- 18 hours ago
Mehli Mistry’s caveat after his removal from the Tata Trusts board is unlikely to impact Tata Group’s operating companies, shares expert.
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00:00Good afternoon and welcome to the Market Closing Show.
00:03This is the collab show between Business Today and India Today Television.
00:06I'm Sakshi Patra. This is the 3 p.m. show where we are going to be getting you all the market closing action.
00:11First up, let's take a look at what's hot in corporate and financial space.
00:21Volatility grips markets. Nifty trades near 25,750.
00:24The Sensex stays below 84,000. IT and FMCG drag while PSU banks rally with the nifty PSU Banking Index up by 2%.
00:33Pharma and metal stocks also see strong buying today.
00:42Auto stocks in focus. Maruti Suzuki slips near 3%.
00:45That's despite posting highest ever monthly sales in October.
00:49M&M gains about 3% after reporting 26% growth in overall auto sales.
00:53Bajaj Auto's total sales also surged by 8% with the stock trading in the green.
01:06It's IPO frenzy on the LAL Street.
01:08Lenskart is subscribed two times on day two.
01:10But its grey market premium has now cooled to Rs.56.
01:13Studs sees strong response, subscribed 20 times by day three, right ahead of its November 7th listing.
01:20Up next, Pine Labs' Rs.3,900 crore IPO opens on November 7th.
01:29In yet another stark example of the IPO mania on D Street, the Rs.6,630 crore public issue of Grow has now received anchor bids of more than Rs.50,000 crore.
01:40This is more than 16 times its anchor book of Rs.3,000 crores.
01:44Investors include SPI Mutual Fund, Sovereign Funds from Abu Dhabi, as well as Singapore and Norway.
01:50Big legal challenge to trust Tata Trusts as the ousted trustee Melly Mistry now has filed a caveat with the Mumbai Charity Commissioner,
02:06ensuring his objections are heard before changes in the all-powerful Tata Trusts are formalised.
02:12His argument is contingent on a resolution passed last year, which made all trustees permanent after the expiry of their tenure.
02:32Straight away looking at how the markets are trading in the last 20 minutes of trade.
02:35Well, the Nifty is still hovering at Rs.25,764.
02:38Most of the sectors are still hovering higher.
02:40You are seeing some pick-up happen, even though the broad range of trade throughout the morning trade was pretty range-bound,
02:46with a lot of choppiness that has been witnessed.
02:49Now, apart from IT and from FMCT, rest, all of the sectors are still holding up and that's positive.
02:54We're also looking at a lot of NBFC's auto names that are pulling up in trade, Tata Consumer Products.
02:59We're also seeing some earnings reaction among the stocks that are hovering higher.
03:03Let me quickly take you to our guest now, Abhishek Basso Malik,
03:06the co-founder and fund manager of Srirama Managers.
03:08PMS is now joining in to share with us his views on the markets.
03:12Abhishek, warm welcome. Good afternoon to you.
03:14Tell me, how are you looking at this absolute range-bound, volatile trade over the last one week or so in the markets that we've seen?
03:21Every attempt for the bulls to go back towards 26,000 and beyond is challenged with selling pressure at higher levels.
03:28Why do you think the strength is lacking on the D-Street?
03:30So, good afternoon to you and all your viewers.
03:35I think it's, you know, good to see across the board stocks are doing well.
03:41Some part of it is probably because there is no bad news.
03:47Corporate results that are coming are, you know, probably at par or slightly ahead of expectations.
03:54Also, because I think the expectations were also very, you know, below par.
04:00And we've not seen any negative news coming in from the U.S. president or from the political side.
04:07So, that's, I think, one major positive.
04:10Okay. Abhishek, since you do say that a lot of earnings have actually not disappointed, have ideally come either in line or slightly better off than the expectations there.
04:21Any particular sectors where you're seeing a lot of upgrades happen post the earnings or, you know, you are seeing the onset of the earnings recovery take place from this quarter?
