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00:00Hi there, very good morning. You're watching Market Cafe right here on UT. Now, I'm Kanishka Sarkar and with me is Ankita Saksena.
00:07Well, over the next one hour, we'll take you to all the domestic and global deals that you need to watch out for and also tell you about the stocks that you need to keep on your radar today.
00:16Well then, let's get started with an eye on the globe first. Now, let's take a look at how the US market spread overnight.
00:22Now, the Wall Street, yet again, another record high. The major indices closed at fresh record highs overnight with all of them, all the three major indexes extending games.
00:34The Dow first up ended about 0.14% higher. On the other hand, S&P 500, that rose 4% to that 6,693 level. That makes its third straight winning session.
00:48Whereas the tech-heavy Nasdaq index, that jumped 7.75% to that 22,789 odd level.
00:55Now, momentum picked up after NVIDIA surge nearly 4%, announcing a $100 billion investment in OpenAI to build data centers that's reigniting the AI trade.
01:07But now, questions remain on whether lofty valuations can sustain the rally.
01:11Looking ahead, investors await Friday's release of the Fed's preferred inflation gods that the PCE index prefer the policy cues.
01:20Meanwhile, there's political risk that's back in focus with the September 30th deadline for government funding that's looming and fears of a potential shutdown weighing on the sentiment.
01:30So, that's about the US market record high levels overnight, but lots of cues as well to watch out for.
01:35But moving on, Ankita, how are things on the truth side?
01:38Absolutely, Kanishka. We did see another day of record high as far as the US market is concerned.
01:44But oil prices are inched lower.
01:46Now, prices settled marginally lower on Monday as concerns of an oversupply outweighed the geopolitical tensions in Russia and the Middle East.
01:54Now, as far as Brent crude is concerned, the futures settled 11 cents or 2.7% lower to settle in at $66.57 a barrel.
02:01And the global benchmark has now traded between $65.50 and $69 since early August.
02:09WTI contract for October expiring on Monday closed down at $62.64 a barrel, down 4 cents or 1 tenths of a percent.
02:18Now, the more actively traded second month contract was down 12 cents or 2 tenths of a percent at $62.28.
02:24Now, traders are back to focusing on possibly over-supplied global oil market that is soon to come unless the US and the European Union can agree on harsher tariffs on countries that purchase crude oil.
02:37And on the back of that, we do have oil that has settled in lower.
02:42Alright, so that's about oil and the US markets, how they fared overnight.
02:50But moving on, let's get you some top global stories that we are tracking at this hour.
02:54Now, first up, days after the Trump administration had H-1B visa fees to $100,000,
03:00the biggest debt giants are saying that immigration remains whiter to America's future.
03:05Nvidia CEO Jensen Huang said that they want the brightest minds to come to the US,
03:14while OpenAI's Sam Altman has called financial initiative a good step.
03:18Both stressed that the US needs the world's smartest people in the country to fuel innovation.
03:23Next up, hot on the hues of the Intel investment, Nvidia is all set to pump up $100 billion into OpenAI,
03:35this time powering a massive AI data vendor build-out.
03:38The project marked double of Nvidia's output from last year,
03:42and let's say that it's a closed loop of investment and demand,
03:45with OpenAI's surging up user-based fueling chipmates.
03:49CEO Sam Altman keeps major advances ahead, calling the infrastructure push unprecedented in theory.
03:58And France has formally recognized the Palestinian state,
04:02prompting Australia, Britain, Canada and Portugal to follow suit.
04:05President Macron said the move is aimed at reviving peace efforts,
04:09even as Israel rages at the decision.
04:13UN Secretary General Antonio Agutris stressed Palestinian statehood is a ride, not a reward.
04:18Israel, meanwhile, will boycott today's UN Secretary Council meeting on Gaza.
04:26And Disney says that Jimmy Kimmel Live will return today after a nearly a week-long suspension.
04:31The late-line show was pulled following Kimmel's controversial remarks,
04:35linking activist Charlie Kirk's alleged killer to Donald Trump's MAGA movement.
04:41Now, Disney executives have made the call after what the company described as thoughtful conversations with Kimmel.
04:48Moving on, JPMorgan CEO Jamie Dimon is urging progress in U.S.-India trade ties,
04:56telling the Times of India that he hopes Trump and Modi can strike a deal soon.
05:00Now, Dimon said that he'll be engaging policymakers on H-1B visas,
05:05which he noted came out of the blue.
