look at how some of those names are doing.
12:03Escorts still up about a percent.
12:04Remember, it's been moving all week.
12:06It was particularly the strongest to move post the GST news.
12:10And set to benefit on the rural consumption play as well.
12:14We've also got a good monsoon coming in for some of those counters.
12:19We've got reduced cuts coming in.
12:21So, all of that feeding into some of these names.
12:23Ashok Leland, add that to the basket as well.
12:25Up about 1.5% there.
12:27So, that's really looking good for you when it comes to the auto names, financials, insurance.
12:31Let's pull up some of those names as well.
12:33And just take a look and see how they're supporting the markets this morning.
12:36And I'm also going to go across to Shell.
12:38Shell, some of the top movers that you're spotting and also the key names that you anticipate are going to remain in use this morning.
12:45I think Abha, two stocks that require mention are Mahindra and Mahindra.
12:52The reasons that you mentioned were very clear.
12:54You have a good monsoon.
12:56You have the GST cut playing in.
12:58And of course, it's the rate cut that had happened by the RBI earlier.
13:04So, all of that is getting priced into stocks like Mahindra and Mahindra.
13:09Fresh record high.
13:10In fact, if you look at the past five-day performance, M&M is the top performer with a 9% rally.
13:16And also Bajaj Finance, as Ajay was very, very rightly mentioning.
13:21NBFCs are going to be one of the biggest beneficiaries of this GST rate cut.
13:26Simply because a lot of consumers will come back to showrooms and get all these articles like air conditioners, like ACs, like smaller cars, bikes and all financed by the country's largest NBFC, which is Bajaj Finance.
13:44This also is up about 7-8% in the past five trading sessions.
13:50Getting Ajay into the conversation, one very quick view on Bajaj Finance, Ajay.
13:55Is this something or a stock that is going to benefit because of an early Diwali on Dalal Street?
14:02Shail, I'm constrained in not speaking on particular stocks.
14:08But if you look at NBFCs across housing finance, we see the basic demand driving it.
14:15And what you mentioned, the RBI rate cuts are helping a lot.
14:19Most of these NBFCs are wholesale funded.
14:23They have some amount of retail core liabilities as well, but mostly they borrow on the wholesale market where the prices have been going down.
14:34Their cost of funds are going down.
14:36Yesterday, if you see a truck finance major from the south spoke about seeing revenues, the revenue guidance, it up from 15% to 18% on the back of these GST cuts.
14:53So overall, the lenders will benefit.
14:58NBFCs will benefit faster.
15:00Even the fintechs who are into lending because it's the festive season coming up and the base demand goes up.
15:07That will see even the fintechs benefit there.
15:11Most of them are unlisted, so not very relevant to public market discussions.
15:17But their loans are then downsold to NBFCs and banks.
15:22So the whole ecosystem is going to benefit.
15:26And the top NBFCs, I would say, are amongst the best buyers right now.
15:31So the top 4-5 NBFCs across sectors can be looked at.
15:36Absolutely.
15:37Ajay, one more question for you.
15:40How would you advise our viewers to look forward to the next six months to one year, given that you've had a 100 basis point rate cut by the RBI.
15:50Earlier, the finance minister had given a bonanza on income tax cuts.
15:55And now, of course, these GST cuts.
15:57Is Diwali coming in early?
15:59Do you see the market hitting a new high in calendar 2025?
16:04Calendar, yes.
16:06I don't know because Diwali is October 21st, 22nd.
16:11So we don't have too much time for that.
16:14And there are pockets of very strong resistance on the indices.
16:21Again, Shell, the issue with the index is IT.
16:25IT underperforming.
16:27Then we have had banks underperform, financial underperform.
16:31That has taken 50% of our market into an underperformance zone.
16:36I think with these GST cuts, we will see a slow and steady recovery in banks.
16:41Rest of the financial pack also should see a recovery.
16:45IT is probably some time away.
16:48So I would say definitely by calendar year, we should again revisit last September's highs.
16:56The good news is 12 months, for 12 months, we have just traded water.
17:01And these markets have really underperformed versus emerging markets and developed markets both.
17:07Normally, when you get this level of underperformance, the next 12 months start looking quite good.
17:14So we have spent 12 months marking time around these levels and below the all-time highs.
17:21I think the next 12 months could be quite significant.
17:26Yesterday, Shell, I was on another program and where, you know, the Prime Minister's Economic Advisory Committee member mentioned something very significant.
17:38He said that under Rajiv Gaba, the former Secretary of Government of India, two committees are now working on deregulation and looking at ease of doing business.
17:50So the government is really looking at that deregulation part very closely.
17:56I think you have the Jan Vishwa's bill already before Parliament, 357 amendments are there which decriminalize most small-time misdemeanors.
18:09So things like that are also coming.
18:12But overall, just on our fundamentals, I would bet 12 months from now, we would be at a good position with these markets.
18:21We have really underperformed and we are set now to outperform over the next 12 months.
18:28Okay, amazing.
18:29Let's take a look at some of the top movers today.
18:31Got lots of action coming in in the markets.
18:33Let's pull up some individual stocks for you and see where some of that action is happening.
18:38We've got Sterlite on the move this morning.
18:40We've got a bunch of the financials on the move as well.
18:42There you have it.
