Stocks To Watch: Markets On Course To Scale Record Highs
Transcript
00:00 Hello and welcome to BQ Prima. Very good afternoon to all the viewers. I am Meera Dutta. We have
00:04 Nifty, which has finally hit the 20,000 mark in trade today. An interesting day because
00:10 it was a wait and watch for all of us. And the anticipation was that probably we might
00:15 not hit it. But clearly, at the close, just probably 20 minutes away from close, we've
00:20 had those 20,000 levels. Let's just quickly look at the stocks which are taking us higher.
00:25 Right now, in terms of the top gainers, you have names like Adani Ports, Adani Enterprises,
00:29 Apollo Hospitals, Power Grid, as well as Hindalco, whereas on the losing end, you have names
00:33 like Coal India, ONGC, Bajaj Finance, as well as L&T. In fact, if you see the breadth as
00:38 well, 46 advances and only 4 declines on Nifty 50. Agam, this is an interesting move that
00:45 we are seeing. This morning also when we were talking about 20,000, the FNO data was indicating
00:50 that kind of open interest addition as well. Where is it taking you now? Yeah, so it was
00:56 very evident for everyone to see out there because we have started seeing the Nifty establish
01:01 a clear bullish trend. We did see it move consistently and stay above its 20 EMA. We
01:09 also saw it move and stay significantly above its 7-day VWAP, essentially just about 200
01:16 points away from the 20,000 point. And now we have seen the Nifty breach that. Along
01:23 with that, until Friday, we actually saw a little bit of unwinding as far as the open
01:28 interest in the September futures is concerned. But today, we actually saw a good 2.5% increase
01:33 in open interest towards fresh longs. And along with that, we have also seen a significant
01:38 expansion in premiums as well, which means that there is a lot of longer buildup happening
01:45 in the FNO market too, and the options market specifically. So there are a lot of cues out
01:50 there. If you consider the writing in terms of calls and you compare that to the writing
01:57 in puts, you will notice that there is a lot more coming through on the put side, both
02:02 on the Nifty as well as the Bank Nifty side. So this is another indication of our likelihood
02:07 of the indices moving and making those new highs coming through for the Nifty. So, well,
02:14 all in all, something that we weren't really expecting, at least at the beginning of the
02:18 day, but well, it's turning out to be quite a strong session today. And of course, the
02:22 Nifty making history with 20,000 today. Absolutely. 20,000 too is the high that Nifty 50 has hit
02:30 as well as we speak. In fact, if you see in terms of the daily move as well, almost 155
02:36 to 160 points move that we've seen on Nifty 50. A similar move was last seen on the 1st
02:42 of September, between the 1st of September to now. The breadth in terms of the markets
02:47 has been absolutely narrow. A 40 to 60-point range is what we've constantly seen as well
02:53 so far. Overall, if you see, let's just quickly pick up the stocks which have been making
02:59 news so far. Adani Ports, Adani Enterprises, Power Grid, Apollo Hospital, Axis Bank. These
03:05 are a few of the names and it's interesting to see how Bank Nifty is one of the key participants
03:10 as well so far. A little over 400 points rally coming in, in terms of Bank Nifty and the
03:15 breadth in terms of Bank Nifty is also absolutely in favour of the bulls. Broader markets also
03:20 coming in to the support today, from railway to shipping to the PSU companies, all of these
03:26 segments have been up and about. In fact, totally as well, except media, all the other
03:32 sectors have been in the positive terrain as we speak. Let's quickly look at the Sensex
03:37 as well because at that level, you have Sensex which is above 67,000 for the first time.
03:42 In fact, 67,100 is what we are staring at. And if you see from a point contribution perspective,
03:48 its names like Reliance Industries as well as HDFC Bank and TCS, these are the top contributors
03:54 in terms of Nifty 50 as well. Overall, in terms of market cap addition as well, it's
04:00 interesting to see how Adani group of companies, the market cap is almost at a 7-month high
04:06 as we speak. And with all of this, in terms of the kind of addition that we are seeing
04:11 on a single day is little over 40,000 odd crores. So, good contribution coming in from
04:16 those names as well. Moving on, if you see in terms of the PSU Bank
04:20 Index, that is one of the key outperformers in today's session. Metals as well as auto
04:26 sectors are gaining as well. In fact, Neeraj is also joining us now to give us more in
04:30 terms of what is his read, how sustainable is this 20,000 going to be, Neeraj?
04:36 This is great stuff, right, Hiral? We notched that mark very close and then we retreated
04:41 all the way to 19,300. So, it was a matter of time before this happens. And it's great
04:45 that it's happening just a day after the G20 summit, which has been successful as well.
04:50 Now, the beauty about this, as I see it, that some of the heavyweight sectors, financials,
04:56 for example, currently still maybe half a standard deviation below the MSCI benchmarks,
05:01 right, as per the Macquarie note that came out as well. We don't have IT, which is terribly
05:05 expensive. You don't have autos. You don't have consumer, which is terribly expensive.