04:30What would be those pockets and some stocks be?
04:33So, I think if you look at, say, for example, the cement companies, the results have been quite good.
04:40Some of the chemical companies that have come out with, you know, strong results.
04:45Banking, especially the PSU Bank, again, pretty decent results.
04:51In fact, banking across the board, results have been reasonably good.
04:56So, across the board, I think most of the companies where results were expected to be autos, I forgot, autos, excellent results, and also very good monthly numbers.
05:08So, that's also something which is driving, you know, the sectors.
05:12But overall, I think, you know, things are picking up impact of GST cuts, income tax cuts, etc., are sort of probably going to play out over the next two to three months.
05:27And that's the expectation.
05:28I think the two important things right now is, one, the U.S. tariff, you know, announcement coming through.
05:37So, that's something that the market is going to look forward to.
05:41And, you know, and results season how individual sectors look like, you know, how they are able to negotiate these, you know, turbulent times.
05:54And probably lastly, if RBI decides to reduce rates, that's the three things that the market is going to look forward to.
06:03Fantastic. You did briefly touch upon the auto segment.
06:07In fact, these sales figures have been coming in and we are also getting to see the reactions of the auto companies on that as well.
06:12In fact, Maruti Suzuki, the largest car maker in India, has reported its highest ever monthly sales in October.
06:19Remember, this is also including some of the impact of the GST rationalization that has come in as well.
06:26Remember, Maruti has achieved a total sale of about 2.21 lakh units.
06:31In an exclusive conversation with Business Today's Chetan Bhutani, R.C. Bhargava, the chairman of Maruti Suzuki, did say that the real impact of GST rate cuts will actually be visible in Q3.
06:41And he also expects a small car sales under the 18% GST bracket to actually grow by over 10% over the next two quarters too.
06:49I think the numbers are reflective of what the market has been till the end of the last quarter.
07:16The change came place after the GST came in, but that was too late to influence these numbers for the second quarter of the year.
07:29I think the real impact of GST on numbers and growth and maybe margins is likely to happen from the third quarter onwards.
07:41So, I think it is the number as well to be expected.
07:47Nothing very extraordinary either way.
07:51The first year of this year saw about growth of about 1.2 or de-growing at the same time.
07:57What growth are you expecting now in the second half?
07:59Because the real numbers will now be reflecting in the second half of the year.
08:02As far as Maruti is concerned, I am expecting that in this six-month period, October to March,
08:16this 18% segment should grow by around 10% a year, a month, I mean overall.
08:24The 40% segment will not have much change from what it was doing, because there has been some slight improvement there also.
08:38It's not that it has not improved, but not to that extent.
08:41Overall, I think the car market in this next six months, instead of growing by the 2% to 3% which had been forecast, should get to 6% to 7%.
08:57All right, from the auto space, let's actually look at the Tata group as a whole.
09:04Remember, the stage is set for a legal battle of Tata trusts with Mellie Misri, the ousted trustee, now filing a caveat in the matter.
09:12The 65-year-old confidant of the late Ratan Tata has actually filed the caveat before Mumbai Charity Commissioner,
09:19after his reappointment as a trustee of the Tata Trust was rejected last week.
09:23This caveat now seeks to ensure that he is heard before any further change is made on the board of the Tata Trust.
09:30Misri, who was also inducted onto the trust back in October 2022, is also the executor of Ratan Tata's will.
09:38Under the Maharashtra Public Trusts Act, the trust must report any change in the board to the Charity Commissioner within 90 days.
09:47A caveat now ensures that no change is finalised without giving the petitioner a chance to be heard.
09:52For more on this, we are now joined by my colleague Krishna Gopalan, Executive Editor of Business Today as well.
09:57Krishna, there is a new development now, a caveat being placed.
10:02This seems to be even done before any sort of a change has been put in place.
10:07So, this is pre-emptive in that matter. How are you looking at this?