05:07On tariffs, he called them modestly inflationary and little recessionary as well.
05:11Though he has stressed that he's firmly in the free trade camp, except on national security.
05:17Dimon also praised India's economic reform as excellent and a driver of optimism there.
05:24All right, with that, it's time for us to slip into a short break.
05:27Don't go anywhere after the break.
05:28We'll get you more updates on the market.
05:29Stay tuned.
05:30Russian President Vladimir Putin announced that Moscow will voluntarily continue to observe the New START nuclear weapons treaty for one more year,
05:56even after the expiration of the pact with the United States.
06:00Moscow said it expects to take a similar step from the U.S.
06:05Now, speaking at a meeting with members of Russia's Security Council,
06:09Putin said that the pact's termination would have negative consequences for global stability.
06:13All right, then, moving on, as Trump continues to exert pressure on India due to its trade with Russia,
06:24External Affairs Minister S. Jay Shankar met with U.S. Secretary of State Marco Rubio
06:30in an apparent bid by both sides to repair relations,
06:33especially after the 50% tariffs on Indian goods and a hike on H-1B visa fee.
06:38Now, my colleague Sumita Karir has been tracking the development since the very beginning.
06:42She's now joining us with the latest over here.
06:44Sumita, what is the latest that you're picking up from your sources?
06:49Absolutely.
06:50In fact, if you look at the commentary that's been made by the U.S. administration,
06:55which essentially suggests that India is a relationship that the United States has,
07:00and this relationship is of critical importance,
07:03and Marco Rubio has reiterated that if you go by a reader,
07:06that's been issued by the U.S. State Department,
07:09and as part of the conversation between the two sides,
07:13Suleen Marco Rubio and External Affairs Minister Dr. S. Jay Shankar,
07:17the conversation covered a range of bilateral issues of current concern.
07:21In fact, there were also talks on trade, energy, pharmaceuticals, and critical minerals.
07:26So these issues were discussed as well.
07:29And more importantly, India and the United States agreed on the importance of sustained engagement
07:32on progress on these key priority areas.
07:37So definitely this is a positive signal that's coming in from the United States.
07:41Marco Rubio wants to be reiterating that this is a relationship that's important to the United States,
07:46that's of critical importance.
07:47Remember, this meeting is coming in even as India and the United States are negotiating a trade agreement.
07:52We do know that Commerce Municipal is in Washington for trade talks,
07:56and a trade team from the United States this January and 16 September,
08:01and positive discussions were held in this society,
08:04but both sides to intensify efforts in this direction.
08:07However, we have to understand also the other side of this story,
08:11which essentially is the fact that despite the fact that there is a positive commentary
08:16coming in from the United States administration,
08:19if you look at the policies, they seem to be ramping up pressure on India.
08:25For instance, if you see the Shahbahar report of waiver, sanctions waiver that came about,
08:29that really impacts India, given the fact that one of the terminals that's been constructed,
08:34that the Shahbahar report is being constructed by India.
08:37Secondly, this policy related to U.S. increasing H-1B visa fee.
08:42So this is also something that's detrimental to India's interest,
08:46particularly in the technology and IT sector.
08:49And we do know that there is restriction over oil tariffs.
08:51How will these issues really be resolved, even as we are sort of negotiating with the United States?
08:57And will there be any concessions that will be made by the United States,
09:01particularly with respect to its stance on oil tariffs,
09:04particularly with its stance on asking India for market access
09:11with respect to agri-gabrian green crops?
09:14That remains to be seen.
09:18All right, Sumitra, thank you so much for joining us on the phone line.
09:22But we'll move on and see how the Asian markets have opened up.
09:25Well, Asian markets are trading higher today.
09:27That's fueled by a tech rally on the Wall Street
09:29after NVIDIA announced a partnership with OpenAI,
09:32driving investors' optimism about the future of artificial intelligence.
09:36And remember, of course, because of the H-1B visa announced by Donald Trump,
09:41Indian IT stocks are also going to remain in focus.
09:45Now, remember, Japanese markets are closed on account of a holiday,
09:48but the rest of the market, Asia-Pacific market, have opened in the green.
09:52We see Shanghai.
09:53That's actually now trading.
09:55It's turned flat, but nonetheless holding out in the green,
09:58trading with gains of 0.05%.
10:00We have Kospi that's trading up 0.1%.
10:03Hanseng is trading up 0.2%.