05:09 We don't have reliance, which has technically moved dramatically in a meaningful way in
05:13 the last few months. So, there are a bunch of pockets out there which are actually trading
05:17 at very decent valuations relative to what they have, and they haven't really made a
05:23 move. So, if we think that we nudged a benchmark and then we'll completely pull back, well,
05:27 there is an argument to be made that with the lack of rally in the large caps in the
05:33 last two to three months, that may not be the case this time around. Could it be that
05:38 we may actually move higher? Remember, BoFa and a clutch of other brokerages have put
05:42 out their notes already saying that they expect the rally to go all the way to 20,500. Now,
05:48 are we expensive? You could argue that yes, we are. Relative to a bunch of other markets,
05:51 we are expensive. We may consolidate here, which is fine, but today is not the day for
05:56 trying to figure out, OK, what happens here on, and are we terribly expensive otherwise?
06:00 We got to realize the fact that yes, it's a number, but it's a very important number.
06:05 We've notched that at a point of time when not a lot of other markets are actually doing
06:08 that great, and that should be celebrated. Absolutely. And with this, in fact, last week,
06:12 I was having a conversation with Rahul Sharma as well of JM Financial, where he's absolutely
06:17 sticking his neck out and saying 2400 is an absolute possibility in the month of September.
06:23 And his reasoning perspective is also because the FBIs, if you talk about the foreign institutional
06:28 investors who were holding more of short contracts, have actually switched positions to long
06:34 contracts, right? So the positivity from the FBIs is also coming in, along with the confidence
06:40 that the retail participants are showing. So the month of September probably will take
06:45 us to 2400. From there on, how much profit booking? I mean, no one's talking about it,
06:52 but again, 19250 is where he is looking at in terms of support as well, in case there
06:58 is a downtick that comes in. And a couple of interesting names that he mentioned over
07:02 there was, as you were saying, in terms of IT, TCS and Infosys, he was of the opinion
07:08 that these two are the counters that will come in and support Nifty to the rally of
07:11 2400. A gale of ONTC from the PSU banks could probably run up almost 20 to 25% as well in
07:19 the month of September. So it's the names that are coming in from analysts as well,
07:23 which have been absolutely interesting to see this 20000. And in fact, I think we've
07:28 just got a number saying that it's taken almost 50 sessions or 52 sessions to actually hit
07:34 a fresh all time high. Yeah, so we've seen the laggards now start to participate, not
07:39 that the ones which have done well, have done. So today, for example, even in today's session,
07:46 railway stocks are all doing OK. But you saw the whole of last week punctured by gains
07:50 to a Coal India, a Larsen and Toubro, just showing that there's a bit of a meaningful
07:55 move happening in a clutch of sectors that had not participated thus far. So that is
07:59 one good thing that the rally is not being led only by a narrow set of stocks like the
08:04 Nasdaq. That's part one. We have to be cognizant of the fact that while this number has been
08:09 achieved, the reasons for a pullback are plenty, aside of the valuations, the fact that the
08:15 dollar index is doing very strongly against a clutch of other baskets as does the nature
08:19 of the dollar index, plus the fact that crude oil is at 90 dollars a barrel or thereabouts.
08:23 It's sustained above 90 dollars a barrel. So it's trading circa 90 as well. That's not
08:28 pleasant news. But one would reckon that just a number of avenues available for global money
08:37 to put large chunks of money to work is very limited. It's very rare that you hear a Chris
08:43 Wood go out on an Asia conference and say that despite the rally, India remains the
08:50 best place to be in Asia. There's a large global strategic advisors or large global
08:55 strategic managers who are all talking about how India needs to be a part of the portfolio.
09:00 And when you're in such a scenario, if other things don't get spoiled too much, dips have
09:07 to be bought into. I would reckon that is probably one thing that every fund manager
09:12 or every money manager unanimously will tell you or me that we don't know what the markets
09:18 will do. Who knows? Frankly, it's a month's game to try and predict whether it becomes
09:21 21,000 or thereabouts in a particular time. I mean, there are technical experts who can
09:24 do that. But fundamentally, the quantum of gains or losses is one thing. But does this
09:31 market remain one which has to be bought on dips because the slightly medium term to long
09:35 term looks strong? The answer should be and will be an unequivocal lesser. I'm sure we'll
09:42 get a bunch of experts now because we've hit this magic number. Come and probably talk
09:46 about the same thing. But I think that largely should be the construct. Absolutely. And the
09:50 kind of contribution and the gainers that we're seeing, you know, since the last time
09:54 in the month of June that we hit that magical record high number, it's names like BHEL,
10:00 NTPC, a lot of power names that have been top gainers as well since then. But apart
10:05 from that, this thousand points rally from 19,000 to 20,000, as we mentioned, a 52 session
10:11 move, what has taken to actually get these thousand point rally in terms of biggest contributors
10:17 to this up move in today's session. Apart from a reliance industries, it's interesting
10:22 to see how the banking names have contributed as well. So apart from an HDFC bank, you have
10:26 ICICI as well as Axis Bank, which are the top contributors in today's session. But you
10:31 have names like BHEL, REC, Z Entertainment, Birla Soft, Polycap. These are names which
10:37 have actually moved, you know, from the 28th of June to now. This is last when we actually
10:43 hit that mark. So good moves coming in a lot of varied sectors. Overall, apart from that,
10:49 just four drags in today's session, Coal India, L&T, Bajaj Finance, as well as and ONGC. So
10:55 the breath is also absolutely in favor of the bulls as we speak. In fact, we will try
11:00 getting a couple of guests as well in terms of, you know, what's happening from here on,
11:06 how sustainable it is going to be as well. In fact, we have Kush Bhora, founder at kushbhora.com,
11:14 to give us a quick heads up in terms of what is the technical and the FNO data indicating
11:20 in terms of overall levels to watch out for. Kush, good afternoon and welcome to the show.