10:12Yes, Gaurav, it's actually not entirely surprising because I'm just going to bring up a particular point that came up right after Mr. Tata's passing last year.
10:19So, there's a resolution that was passed by the trustees saying that all appointments will be for life.
10:25But there's a bit of a condition attached to it saying that it had to be in the base of unanimity, which means everybody has to be in favour of a reappointment.
10:32In the case of Meli Mistry, once it came up, it is a 3-3, meaning you have three trustees in favour of it, three against it.
10:37So, it got him in a very tricky situation. So, we have to look at two factors here.
10:41One, to understand the sanctity of the unanimity clause that was passed last year and therefore the option to left to Meli Mistry at this point.
10:48So, even if it was a 4-3 or it was a 4-2, Meli would have still lost.
10:51The point is, what is meant to be taken for granted in terms of being a lifetime trustee has suddenly gone under the scanner.
10:58To repeat myself, not entirely surprising that he's decided to take the legal route.
11:01He believes he's been wronged. And there's obviously a level of scepticism as far as the relationship between the trustees is concerned.
11:08Something that all of us feared. We knew there's a bit of friction between the trustees.
11:11I think all that is coming out of the open now.
11:14Okay, absolutely. Krishna, is there any way that we can now feel that over the next 90 days,
11:19the time period that is given for any change to be, you know, of course given to the commissioner as well,
11:26because of this legal hearing, the matter will get elongated and there could be also a chance.
11:31That this reinstatement could also take place for Meli Mistry or he's done ousted for all?
11:38No, I don't think he's ousted for all. Because if you go back and if there's a sanctity in the October 2024 resolution,
11:44the issue becomes very complicated. And I think he's obviously fighting for that.
11:47And there was a particular case where a trustee was appointed for life exactly a week before that.
11:52So, Mistry believes that he's been wronged and he's obviously gone to the charity commissioner with a case that he believes is kosher.
11:58But that said, given that it's straightforward, because to the trustees, it appears to be an open and shut case, not to Meli Mistry.
12:04So, I think that disparity is what is creating a bit of a problem here.
12:08Absolutely. Thanks a lot, Krishna, for all that.
12:10Of course, we'll keep coming back to you for any sort of development that takes place into this, you know,
12:16legal trouble for Tata Trust that we are truly seeing at this point in time.
12:19Let me go across to Abhishek Basumalik yet again to seek his view on the entire development as well.
12:26Abhishek, how are you looking at when one of the largest conglomerates listed on the stock exchanges undergo a legal hassle,
12:34you know, you know, drift, internal drift that actually spills out into the open?
12:39Would that also impact any of the stock market performance of the Tata group?
12:43About 30 companies are listed from the group.
12:45Investors are heavily invested into such large group because it has proven to be a wealth creator.
12:51It has proven to be a trustworthy space to be in for large part of Indian investors.
12:56How are you looking at this development for them?
12:59I don't think it really makes any difference to the operating companies because each company has their own boards.
13:07They are, you know, they have their own management teams functioning independently.
13:11The challenge or the problem here is at the Tata Sons level and the Tata Trust level,
13:17which is like one level above the operating company.
13:21So, and, you know, it's not that tomorrow there is going to be a change in ownership.
13:27So, it's just basically two groups fighting.
13:30It's good to see from outside, you know, purely trying to understand the dynamics of such a, you know, large group and how things play out.
13:40But from an operating business perspective, I don't think it, you know, has any relevance.
13:47Absolutely.
13:47So, that's the tough, you know, space that we have to continue to watch over as to what happens.
13:53But the good part is the operations will not be impacted with it.
13:56And that's some respite that all the investors of the Tata group should be holding at this point in time.
14:01Now, when it comes to the investment opportunities, enough and more opportunities are also emerging in the primary market space for investors as well.
14:09Yet another IPO is actually ripe for taking for investors.
14:13You're talking about fintech major, Pine Labs, that's raising around 4,000 crore rupees with IPO opening this Friday.