10:06And ASX S&P 200, that is trading flat as of now,
10:12is trading nonetheless in the green with gains of 0.03%.
10:16So a little flattish moves coming in,
10:18but nonetheless these markets are holding out in the green,
10:21fueled by the tech rally that we saw coming in on Nasdaq, you know, last night.
10:25So on the back of that, Asian markets have opened in the green.
10:27But Indian market, Nifty is implying a start, a flat start,
10:32albeit in the red, with a shade of red, with cuts of 50 odd points,
10:37or 0.06% is the cut that we are expecting on Nifty.
10:41So very, very flat moves coming in as far as Indian market open is concerned.
10:44Absolutely, a very muted start is what we are expecting for the Indian market.
10:51In fact, the Bachat Utsav failed to cheer the Indian market yesterday as well,
10:56as it ended on the lower side, on the back of sharp cuts,
10:59seen in the last leg of trading, bringing Nifty down to the 25,200 level.
11:05Meanwhile, broader markets mirrored benchmarks.
11:07My colleague Snehi is standing by to get us a roundup of all the market action yesterday.
11:11Well, yes, absolutely tempered day of trade is what we have seen.
11:16And the Nifty ended just slightly off the day's low,
11:20mild recovery towards the market close, 25,202.
11:24So just barely above the 25,200 mark is where we have shut.
11:28Still a 0.5% cut coming in on the Nifty 50, similar cuts coming in on Sensex.
11:33You had bank Nifty that did slightly better than the benchmarks.
11:35But nonetheless, a 0.3% cut is what we have seen over there as well.
11:39The broader markets, that's where we were seeing some more pressure building in.
11:43The mid-cap was in tandem, slightly in tandem with the Nifty,
11:45a 0.6% cut over there.
11:47It was actually the smaller end of the market, the small cap,
11:50that was lower by more than a percent.
11:51And that trend reversal has been seen there.
11:53Because remember, the last couple of trading sessions when the market did well,
11:56it was the small cap index that was leading the gains.
11:59And all of that has reversed.
12:00So take a look at the top Nifty gainers and losers.
12:02First up on the gaining side, Adani Enterprises, a 4% uptick over there.
12:06It wasn't only Adani Enterprises, even from the non-Nifty group of stocks,
12:09the Adani basket of stocks did very, very well.
12:12Adani Power was locked in Upper Circuit, Adani Total, Adani Green Energy,
12:16all of them, including Adani Ports, they have done very well for themselves.
12:20This was followed by Eternal, Bajaj Finance, Ultratech, Adani Ports, Bajaj Auto.
12:24These are some of your top Nifty 50 gainers.
12:25On the flip side, Tech Mahindra, TCS, Infosys, Wipro, HCL Tech.
12:29We have a top Nifty 50 losers because the cuts that we saw on Nifty IT on the back of their H1B visa fee,
12:36that continued to make the entire Nifty IT space mellow, a 3% cut on an intraday basis for Nifty IT alone.
12:45And this was followed by SIPLAT, Automotors, Trent, some of the other top Nifty 50 losers.
12:50Sectorally, it was the day of metal stocks.
12:53They did very well, held on to 0.5% gain because in this time, copper was up 5%.
12:57Media Energy stocks, they continued to trade in the green,
13:00but some pressure other than ITU you had on Pharma, FMCG, PSU Banks, Auto, Bank and Nifty Realty.
13:07Surprising for a day that the GSE rate rationalization came into effect.
13:10Some of its biggest beneficiary sectors, they were deep in the red as well.
13:15Other than that, if you take a look at some individual stock-specific actions,
13:18Swiggy was in the red on the back of a JM Financial downgrade coming in.
13:21Voltas was under pressure on the back of weak management commentary coming in during their annualist meet.
13:26These were some stocks that were in focus.
13:28Anantraj on the flip side continued to do well on the GCC opportunity in India
13:31on the back of all of these IT jobs once again coming back home.
13:35You had other names like NetWebTech on the back of an order win,
13:37Mathoot Finance, NBCC on the back of another order win, an MOU.
13:42They continued to do well in trade.
13:43So, that was the roundup coming in 25,202 is where we shut shop.
13:49All right.
13:49So, that's how we shut shop yesterday.
13:51But before we start trading today,
13:54let's get you all the lowdown on all the stocks that you need to watch out for and keep on your radar.
13:58For that, my colleague, Shishti Sharma is joining us.
14:00Shishti, tell us what are the stocks that you have picked out for us?