11:28 We've hit that magical number of 20,000. Sustaining above that, it's going to be interesting if
11:33 we get a close about 20,000 levels. But what is the derivative and the technical data indicating
11:40 in terms of levels to you? First off, thank you for having me here and congratulations
11:46 on the 20,000 mark. I mean, it's been a journey that you know, it's taken some time, we came
11:51 tantalizingly close to it the last time around, you know, we were at 1,900. But from here
11:55 on, I would suggest a cautiously optimistic view. And see, the reason is very simple,
12:01 I'm assuming and which it will be, you know, today's closing will be the seventh positive
12:04 closing on the trot. I'm saying if for nothing else, then at least just this alone warrants,
12:09 you know, a near term caution on the markets. The mid cap and the small cap spaces are already
12:13 a little overheated, but they still continue to do well. And that's why the optimism but
12:18 the caution because of the fact that you know, we haven't seen a round of profit booking
12:20 in the last seven days on the you know, on the indices itself on the Nifty itself. So
12:24 hence concern. But I was listening to your conversation also, you know, just a while
12:28 ago. And yes, this market is a buy on dips market. Despite the kind of selling that we've
12:34 seen from the FII is over the last month, or in fact, even two months, the markets actually
12:38 just gained from strength to strength, at least in the last seven, eight days, right.
12:42 So this is suggesting that there is an appetite for Indian markets once the FII buying sort
12:46 of resumes. You know, your guess is as good as mine where the index is headed from here.
12:50 Thanks for getting us the details in terms of what levels you're watching out for. We'll
12:55 come back to you shortly for any further questions. But clearly, Neeraj, from what we're picking
13:01 up so far as well, it seems that we probably would sustain above the 20,000 levels on closing
13:08 basis as well. And that's going to be an interesting one to watch out for.
13:11 Yeah, I mean, yes, for a near term trader, clearly, that would be a good level. Does
13:17 it kind of indicate that some option positions, you know, get here and there. But frankly,
13:23 like I'm saying, it's a moment to celebrate, independent of whether the next 100 points
13:31 happen in a matter of one day or two days. Yes, very important for the day trader. But
13:36 it's important to realize the trend of what's currently happening. OK, and I think to put
13:42 that into perspective, a very special guest, Siddharth Bhaiya of Equitas Johnson right now.
13:47 Siddharth, you're beaming and with reason. Congratulations to all of us. You must be
13:52 a happy man. Good afternoon, Neeraj. Yeah, I think great
13:55 time for all of us. We happen to be living in the best country, in the right country
14:00 at the right time, isn't it? Yeah, you can.
14:02 The world is going through a very difficult time right now, but a completely different
14:06 story as far as India is concerned. Yeah, clearly so. Siddharth, how do you explain
14:10 this dichotomy and what does this mean? I know it's just a number, but in some sense,
14:15 it's an important psychological number. We've been talking about these numbers for a while.
14:19 We've hit that at a point of time when you said not all the other world markets are doing
14:23 as well. Right. So, Neeraj, look at March 2020. Who
14:28 would have thought that we would have reached this milestone just three, three and a half
14:33 years back, right? At that point in time, it looked so difficult. We didn't know what
14:39 was what was in store for us. So I think you're great time. Yeah, most of the great time for
14:46 us. Right. And hopefully, the economy is on a very sound footing. And we should continue
14:53 to do well going forward. Okay. Now, you know, so, okay, here's the point,
14:59 right? The other thing to keep in mind, and we'll continue a conversation with Siddharth
15:02 in just a minute. But I think the point that he made, and I've seen some of his tweets
15:06 in the recent past, right? Their performance has been rock solid. And he's talking about
15:11 how if you get a chance to invest in small caps and mid caps, and if you have the strategy
15:16 to do that, yes, you will see drawdowns. But if the eventual performance or one year, three
15:21 or five years, seven years, turns out to be the numbers that for example, they've clocked
15:26 in or some others have clocked in, I think it's worth it. So nifty at 20,000 no way signifies
15:31 what's happening at the broader spectrum. But here's a deal with the benchmark at that
15:35 level. And the mid caps and the small caps having valid so strong for the last few. And
15:40 the fact that as Siddharth highlighted, it's not that too many countries are doing this.