14:19Business Today Television's Aasthar Chopra also spoke to Amrish Rao, the chairman of the company,
14:23who confirmed his focus on staying purely a technology-first fintech company,
14:27steering clear of lending in BFC licensing.
14:30Let's listen into that.
14:32We've actually mentioned out there that we will want to continue to invest into the business
14:37and grow our business both in India as well as globally.
14:41And that's where some of these procedures will be put to use.
14:44Put to use.
14:45So, you're targeting the big valuation around several billions of rupees.
14:50What are the specific growth and profitability metrics just to justify the business?
14:56See, we've actually been growing as a company at almost 60% at the GTV level.
15:01In terms of the number of transactions, we've been growing at almost at about 50% on a year-on-year basis.
15:06And purely in terms of the number of merchants which have been coming on our platform,
15:10we've been growing at about 30% on a year-on-year basis.
15:14We've also worked extremely hard to increase our EBITDA profile, adjusted EBITDA.
15:20In the latest quarter that we went out, we were almost at a 20% adjusted EBITDA level.
15:26So, a company which has been operating at about a 20% revenue growth, a 20% of adjusted EBITDA,
15:32we feel this is the valuation which is appropriate and that's what we've gone out with.
15:38So, are you willing to expand your business outside of India or are there any pipeline countries you want to target?
15:45Or in India also, you're creating a larger portfolio?
15:49See, our focus has been on the side where we can increase our presence with the number of retailers
15:57and the number of banks and financial institutions that we partner with.
16:02Now, for doing that, both the retailers as well as the banks and financial institutions
16:07have their own unique requirements which goes and fits into their own operating model.
16:13One of the examples that I like to give is, we actually work with road traffic institutions
16:20where in many states, the police for road traffic actually uses our platforms and uses our technology services.
16:28But that's just one example wherein we've embedded ourselves into an existing business problem
16:34that that client or that customer was facing.
16:37So, you've taken an approach which says, what is the business requirements?
16:40Where does payments fit into those business requirements?
16:43Build capabilities for that and then effectively we are able to grow our business along with that client.
16:50In the space of IPOs, Lenskart IPO has already got two-time subscription on day two already.
16:56In fact, the debate around Lenskart's valuation rages on on social media.
17:01And earlier I actually spoke to Siddharth Pai of 314 Capital and Dananjais in our systematics group
17:06to really try and understand that while there is a lot of debate and discussion around
17:12whether the fair valuation exists for Lenskart for newer investors to participate
17:18and unlock some valuation for themselves as well.
17:21At 70,000 crore rupees, is Lenskart truly valuable or not?
17:26In fact, this is what they had to say.
17:29Let's listen in.
17:29I think the best way to compare them is actually like-to-like peers.
17:34I think comparing new-age companies to new-age companies is a bit of an apples and orange comparison.
17:39Yes, they're all fruits for that matter, but it depends on what your appetite is
17:42and where you believe these kind of gains can end up happening.
17:45Like I said, if you look at the, just taking the first question you raised as of now
17:48with regard to the size of the company versus the overall Indian eye care market,
17:52I think that's a fantastic way of people actually massaging these narratives
17:55for their own engine means.
17:58It's a fairly unorganized place as there as now the chunk of the revenue comes.
18:02But close to 40% of the revenue actually comes from overseas.
18:04I think a large number of investors coming in are looking at that overseas revenue growth
18:07and saying because this person has spent a large amount of time getting vertically integrated
18:12and thereby helping to actually reduce costs.
18:14And the EBITDA margin improvement from about 6.8% to 14, 15%, hopefully going to 20%,
18:19does actually give them a lot of cause to end up actually believing
18:22that this company is now actually on a profitable path.
18:25So long as it continues the growth, they will end up actually giving that valuation.
18:28But I would say that given the context of the quality of earnings
18:32that is being reported at this juncture,
18:34I think those assumptions need to be taken more seriously.
18:38And I don't think we can have a blind faith in the assumptions
18:42that people are making at this juncture.