14:02Well, yes, a lot of these counters will be in focus today.
14:07Firstly, let's have a look at what these auto counters will do in today's trading session
14:11because we have the likes of Hyundai as well as Marty Suzuki
14:15where they have come out with their day one sales of GSC rollout
14:19and wherein they have recorded a stellar number.
14:22Firstly, when it comes to Hyundai, it's almost 11,000 dealer billings,
14:26the highest in the single year in the past five years' performances,
14:29what the company has highlighted and along with that, even Marty Suzuki,
14:33they haven't seen such a phenomenon in the last 35 years is what they have highlighted.
14:38They have said that they have already recorded 80,000 inquiries on the day one,
14:43have already delivered 25,000 cars on day one
14:46with deliveries expected to touch 30,000 in the near term as well.
14:50The response by the customers has been phenomenal
14:53and they're very excited about the season going ahead.
14:56Along with that, some of these companies like Sangvi Movers, Ace Construction,
15:00they will be in focus as well as DGTR has recommended imposing anti-dumping duty
15:06on imports of cranes from China for the next five years
15:09and that's indeed positive for the domestic companies
15:13from the likes of Sangvi Movers as well as Ace Construction.
15:16Along with that, do look out for ABB India, CG Power, Cements,
15:20TD Power and LG Equipment because there's a positive news for coming in here as well
15:24because DGTR has recommended anti-dumping duty on Chinese electrical steel for five years.
15:30Do note that the green steel manufacturing is also about to start
15:34for the likes of companies Tata Steel as well as JSW Steel and lastly K-Fintech.
15:40A clarification coming in by the company itself and General Atlantic Group,
15:44which is categorized as a promoter and promoter group as of now,
15:48hasn't indicated any intention to sell their stake in the company
15:52wherein there were some reports highlighting the same in some of the reports we did see
15:58and even the stock reacted but the company has come out with the clarification
16:02that they are not aware about any such development.
16:05Back to you.
16:05All right.
16:10Thank you, Srishti, for taking us through all those details.
16:12Lots of stocks to watch out for in today's trading session.
16:15But which are the cues that we need to keep an eye out for?
16:18Snehi is here with just that list.
16:22Well, yes, lots of cues to watch out for.
16:24And it's Tuesday, which means it's the weekly Nifty expiry.
16:26So watch out for any volatility, especially the kind of trading session we've had on Monday.
16:30And other than that, HSBC manufacturing PMI numbers will be out.
16:34Now, the PMI data is not only out for our markets.
16:37You also have manufacturing and services PMI data from US, UK, Eurozone.
16:42So these are going to be some important metrics to watch out for
16:45and crucial data all across the global markets.
16:48Other than that, if you take a look at what else is expected in terms of data from US,
16:52you have current account data.
16:53From Eurozone, you have these PMI numbers as well.
16:56The Japanese markets will be closed.
16:57So it's a truncated week coming in for Japan.
17:00In terms of global earnings, all eyes are going to be on Micron.
17:03But once again, shifting focus back home,
17:05it's going to be the record date for the composite scheme of arrangement
17:08between Piramal Enterprises and Piramal Finance
17:10that merger is going to be taking place.
17:12Sudhaan Chemical Quarter 1 earnings will be there.
17:14So watch out for that.
17:16Pidilite Industries will be trading X-Bonus in the ratio 1 is to 1.
17:19So watch out for that as well.
17:20And you'll have a host of stocks that will be trading X-Bonus,
17:23the likes of India Glycol, Premier Explosives, Suntech Realty,
17:26Talgros and Tilaknagar Industries.
17:28In terms of AGMs, watch out for Star Health, TechnoElectric, ABFRL,
17:32MassTech, GIC, Goodstate, Petronet, Campus Activewear and Dixon Tech.
17:37All of them will be conducting their AGMs as well.
17:40Now in terms of the primary market, lots of new paper hitting the street.
17:43You have Europrateek Sales IPO that will be listing.
17:46So one IPO making its D-Street debut.
17:48Other than that, Jara Institute IPO will be opening.
17:51Solar World Energy Solutions IPO will be opening.
17:53Along with Sharesa Shai Technologies IPO and Anand Rati Shares IPO.
17:58So, well, four IPOs opening, one listing as well as two closing.
18:02GK Energy IPO and Sartre Green Energy IPO will be closing for subscription.
18:06It's going to be the last day to subscribe for these IPOs if you wish to do so.