15:45 This is a really important thing. I'm sure you have questions for Siddharth as well.
15:48 And overall as well, if you see in terms of the small cap index on the Amphi data that
15:51 came in today as well, our lead was that probably we'll start seeing some bit of an outflow
15:55 in the month of August. But it's very different because we've seen the same four and a half
15:59 thousand crores of inflow in the small cap. Large caps have continued to see an outflow.
16:04 And if you see YTD, a 40,000 crore inflow in terms of small caps, and that's a big deal
16:10 for an Indian market where we are already talking about are we expensive or not, right?
16:14 Definitely. Actually, so before you ask your question to Siddharth, let me ask him this.
16:18 Siddharth, in some sense, is it heartening that because of the SIP flows, because of
16:24 the PMS flows that managers like you are receiving in droves, such a large portion of the Indian
16:30 market now owned by Indians, and they bought at every level, right, because of the SIPs
16:34 or because of the PMS flows as a result of which the average Joe is actually sitting
16:38 on hefty profits.
16:40 So, Neeraj, let's go back to March 2020. The market was extremely polarized with only,
16:46 you know, the so called FANG or RITX stocks doing well. And the theory that time was that
16:51 only you have to invest only in those stocks to make money. And since then, everything
16:55 other than those stocks have made money. So the point is, right, probably is this the
17:01 right time to get into small and mid caps? I have no idea. Right? We've been doing it
17:05 for the last 10 years, 10 and a half years. I've been doing this for the last 20 years.
17:10 And all I can say is, if you have a long term perspective, this is a good asset class to
17:15 be in. Is this the right time to jump in lock and barrel? I don't think so. Right? So, yes,
17:21 money is coming in, we're all rejoicing. But every time I've seen people rejoice on television
17:25 at certain levels, you know, things have been difficult going forward. So I don't want to,
17:31 you know, burst the balloon as yet. But I say, let's be cautious. Let's be cautious.
17:36 Right, so Siddharth, after being cautious as well, do you think still there is room
17:41 for someone to come in with further infusion? Or do you think you should just wait and watch
17:45 for the bubble to burst?
17:47 So there's one side of the market, which is absolutely scary, right? Today, an SME IPO
17:52 got oversubscribed 1000 times, right? But on the other hand, we also have fundamentally
17:58 the India story is extremely attractive, right? The kind of news flow that we are seeing looks
18:04 like even if the government capex or the private capex, even if 20% of that, what is actually
18:10 been announced gets implemented, it will have a significant multiplier effect as far as
18:14 the GDP is concerned. So long term, yes, I'm bullish. Short term, I have no idea. You know,
18:21 my concern is the SME market, the SME IPO market, and that general level of fraud. Six
18:27 months, the small cap index is up 40%. Right. So at this point in time, caution is warranted
18:32 for sure. But I am happy. I take it. And I don't want the viewers to feel I'm only a
18:39 cautious person.
18:40 Yeah, I agree. But no, I was telling you that I take exception to the word bubble to burst.
18:44 I believe not necessarily in a bubble territory per se, except for select pockets. And that's
18:50 my next question, Siddharth, to you. That even if hypothetically a section of the market
18:55 is looking overvalued, having run so much, etc. within that pocket or otherwise, there
19:00 would be pockets which are fairly valued. I mean, your portfolios, I know your funnel
19:05 is that you don't select a company unless it is below a particular threshold. And I'm
19:09 sure your portfolio is full. So there are enough pockets of growth out there available
19:13 at reasonable valuations.
19:14 Yes, there are always opportunities in the market, right? The commodity spaces again
19:19 started looking up. We're seeing internationally prices of commodities, crude going up. So
19:26 at any point in time, there are opportunities in the market. It's just that the number of
19:29 opportunities that are there right now are far lesser than what they were, say, a couple
19:33 of years back. Three years back, the market was a sitting duck. You could have just thrown
19:38 darts and picked stocks. But unfortunately, at that point in time, people didn't want
19:42 to buy any of these companies. So and yeah, so while opportunities still exist today,
19:49 right, they aren't as many as what they were two years back.
19:51 Right. So, Siddharth, where are you seeing the opportunities now from here on? Because
19:57 if you see in terms of broader markets as well, that sector rotation has already happened,
20:01 right? We're in that last leg, it seems. So what are the opportunities where you would
20:06 advise stock picking?