18:43A whole host of gainers across the broader markets as well.
18:47Nifty 50, almost everything close to a percent up.
18:50We've got the Nifty 500 also on the move this morning.
18:53So we're seeing, definitely seeing, you know, a better start that was indicated perhaps even in the pre-open.
18:58Strong moves coming in on the index names as well as the broader markets name.
19:02SKF is up 5%.
19:03Got RBL Bank on the move.
19:05Godrej Agro.
19:06And remember, the entire rural and agro theme is set to play out as well.
19:09We've got a whole host of new highs coming in.
19:12Real estate stocks.
19:13DLF, for example, is up close to 2%.
19:15New highs.
19:16M&M, we've been discussing.
19:17M&M, we've been discussing.
19:18Muthut, we've been discussing.
19:20We've got LTF also.
19:21Anand Rathay is also, you know, red on the screen, but it's actually at a new high right now.
19:26So lots of action coming in there.
19:28Trent is up close to a percent.
19:29Again, the retail play over there.
19:31Asian Pains looking good.
19:33SPI Life.
19:34We've been discussing some of those financial names.
19:36Insurance names.
19:37Sriram Finance.
19:38Again, moving well.
19:40Auto across the board.
19:42Geofin also moving up about 6 tenths of a percent.
19:45And Last Natubro Finance.
19:47That's the one as well at a new high coming in there.
19:50So you can see some of the clear themes that are playing out as well as the fact that sentiment overall seems to be, you know, spreading into the breadth of the market as well.
19:59We're almost towards the end of the show.
20:01So I do want to take some closing comments from Ajay.
20:04And I also want to get a note on Adani power from Shell.
20:07Let's try and squeeze this in.
20:08Ajay, before I let you go, I know you've given us an outlook for the next six months.
20:12But, you know, just a closing comment from you.
20:14The market's looking really good today.
20:16The market will do better, Abha.
20:18And what we are waiting, a Diwali gift from Trump also.
20:22If he removes the punitive 25%, then this market will just rock on.
20:27So right now what's holding back sentiment is the U.S. tariff.
20:31It's not that big in the whole scheme of things, but it's spoiled sentiments to some extent.
20:36I think that will happen, whether it happens by November or pre-Diwali, let's see.
20:42But it is going to come.
20:44Yesterday also, Piyush Goyal mentioned that they are looking at a November timeline for a BTA.
20:49It will eventually happen.
20:51Ukraine has to settle down.
20:53Russia also will want to settle it.
20:55So that will be one catalyst.
20:57Otherwise, we wait for earnings recovery, which again, this quarter, the last quarter gone by has been the bottom.
21:04From here on, green shoots are already there.
21:07You will see a good September.
21:09And then as these GST cuts come in, consumer consumption picks up, you will see a much better last quarter of the calendar year.
21:19So recovery is coming, but it could be hastened if Trump removes this 25%.
21:26Okay, great. Ajay, thanks so much for joining us this morning.
21:28Absolutely fantastic to have you with us and give us a perspective on how things stand.
21:33Adani Power has seen, you know, shareholders approve a stock split.
21:38It's a five to one stock split.
21:40And the record date hasn't yet been announced, but it has come through in the exchange filing.
21:45Let's go across to Shell on this.
21:47Shell, what does this mean for Adani Power?
21:49Clearly, it's a liquidity injection.
21:50Clearly, it's to attract retail investors.
21:52Will it make sense for retail investors to look at this?
21:55Absolutely, Abha.
21:57Two or three points that I'd like to mention on Adani Power.
22:00This is the best performing power stock in the BSE Power Index on a year-to-date basis, which is in 2025.
22:08It's up about 50 odd percent.
22:11And yes, the reason for this stock split is very simple.
22:15If you have 100 shares of Adani Power, you will have now 500 after the record date comes into effect.
22:23And it essentially means from about 610 rupees, the stock will now go down to somewhere like 130, 140.
22:32Remember, the all-time high for Adani Power was somewhere like 850 rupees, which we saw in June of 2024.
22:41So, the stock becomes a little more affordable for investors, as also the fact that the fundamentals of Adani Power are really, really very strong.
22:53If you look at how there is a brokerage called Incred, they have a price target of about 650 on Adani Power.
23:04And they hope that operating profit of Adani Power between FY25 to 28 will improve by 11 percent each year.
23:14As you and I were talking about Adani Power before markets opened, they also have permission from the government to get their Dharali mine in Madhya Pradesh operational, which essentially means fuel security.
23:29There is a lot of expansion in the pipeline, somewhere to the tune of 3.2 gigawatts, of which 2.5 gigawatts is coming in Bihar, where elections are supposed to be held in November.
23:41So, all told, this was one of those very high beta user-friendly stocks for shareholders.
23:48And maybe you'll again see a lot of momentum coming back in Abha.
23:53Great. Thanks so much for that, Shail. And with that, we close this edition of the Business Today show.
23:59Do stay tuned on India Today for a lot more news and catch up again at market closing with my colleague, Sakshi Bathra.
24:05Markets, of course, kicked off on a really good note today.
24:08We'll keep tracking all of those key moves for you as we count down.
24:12Bye.
24:13Bye.
24:14Bye.
24:15Bye.
24:16Bye.
24:17Bye.
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