18:09Last day in terms of other events, it's going to be the day one of the general debate
18:13and at the UN, that's the United Nations General Assembly in New York.
18:17And Donald Trump is also going to be speaking over there.
18:19And the OECD is going to be releasing its interim economic outlook report for the global economy.
18:24So watch out for all of these very important cues.
18:28All right, a whole host of cues to watch out for before the start of D-Street.
18:32But with that, it's time for us to slip into a topic.
18:33Don't go anywhere. We'll be back with more updates on the other side.
18:43He has praised his workforce for maintaining operational momentum amid all the global scrutiny that happened.
19:05Let's listen in to his comments.
19:08Today, a cloud that had hung over us for more than two years has been lifted.
19:25C.B. Comprehensive Investigations has concluded by rejecting all allegations.
19:38It was contained in the Hindenburg report from January 2023.
19:52It was your unwavering faith, your strength and your belief in the company that sustained us.
20:08It was the same.
20:09Throughout this period.
20:14This outcome.
20:18Belongs not only to the Adani group.
20:23But also individually.
20:28To each of you.
20:29who stood by us
20:33and for their support
20:37I am deeply thankful.
20:44And well, the Diwali special Mahurat trading session
20:47will be held between 1.45pm to 2.45pm
20:51this time on October 21st
20:54and the special 15 minute pre-opening session
20:56will take place from 1.30pm to 1.45pm
21:00All trades executed this Diwali Mahurat trading session
21:03shall result in settlement obligations.
21:05The Indian market will be closed the next day as well
21:08that is October 22nd.
21:14Alright, moving on
21:15SEBI has issued a consultation paper
21:18on technical glitches in stockbrokers trading systems.
21:22Ankur joins us now with the details on the same.
21:24Ankur, what are the details that you have picked up
21:25from this paper?
21:28Yes, SEBI has issued a new consultation paper
21:31on the technical glitches in stockbrokers trading system.
21:35Remember, this is not the first time
21:36that SEBI has issued these kind of norms.
21:39In 2022 as well, these norms were issued
21:42but there was a feedback
21:43which was given by the industry
21:45regarding these norms
21:46especially by small brokers
21:48that they will have more compliance burden
21:51and therefore now the definition of
21:54the technical glitch has been simplified
21:58and this time as per revised definition
22:00this will exclude the post-trading hour issues
22:04global service provider failures
22:07as well as KYC process errors
22:09all these things will be kept out of the purview
22:12of the definition of technical glitch
22:14and more importantly
22:15according to the new norms
22:17457 small brokers will be out of these norms
22:21and therefore
22:21the idea of having the same rule for everyone
22:24does not apply here.
22:26The idea is to have an implementation
22:28by 1st of November
22:29but within 2 hours
22:32there needs to be update
22:34given to the regulator
22:35as soon as technical glitch happens
22:37by T plus 1 day
22:38a preliminary report needs to be given
22:40and within 14 days
22:42a root cause analysis
22:43needs to be submitted to regulator
22:45if a glitch happens.
22:49Moving on then
22:50updates coming in from the IPO bound
22:52phone pay
22:52the fintech giant saw 40% growth
22:55in FI 25 revenue
22:56rising 40% on a year-on-year basis
22:58to 7,115 crores
23:00phone pay continued to improve
23:02its bottom line
23:03with adjusted EBITDA
23:04including the ESOP cost
23:06more than double
23:07to 1,477 crores
23:09now the company also recorded
23:11a positive EBITDA
23:12adjusted EBIT
23:13excluding the ESOP cost
23:16for the first time
23:17that is at 117 crore rupees
23:20now these results
23:21further reflection of phone pay
23:23diversifying offerings
23:24for consumers and merchants
23:25over the last couple of years
23:27additionally
23:27with its entry
23:29into the loan distribution
23:30and stock broking
23:31adding to its existing payments
23:32and financial services suit
23:34now the company also plans
23:36to file its DRHP
23:37later this year
23:38for a potential listing
23:39on the Indian exchanges
23:40as recently reported
23:42in the media
23:43all right
23:48moving on then
23:49now to some macro data