20:08 So to be honest with you, look, market works in work in cycles, right? And as far as we
20:15 know, I've discussed this with Neeraj before in the past, that 2010 to 2020 was all about
20:20 consumerism and 2020 onwards, we are all seeing government infrastructure, government spending
20:25 drive the growth. And this is going to have a multiplier effect as far as this. So I think
20:30 the CAPEX cycle, the government infrastructure spending cycle has only just begun. Until
20:35 and unless we don't have serious accidents as far as the macro picture is concerned,
20:41 you would see government spending to be very robust, that will in turn drive economic growth
20:45 and GDP growth. So I think we have some legs to go as far as that sector and that cycle
20:51 is concerned.
20:52 Siddharth, we won't take too much of your time. I'm sure your team is raring to celebrate
20:56 with you because your performance has been strong all through this while. Thank you so
21:00 much for taking the time out and celebrating 20,000 with us.
21:03 Thank you. Thanks, Neeraj. Thanks a lot. Good to be on the show. Bye bye.
21:07 Thank you. The pleasure was ours. Thanks so much for that. So, well, that's one important
21:12 voice doing this. Now, it's important to get in somebody who actually does both ends of
21:16 the market, right? Andrew Holland, largest CAP3 AIF, goes long, goes short, can make
21:22 money every way. Want to understand from him how is he thinking about the markets at 20,000.
21:27 Let's get Andrew Holland on the show to try and understand what is his perspective about
21:31 what could happen ahead. Andrew, great having you. Thank you so much for joining us. Elated,
21:36 worried, or taking it as it comes? I think the latter, actually. Take it as it
21:44 comes because it's, you know, the momentum's there, Neeraj. You can't fight it. So, go
21:49 along with it until, you know, something changes that momentum, whatever reason it might be.
21:53 But at the day to day, it's not as though I want to kind of throw cold water on a market
21:58 that's hit 20,000. I'm sure, you know, the retail investors who have been, you know,
22:03 over the years now increasing their exposure to the markets, you know, must be very happy.
22:07 And it's rewarding them as well for that, as we've been saying for years, you know,
22:13 keeping them for the long term, do your SIPs, it all works out for you. So, I don't want
22:17 to pour any cold water on today. But, you know, no doubt we'll get into overbought territory,
22:22 which we will with this momentum. And then some factor will come through, which worries
22:29 us and then the markets will have a healthy correction. And that's what it will be. So,
22:35 remain constructive on the markets. I know a lot of people are talking about bubbles
22:40 and this and that. And certain sectors, you know, obviously clearly kind of, you know,
22:46 taking years of earnings growth to justify some of the ratings that they have. And once
22:54 things, you know, kind of settle down, some of these ratings will obviously, or some of
22:58 the share prices will go back towards the mean valuations.
23:01 Right. Good afternoon, Andrew. So, I take your point that you would not really want
23:06 to, you know, actually pour cold water at this hour. However, do you see that sector
23:11 rotation, probably not even sector rotation? I mean, we've been in an overbought zone specifically
23:16 from the broader market perspective right now. Even the mutual fund data does indicate
23:21 that there are outflows happening from your large caps. So, if you see that profit booking
23:26 coming in, in your broader markets, do you think that rotation, the money will start
23:30 flowing into large caps and that will help us sustain in terms of markets?
23:34 Well, I think that's been happening a little bit in, you know, to push us towards that
23:40 20,000 really, hasn't it? It's, you know, I think there's been some concerns over mid
23:45 caps. So, as incremental monies come in, I think you've seen that go more towards the
23:50 large caps, you know, because you're seeing quite a number of sectors which, you know,
23:56 have been underperforming for no rhyme or reason, say the banking sector. There's a
24:02 number of factors behind that, but now you started to see some leadership there for the
24:06 first time in a while. So, that's what's, I think, helped the market. So, more of, not
24:12 saying sector rotation, but, you know, some of the sectors which have underperformed in
24:16 the large cap space are now starting to perform.
24:21 Yeah. Andrew, could that be the case that the market may not necessarily go down? I
24:26 mean, 15,000 crores coming in a month, two months on a trot, plus PMS, AIF, so on and
24:31 so forth, and global money, maybe the market consolidates and pockets which have underperformed
24:37 thus far kind of put up their hand?
24:42 Yeah, I mean, let's just take an example, right? If you take Nifty, let's say the banking
24:48 sector including, say, Reliance and a few other stocks, you know, start to perform,
24:54 then obviously, you know, you're going to see the index continue to kind of scale new
24:59 highs. But, you know, you do go into that overbought zone, and at some point, you know,
25:05 there will be a factor which brings us, which, you know, I'm not saying, you know, bricks
25:10 the bubble, but actually kind of takes some of that euphoria away, and we go back to a
25:15 more normal kind of thinking about the market multiples, and so forth. But I think, you
25:23 know, at the end of the day, you know, what factors could bring the kind of the market
25:30 to kind of fall are all probably global factors rather than local factors. I'm excluding,
25:35 you know, political events in India for the moment, because that's something for next
25:39 year. But, you know, be a global event rather than a local event, in my mind, although the
25:45 local event could be the lack of monsoons or amino, you know, pushing up inflation and
25:50 expectations that interest rates won't fall very quickly. That's the only factors I can
25:56 think of at the moment.