18:44The companies in company will need to deliver and deliver profits
18:48and these margins, etc. that people are assuming.
18:51So I would say that, you know, I would reiterate that there is no dearth of value stocks,
18:59value opportunities even in the consumption space.
19:02There are other companies in this space which are growing very rapidly
19:06and using the same theme, I would say, and have much wider set of operating matrix.
19:15So I think there is no great hurry at this juncture.
19:18There are other opportunities that are available.
19:20So I would say investors might want to weigh multiple options.
19:24Right, let's go across to Abhishek Basso Malik to really make sense
19:30of all the IPOs that are actually coming in
19:31and what sort of an opportunity should you be really scouting
19:34in case you are looking at this space very clearly.
19:37Abhishek, I do know that you look at IPO space very, very selectively.
19:42There are just one or two of IPOs that you have vocally talked about
19:44on the channel before as well.
19:46But look at the kind of rush that there is.
19:48And of course, from the new age companies, Lenskart,
19:51despite all that noise, despite all everybody questioning
19:54the surge in valuations in just about three months' time,
19:58how Apewush Mansal himself bought it at a much lower level,
20:02at much lower valuation just about three, four months ago,
20:04and how suddenly.
20:06So all those questions kept on coming.
20:07But despite that, fully subscribed on day one,
20:10two-time subscription on day two already is what we have.
20:13Similarly, now we have Pine Labs.
20:15You already heard the management there.
20:16We have Grow that is opening tomorrow.
20:18Already the anchor book is a subscriber over 16 times.
20:22That's the kind of appetite that we are seeing for the IPO space.
20:25How are you advising investors to really put their heads around
20:28and finalize where do they need to put in their money?
20:32So I think the easiest thing to do is to look at companies
20:36where you think there is a good business model,
20:39where the business itself is profitable,
20:42especially if it is coming to market after being in business for a number of years.
20:50And, you know, so that should be the first thing.
20:53I mean, as I always say, valuation is in the eye of the beholder, right?
20:59It's, you know, people can quarrel about it.
21:02People can discuss it.
21:03But end of the day, it is individual choice.
21:07People can, you know, people may be willing to pay up for growth.
21:13People may be willing to pay up for market share and so on and so forth.
21:18Personally, for me, for most of the IPOs that are, you know, upcoming,
21:22I would again want to sit out.
21:24There's not a single case where, you know, it's a very, very compelling buy,
21:31you know, Pine Labs, good company, but, you know, still to be really profitable.
21:37I mean, if you've been in the business for five years, 10 years,
21:41and if you're not able to become profitable,
21:44then let me, you know, sort of wait and see how the numbers, you know, come up.
21:49And then we can always take a call.
21:52It's not that, you know, the opportunity of investment stops with the IPO.
21:57It actually starts with the IPO.
21:59You can always take a position six months, 10 months, a year later.
22:04And if you look at history, you know, all the, you know, the new age IPOs,
22:11after listing, it went down significantly.
22:14But it did give an opportunity for people to buy in at lower levels
22:19and then make good money.
22:20So, opportunity is always going to be there.
22:23Absolutely.
22:23Let's look at the market closing.
22:25Then it's 3.30 viewers.
22:26And we've ended about 53 points higher in trade as far as the Nifty is concerned.
22:3025,775 on your screens right there.
22:34So, we managed to pull up from the low point.
22:36And just ending near the high point of the deal,
22:38let's pull up even the Nifty Bank for all of you to see.
22:40It's the PSU banks that have actually driven that last half an hour of move there as well.
22:45About 0.6% of a higher close for this one.
22:48And look at the PSU banks, that's the star for the banking space as well.
22:52Almost 2% higher in trade right now.
22:55All the other sectors also that pulled up, real estate pulled up.
22:58It's the top mover in terms of the sectoral action today.
23:01Pharma stocks also did quite well.
23:03Oil and gas also pulled up in trade.
23:05Those were the sectors that really did very well.