23:50now India's core sectors
23:52expand at the fastest pace
23:53in over a year
23:54it's in fact
23:55at its highest level
23:56in 15 months
23:57for the month of August
23:59core sectors
23:59grew at 6.2% annually
24:01compared to 3.7%
24:03in July
24:04now all the 8 sectors
24:06comprising
24:06steel, coal, cement, fertilizers
24:09natural gas, petroleum
24:10refinery products
24:11crude oil
24:12and also electricity
24:13they expanded
24:14now the growth
24:15was led by steel
24:16cement and coal
24:17the steel sector
24:18grew the most
24:19at 14.2%
24:20year on year
24:21while crude oil
24:22and natural gas
24:23were the only sectors
24:24to underperform
24:25and we also spoke
24:28to top market experts
24:29at JP Morgan
24:30and India's growth
24:31outlook going forward
24:32let's go across
24:32and listen in
24:33to understand
24:34their view
24:34on the key
24:35headwinds and tailwinds
24:36impacting the Indian economy
24:38global equities
24:40have gone up
24:41our valuations
24:42do not look
24:43as bad
24:44as they did
24:44and more important
24:46is if you now
24:46split it into sectors
24:47right
24:48let's take the
24:48financials cohort
24:49our banks
24:51even in a slowing
24:52economy
24:52will still deliver
24:53a certain degree
24:54of earnings growth
24:54with a high degree
24:55of confidence
24:56for the next three years
24:57shorter term returns
24:58are made on
24:58earnings surprises
24:59not growth
25:00we've done a lot
25:01of quantum work
25:02on this
25:02and if you're
25:04an investor
25:04for 12 months
25:05or less
25:05you are looking
25:06for companies
25:07that are going
25:07to beat
25:08expectations
25:08of growth
25:09right now
25:10that appears
25:12difficult as well
25:12because
25:13yes things have
25:15gotten right size
25:16on the forecast
25:16but do I have
25:18enough momentum
25:18for a large set
25:19of companies
25:20to surprise
25:20your earnings
25:21I don't see
25:22that yet
25:22India has been
25:23running on
25:24essentially
25:25two engines
25:26of growth
25:26which is
25:27services
25:28exports
25:29built up
25:30by the global
25:31capability centers
25:32and infrastructure
25:33corporate investment
25:34as a share
25:36of GDP
25:36has been
25:37flatlining
25:38since 2012
25:40at 12%
25:42we need to
25:42really
25:43actually find
25:44alternative
25:45engines
25:46of growth
25:46and the corporate
25:48sector is
25:48you know
25:49flatlining
25:50at 12%
25:50because there
25:51are no alternative
25:52we haven't
25:53identified
25:53alternative
25:54sources
25:54of growth
25:55alright then
25:58that's the
25:58latest word
25:59coming on
25:59the economy
26:00but in fact
26:01we also had
26:01visuals of
26:02finance minister
26:02Nirmala
26:03Siterman
26:03visiting the
26:04shops in
26:05Delhi's
26:05Lakshminagar
26:06to get the
26:06first hand
26:07reaction of
26:08consumers
26:08and shopkeepers
26:09as the GST
26:10Bachat Utsav
26:11commenced
26:12yesterday
26:12marking the
26:13nationwide rollout
26:14of the next
26:15gen GST
26:16reforms
26:16the shopkeepers
26:17could be seen
26:18thanking the
26:19finance minister
26:20for the relief
26:20to customers
26:21because of
26:22the GST
26:22rate cuts
26:23as the
26:23finance minister
26:24thanked them
26:25for their
26:25feedback
26:26now the
26:26finance minister
26:27also encouraged
26:28everyone to
26:29buy and
26:29sell
26:30made in India
26:31Swadeshi products
26:32echoing
26:33Prime Minister
26:33Narendra Modi's
26:34call to embrace
26:35Swadeshi in our
26:36daily lives
26:36earlier today
26:37the Prime Minister
26:39has also
26:39interacted with
26:41traders and
26:41entrepreneurs
26:42in Itanagar
26:43as the GST
26:45rate cut
26:45came into
26:46effect
26:46and when
26:49the Consumer
26:49Affairs
26:50minister
26:50hails the
26:51next generation
26:52GST reforms
26:53in an exclusive
26:54chat with
26:54Itanau
26:55Prahlad Joshi
26:56says from
26:57majority of
26:58food items
26:59to renewable
26:59equipment
27:00every industry
27:00is poised
27:01to benefit
27:02and they
27:02are keeping
27:03a close
27:03watch
27:04let's listen
27:04all Indian
27:29breads are
27:30zero
27:30majority of
27:32food items
27:32either
27:33zero
27:33or five
27:33percent
27:34so yesterday
27:36Karnataka
27:36Mill Federation
27:37has given
27:38advertisement
27:3840 rupees
27:39this is the
27:43biggest ever
27:44gift to the
27:46people of this