25:57 Andrew, a quick follow up. There is a lot of fear around the broader end of the spectrum
26:03 and having rallied too much. My question is, there are a bunch of sectors out there due
26:08 to government policies or otherwise, are actually seeing tremendous leg up of current earnings
26:14 as well as promise of future earnings. Could this time in some sense be really different
26:19 for specific pockets? I know it usually is the same, and this time is never different,
26:24 but for select pockets, although they've extended, could it be different?
26:30 So let's take one pocket, which I think you're alluding to, is let's take capital goods.
26:35 Sure. You know, you're seeing if you go back to that 2004 to 2008 period, what moved those
26:44 share prices? It was the orders being awarded to companies rather than it was the execution.
26:52 So I would say that as long as the order inflows continue, share prices will do well because
26:57 obviously, you know, analysts will say, well, you know, in 2025, this will have a better
27:03 impact on earnings. But execution is the key, and we're not going to see that for some number
27:07 of years. So my view would be that go on the order intake rather than it's going to be
27:13 different this time in terms of execution. Right. Andrew, how are you looking at the
27:18 FI side of it? What's the mood on that ground? Because I mean, do you see the inflows continuing
27:25 right now? And how do you see the rupee impacting the way FIs have been really looking at the
27:31 Indian markets? So there's kind of two schools of thought here. One is the foreign investors
27:39 who just love India and obviously don't like China. I mean, there's a very easy pocket
27:45 of conversation there. So whenever you speak to, you know, heads of research of brokering
27:50 houses, whenever they go overseas and meet foreign investors, you only want to talk about
27:55 India and what to buy. So China's kind of off the chart in terms of talking. Then there's
28:00 other investors going back to your depreciation of the rupee, particularly in the US, who
28:06 think that, you know, hold on, I can get, you know, six, six percent or around six percent
28:12 in terms of bond yields or credit in the US. And, you know, a lot of the time I'm not making
28:20 that kind of money when I take into account depreciation of the rupee. So, again, it's
28:25 a compelling story for some and it's still a work in progress for others. I think the
28:30 other factor as well is that obviously for foreign investors looking at India, they have
28:35 to bring China into the equation at some point, not just because of what's happening in China,
28:42 but the problems it could cause if they were to have a big stimulus in terms of commodity
28:47 prices or if they don't and the UN continues to depreciate, that will have an impact on
28:53 our currency as well. So those are the kind of factors they would look at. So unless they
28:58 think the rupee is going to be stable, which they don't, not because of India factors,
29:02 but global factors or China factors, then that could be another reason for some investors
29:07 not to love India as much as most seem to do at the moment.
29:11 Okay. My final question to Andrew Holland and viewers, Andrew has been kind enough to
29:15 say that he doesn't want to pour cold water, but throughout the interaction, he's maybe
29:19 rightly so put out factors of caution that people should keep in mind. Andrew, you run
29:25 a long shot fund, you have the option of going short as well on the market if you want to,
29:30 just trying to understand, are you tempted to do that while the train is moving in one
29:34 direction, but because there are pockets of overvaluation and excesses, if you will, are
29:40 you tempted to go short?
29:42 So there's certain sectors of thinking that you can look at in terms of where you'd probably
29:50 say expect underperformance if not just pure stock pricing falling. So let's say the oil
29:57 price, the oil price is over 90. If it was to shoot to 100, that would have a big impact
30:04 on a lot of companies, not just necessarily oil companies, but the paint companies, et
30:10 cetera. So those are your kind of natural shorts. If you think China's going to do nothing
30:15 in terms of any stimulus, and it's going to let the currency depreciate, then obviously
30:20 commodity prices, metals in particular, would take a hit from here. So you're just looking
30:25 at those pinpoints of where you can naturally go short the market, where there's factors
30:32 playing in those sectors, which would have the sectors or share prices falling.
30:38 Andrew Holland, much appreciate you joining us on such a short notice, but such an important
30:43 day. So great to have your views. Thank you.
30:45 Thank you again. Thank you.
30:46 Our pleasure was ours. Well, that's Andrew Holland, largest CAT3 AIF, and giving us his
30:52 views. Cautious is, I think, the tone was. Siddharth Bhaiya also kind of sounded that.
31:00 Everyone is not very confident, Neeraj, and that's why keep taking away from everyone.
31:04 Exactly. No one wants to really stick their neck out and say that, yes, this is going
31:08 to sustain, but everyone is positive on the India growth story.