23:07Look at the real estate, 2.2% high in trade.
23:10But IT and FMCG from the defensive pack, a little behind in trade as far as the stock markets are concerned.
23:17But let's look at the stock market performance in terms of the Nifty gainers and losers as well.
23:22Of course, you had Sriram Finance, of course, record high levels, 6.3% higher today.
23:27Tata Consumer Products about 3% up.
23:30Apollo Hospitals also driving about 1.8% higher in trade.
23:33These were the top three movers, M&M, Zomato and even SPI moved up about 1.5% each in the trade today.
23:41But when we look at the laggards, Maruti Suzuki, despite posting in that record high number on the auto sales figure in October,
23:483.3% of a drag coming in on that one.
23:51ITC, TCS also slipping back in trade as well.
23:54So these were the top laggards in trade.
23:56But let's, in fact, go back to understanding from Abhishek as to some of the queries that are coming in from all of you viewers.
24:03And we have picked out a few questions for him as well.
24:06Let's quickly look at the first query that we have.
24:09This one is from Purva Ghosh from Kolkata.
24:11Wants to know about, again, the IPO space that we were just asking.
24:14Pine Labs versus Grow versus Studs versus Lenscart.
24:18Which of the IPO is best to invest in?
24:20Putting you in a spot, Abhishek, and sorry for that.
24:22Help me understand any one of these that you truly want our viewer from Kolkata to focus on right now.
24:29What would you say?
24:30I mean, out of all these, probably Grow and Stud might be slightly better in terms of, you know,
24:39if I have to look at them because they are in a niche space, they're making money.
24:43I mean, I would, if I have to choose between these, I would probably go for Studs and Grow.
24:54Okay, got that. Grow and Studs.
24:56Shivam from Mumbai says,
24:57Will the PSU banking rally sustain and can you suggest any top two or three stocks to invest in from the PSU banking space?
25:05Any top choice there?
25:07Abhishek, do you see, you know, flavor returning to PSU banks yet again?
25:11I think the overall banking space, whether it's PSU or private banks, MFIs, NBFCs, I think the entire space is, you know, looking good.
25:23PSU banks especially look good because the valuations are more reasonable.
25:27But the entire banking space looks, you know, much more, you know, looks pretty interesting.
25:33You know, stock peaks, I think you can look at any one of the, you know, frontline number, you know, stocks and most of them should do well.
25:44Okay, got that.
25:45Frontline would mean the larger ones among all the ones that are listed in the PSU space.
25:50It would mean SPI, Bank of Baroda, Canra Bank.
25:52You could be looking at any of these banks as well in space.
25:56Let me also look at the next question that's coming in.
25:58This is from Sarthak Sina from Delhi and he asks you, Abhishek, which are the best opportunities in real estate, infrastructure, cement or paints?
26:07So the real estate sector and the allied sector, anything within this infra space that you particularly are bullish on?
26:14You began the show by saying that you are bullish on cement.
26:17Would you be able to take any picks there or would you also extend cement to any other segment?
26:22I think cement is a sector which has not done well for many years and it's, you know, it's coming out of that cycle and starting to pick up.
26:34So cement is actually a medium to long-term play.
26:38Real estate continues to, you know, it's going to be slightly, you know, sort of patchy quarter to quarter because the numbers are not going to be linear.
26:49But overall, I think the real estate, the mid-income to the luxury real estate, that space, not the low-income housing, but the middle-income and the high-income housing stocks also could do actually quite well.
27:06Okay, all right, Abhishek, out of time now.
27:10Thank you so much for being with us on the show and giving us all those insights.
27:13Always appreciate your presence there.
27:15Viewers, in case you also have any questions, you can send them to us on the number that's flashing on your screens as well.
27:20And with that, it's a wrap on the Business Today show.
27:23Many thanks for joining in, but do join me back tomorrow morning, market opening action at 9 a.m.
27:30Of course, I'll be seeing you on India Today.
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