27:47country by
27:48Prime Minister
27:48Shri Modi
27:49after taking
27:51over as the
27:52Prime Minister
27:53many reforms
27:54under the
27:55leadership of
27:55Prime Minister
27:56it is done
27:57I can say
27:58the reform
27:59really the
28:01reforms have
28:02reforms began
28:03only after
28:05Modi
28:05I think
28:07a sub
28:08reform
28:09how do you
28:14monitor this
28:14how do you
28:15monitor it
28:15we are
28:16monitoring
28:16we have
28:17established
28:17a helpline
28:18and in the
28:20consumer affairs
28:20department
28:21also where
28:22the consumer
28:22related items
28:25are there
28:26if there
28:27if there
28:27is not
28:28a
28:28lab
28:29we have
28:32to monitor
28:33it
28:33we have
28:33to monitor
28:33all right
28:34so that's the
28:34latest coming
28:35from the
28:35consumer affairs
28:36minister but
28:37moving on the
28:37next gen
28:38GST reforms
28:39are transformational
28:40that's the word
28:41coming from
28:41ITCCMD
28:43Sanjeef Puri
28:43we had an
28:44exclusive
28:45interaction with
28:46him and he
28:46also added
28:47that this
28:48move will
28:48boost
28:48consumption
28:49employment
28:50and also
28:50drive economic
28:51growth
28:51let's listen
28:52into his
28:52comments
28:53transformative
28:55reform
28:56it's going
28:57to make
28:58good quality
28:58products
28:59accessible
29:00prices will
29:01go down
29:01for every
29:03consumer
29:03there will be
29:04a lot of
29:04savings for
29:05consumers
29:05I think we
29:07should all
29:07celebrate that
29:08and it's
29:10also you know
29:11backed up by
29:12simplification that
29:13will improve the
29:14ease of doing
29:14business and
29:16at ITCC we are
29:16all committed to
29:17passing on all
29:18the benefits to
29:19the consumer
29:19sir can GST 2.2
29:21spark a new
29:22cycle of demand
29:23in the economy
29:23yes absolutely
29:25it's going to
29:26fuel consumption
29:28and therefore
29:29investments and
29:30leading to
29:32employment so
29:32it's going to
29:33set in place
29:33a virtuous cycle
29:34it's a start of
29:35the festive season
29:36as well so
29:37how this move
29:39is going to
29:40positively impact
29:41the overall
29:41demand
29:42it will be
29:43very positive
29:44it will be
29:45very positive
29:45and I
29:45congratulate the
29:47honourable
29:48prime minister
29:49for his
29:50vision and
29:51direction to
29:51get this
29:53week done
29:54because it's
29:55truly transformative
29:56and it's going
29:57to have a
29:58very significant
30:00positive impact
30:01on the economy
30:01alright it's
30:04time for a
30:04quick breeder
30:04don't go anywhere
30:05more updates
30:06on the other
30:06side
30:06wherever
30:19I
30:24I
30:26can't
30:26look at
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33:01That's the debate we will have now. But a discretionary cohort is conceptually more, let's say, or starts to gain more from the price cuts that we expect will happen.
33:14So the consumption theme will be broken down into, you know, where is it coming from, right?
33:20At the base level, which is the entry levels for many of them, or premiumization. And we saw that in the last 12 to 18 months, you know, saturation of premium brands which is coming in.
33:33So do you see that kind of trend to continue or, you know, you're going to see some base level, you know, consumption now coming in because of the kind of money which is there?
33:44The hope is for the latter. And I'll tell you why. Because it's not just the cut in GST. You also have to look at the impact of the reduced borrowing costs as rates have come down and the tax cuts that were implemented in February.
33:57So if you add up all of these three and look at the monthly EMI payments for an entry level car, that's actually come off quite a bit.
34:05So you could sort of argue that the affordability of an entry level car has been pulled up by a year or two.
34:13Okay. That's a meaningful change for a household that was on the edge, that was debating, okay, look, should I borrow some and should I start to, you know, buy my first car?
34:23And there is an argument that these changes will tip it over.
34:27Because the inflation that happened in the last 12 to 18 months have eaten into the savings of households.
34:33And now this cuts, whether it's a tax cut and RBI rate cut, which has brought down EMI or now the GST cut, you know, is bringing in that, you know, buffer for them.