31:11 Yeah. So the long term, everybody's positive. The short term, are there some excesses? Sure
31:15 they are. You know, which is why I think I'm waiting for our next guest to come in. He
31:19 caught in and his belief around Indian markets and the growth has been unwavering now for
31:25 the past multiple quarters. And he's written this story very well. And therefore, it'll
31:31 be great to have him to try and understand how is he feeling about this, because much
31:35 unlike our other two guests, who, of course, had a terrific run in their PMS or AIFs in
31:40 whichever way, but they were sounding cautious. I would love to know if our next guest is
31:44 also sounding cautious as we speak. But, Hiral, aside of what guests are saying, just what
31:50 the data is screaming out to you. Maybe we're talking to the Motilal Oswal team, for example,
31:55 with data, the wealth team with data, and they're saying that there are statistics which
31:59 show that while there is fear around mid-caps and small caps, small caps are actually a
32:04 lot less dangerous right now versus the mid-cap index of mid-cap 150. So, data you can slice
32:12 in multiple ways, and it could throw multiple things at you. But frankly, the conversations
32:18 with some of the companies and their belief around what could happen to earnings because
32:22 of a number of factors is very strong. Sometime in the next 24 hours, viewers will hear a
32:29 conversation with a company which is in an extremely overvalued pocket, which is railways.
32:33 You could argue. And we spoke to T-Target wagons from the shop floor. He's given reasonings
32:38 about why people's beliefs or fears around cash flows not sustainable are not true. But
32:46 like I said, the guy who actually got it spot on, Hiral, who's been an unrelenting India
32:52 bull for the past so many quarters, and I was at a party with him wherein a company
32:57 management told him that you guys got the bull market in our sector as well perfect,
33:02 but we didn't get it. Vikas Khemani of Carnelian Johnson right now. Vikas, great having you.
33:06 Thanks for taking the time out. And I suspect, or rather I don't suspect, I'm sure that
33:11 you must be a very, very happy man currently as we hit 20,000.
33:15 I think this is only one in a, you know, just a milestone. There's no, let me send this.
33:24 This is just a one milestone, basically in the whole long journey of India success story,
33:29 India bull story panning out. So yes, of course, 20,000 is a milestone. So one should celebrate.
33:35 But in my opinion, it's a very, you know, small pit stop in a long journey. I would
33:41 say that the real big bull story of India is yet to fold. What we have seen is probably
33:47 a trailer, the real movie is yet to happen. I think after a very long period of time,
33:54 India is seeing a very well diversified, sustainable growth. And I like to say that, you know,
34:00 we are spoiled for choice. Today, look at banking, automobiles, manufacturing, IT, you
34:06 know, infrastructure, everything is being reimagined. Everything is being reimagined
34:12 in the context of domestic demand, as well as the export potential. So in some sense,
34:17 India is setting global standards. India is going, taking a global leap. And when this
34:22 kind of transition happens, and thankfully, we have a leadership, you know, at the government,
34:28 which is also visionary to enable some such of these potentialities of India. So I think
34:34 we are leapfrogging in everything. G20 was just another, you know, showcasing of what
34:39 India could achieve. You know, whether it is space, whether it is infrastructure, whether
34:44 it is soft power, whether it is global cloud, I think India is making rapid progress. And
34:50 whenever such kind of transition happens, I call it orbit shift, then the magic event
34:56 for the country is waiting to happen, it is happening. So while we all should cheer that
35:02 we have hit 20,000, but we all should see is a very early start in our long journey.
35:06 Good afternoon, Vikas. You know, earlier as well, you know, probably when we were in that
35:11 consolidation phase in the last, after we hit a record high last time, you have been
35:18 of the opinion that this kind of consolidation that we are seeing in the markets is actually
35:23 a time which is creating space for a further, you know, market rally. And you've been sticking
35:29 your neck out at it as well. So from here, that we've just hit a number of 20,000. What's
35:35 the kind of up move that you're looking at? And what are the spaces or sectors that will
35:41 help us see that uptick? Like I just said that, you know, Nifty will not 20,000, maybe
35:48 50,000, 40,000 is not very far, it is there, it will happen. It's only a mathematical number.
35:54 And like I said that we are spoilt for choice. I think this time around, the width of the
36:01 you know, participation is so high, that there are many ways money will be made, wealth will
36:06 be created, banking, manufacturing, you know, IT, infrastructure, you know, startup ecosystem,
36:14 I think there's a very, very, very wide choice. So everything will contribute to it, there
36:20 will be, you know, small pockets where some sectors will lead, take lead for some time,
36:25 some will consolidate it, though that's part of the market like banking, took a consolidation
36:29 in last six, eight months, now it is taking a lead. I mean, those things will keep happening.
36:34 But keep in mind that India story is very wide, deep. And that makes it very, very interesting.
36:41 And today, what we have seen so far, you know, we haven't seen any global capital coming
36:45 to India yet. And mark my words again, post elections, we will see an avalanche of capital
36:51 coming to India, because there's no market of India profile where you can deploy capital
36:56 with this kind of depth. And with this kind of potential confidence on sustainability
37:01 of growth. >> Because I know we have to thank you, but
37:03 I'll just take one more minute of your time and just ask you one question around the concerns,
37:07 because you are constructive from the long term perspective, the near term, would a weaker
37:12 rupee, a higher crude price, et cetera, be near term spoilsports? I know the long term
37:17 story is intact. But now that we've hit a milestone, maybe we are expensive optically
37:22 on valuations as well, and there are these concerns, could these bring a bit of a correction,
37:28 a healthy one at that maybe, into the markets? >> Like I said, there will be situations,
37:34 so let's say crude hits $100, which I don't know, I don't think it will, but it can, who
37:39 knows? There might be some impact on the inflation right now, I think the world is fighting inflation,
37:44 in some sense, I think India is also a bit of a, you know, on a higher side. But you
37:49 know, good part is that our government is very sort of proactively managing this part
37:54 of it, like what we saw, all of the world reeled under the inflationary pressure, because
37:58 of the crude oil sometime ago, but India managed it well, right? So I think when there's a
38:02 proactive governance, you're confident that it will be managed well. But having said that,
38:07 there will be periods of consolidation, corrections in the market, this journey is not going to
38:11 be one way. And you know, there will be some more of the reason for coming through. Let's
38:15 say if a news comes like SVB came sometime ago, you know, there might be potential, you
38:20 know, you know, risk sitting somewhere else, no doubt that the US economy is sitting on
38:25 that the leverage in the US economy is kind of high. So all those things can create some
38:31 kind of some kind of temporary setbacks, corrections, but they will be only against slowdowns. Fortunately,
38:40 I don't see any bubble within the Indian economic space. I don't see any major risk from the
38:45 economic space, we have a good forex reserve, our current account deficit is well placed,
38:49 our fiscal account is well managed. So you know, our banking sector is reasonably well,
38:53 you know, capitalized. So you don't see any excessive getting built, you know, at the
38:57 economic level, of course, in the markets, there will be some excesses always will be
39:01 there. And you know, as and when those excesses get built, they will get punctured. But at
39:05 a collective level at a market level, I don't see any major excesses getting built.
39:09 Absolutely. I think the levers in terms of the India's growth story absolutely intact
39:14 because as you're mentioning, thank you so much for joining us on this day when we've
39:18 hit this magical number of 20,000. I know there's yet too much more in store for all
39:23 of us. So Neeraj, clearly, you know, from all the guests from Andrew to Vikas to Siddharth,
39:29 from whatever they've told us, clearly the confidence level in terms of India is absolutely
39:35 strong. Everyone's betting big from a medium to long term perspective. Yes, no one's really
39:41 confident of how many bouts of correction or dips that could be in that journey. There
39:46 could be hiccups. Absolutely. Exactly. So that's what people are talking about. But
39:52 in comparison to other countries, in spite of the valuations being stretched, people
39:58 still have the confidence. And if you're going to see the FI money come in, that leg of rally
40:02 is also going to be really strong. I mean, it'll be really interesting to see what happens
40:08 to earnings in that interim. And that does that give more ammo to FI's to come and think
40:13 of putting money, even if it means it's slightly above standard deviation valuations. So but
40:19 that's for another day here. For today. Sorry, I was just going to say that even the small
40:24 cap rally, right, what we've seen so far is not a rally, which is just from an optics
40:30 perspective. It's based on fundamentals, because the kind of order books that you're seeing,
40:34 the kind of execution, because from here on, if the execution is on track, and if the kind
40:41 of orders that the government is announcing as well as that was mentioned that even if
40:45 20% of it is, you know, there is execution, it's a different story for us, right. So there
40:50 are fundamentals, even for the small caps to see this kind of movement.
40:53 Most certainly, I mean, at some point of time, you got to question as I think Ravi Dharamshree
40:57 was questioning today on Twitter, that white paint companies by market cap, there are some
41:01 smaller names, which are fabulous growth story. But yes, there are pockets of excesses. I
41:05 mean, the SME IPO space, it's not just one IPO that Siddharth was talking about. There
41:10 are two or three who've gotten these obscure subscriptions, so on so forth. So there are
41:15 issues but they're happening in the US as well. The golf maker, which we wrote about
41:20 yesterday.
41:21 600% I think and then a crash.
41:23 Yeah. So I mean, it's happening multiple times. But the limited point is this macro story
41:28 we'll do tomorrow. You know, today we should celebrate, we should wrap up this show, go
41:32 to the newsroom, and then try and celebrate with the team because like it or not like
41:36 yes, it's a milestone. And yes, there are more to go. But 20,000 is a special milestone.
41:40 And we should celebrate it.
41:41 Absolutely. A Friday has come in on a Monday. I think that's what it seems like. So lots
41:46 more you will be able to watch on BQ Prime. In fact, if you've missed this conversation
41:50 that Neeraj and I have had with all the guests, please tune in to bqprime.com. And you will
41:55 be able to catch all the action there and lots more guests during the day as well as
42:00 tomorrow morning, where you will get to hear updates as to what's in store next. That's
42:04 all that we have in this session. Thanks for joining us and have a great evening today.
42:16 [BLANK_AUDIO]