34:43So is the household now going to invest into consumption or into capital markets or going to put the money into bank FDs?
34:53So I'll refer to RBI consumer sentiment data.
34:56Right now, this is soft data.
34:58They, and it's based on a small sample.
35:00But I find it very instructive.
35:02So what the urban consumer sentiment data says is that household sentiment, which was, let's say, 100 pre-COVID, fell to 60 during the lockdowns, went back to 100 in the reopening, and then fell down to 96 or 97.
35:14That subsequent collapse is what caught all of us off guard.
35:17So why has that happened?
35:19Sentiment on incomes is flat, which we can all relate to, right?
35:22So post-e-reopening, there hasn't been that much of wage growth or income growth.
35:27Cost of living has gone up.
35:29This is the RBI data again.
35:31And cost of living includes your rentals, the school fees, health care costs, the inflation, but it doesn't include the consumption cost of lives.
35:38It's your basic cost of living goods.
35:40And as a result, the ability of people to spend on non-essential goods is now subpar.
35:47So the weakness in consumer spending is essentially weakness in non-essential spending, okay?
35:52So our argument, therefore, is that when the government provides this kind of a stimulus, multi-pronged really, it is that variable which should start to move up.
36:02The pressure on a household's budget was that we were tightening our belts.
36:06So now that I have a little bit of relief, that area should ideally see a bit of a dump.
36:11Foreign investors as a whole, they've been selling for the last couple of quarters there.
36:17But it's been supported by the domestic investors who have been buying on a daily basis.
36:20In fact, they are outsmarting them in terms of buying.
36:24And, you know, the reason was that India is overvalued or richly valued at that point in time.
36:30The valuation has almost remained the same.
36:32The earnings have come up a bit there, but they're still richly valued in that sense.
36:36So how is the foreign investors now looking at it?
36:39They expected a correction in the valuation to come back into the market.
36:42And that's not coming.
36:44The relative valuations have gotten better.
36:46And that's the point I was making.
36:47Because global equities have gone up, our valuations do not look as bad as they did.
36:53And more important is if we now split it into sectors, right?
36:56Let's take the financials cohort.
36:58Our banks, even in a slowing economy, will still deliver a certain degree of earnings growth with a high degree of confidence for the next three years.
37:05But look at what's happened to global financial multiples.
37:08All global banks have been on a secular rally this year.
37:12And if you look at India financials, premium to global financials.
37:15It's actually come off quite a bit, right?
37:17So in contrast to what's happening in the rest of the world, our valuations do not look as prohibitive as they were, let's say, early 2024.
37:24So as an investor, if you were to make a portfolio fresh based on this premise about the domestic story being so strong on India
37:32and lesser reliance on export-oriented economies, what should be my biggest sector, overwaves and underwaves?
37:40So let me answer that question two ways, right?
37:43If you're a 3 to 5-year investor, you look for compounding growth.
37:46The growth expectations will need to be watered down a little bit, right?
37:50One, because the economy itself is a little bit slower.
37:53Just take the stark contrast in nominal GDP growth.
37:55It was not of 20% FI23.
37:58It's now probably going to be 8%.
37:59And there isn't a view that this 8 is going to 12 very early in a rush.
38:04It probably goes to 9 or 10 over the next three years.
38:06But we are in a more subdued economic growth activity, which will therefore tampen the earnings growth and therefore possibly equity returns.
38:14The other argument we make is that shorter-term returns are made on earnings surprises, not growth.
38:19We've done a lot of quant work on this.
38:21And if you're an investor for 12 months or less, you are looking for companies that are going to beat expectations of growth.
38:28Right now, that appears difficult as well.
38:31Because, yes, things have got a right size on the forecast, but do I have enough momentum for a large set of companies to surprise me on earnings?
38:40I don't see that yet.
38:42So, my suggestion is, it is still a better asset to own in the India context, especially given the tax structure that we have locally.
38:50But do not expect a high double-digit compound.
38:53All right, so that's the latest word coming from Sanjay Mukhimov, J.P. Morgan.
38:57But on that note, it's a wrap on this edition of Market Cafe.
39:01We are completely timed out.
39:02Ankita and I will take your leave, but don't go anywhere as the market will take all the action forward.
39:2315 years at the front line of India's policy and power.
39:29On the ground.
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39:43Every fact checked.
39:4515 years of decoding the government's mind.
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