NDTV Profit | All You Need To Know (2912)
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00:00 Crude continues to remain subdued as demand worries persist.
00:04 The world's largest oil importer, China, is likely to see a slowdown in demand growth
00:09 next year, as per Bloomberg.
00:12 Jobless claims in the US went up for the week ending December 2 but the overall number falls
00:19 after hitting a two-year high last week.
00:22 The cooling labor market pushes stocks to eke out gains as they snap a three-day losing
00:28 streak.
00:29 The US 10-year Treasury rises to 4.17% overnight.
00:33 Sugar stocks will be under pressure today as the government curbs the use of sugarcane
00:39 juice for ethanol production.
00:41 This may delay the 20% fuel blending target which was set for 2025.
00:47 And finally, IIFL securities gets relief.
00:50 The Securities Appellate Tribunal overturns the SEBI's order restraining the financial
00:54 services company from acquiring new clients.
00:58 It also lowers the penalty from Rs. 1 crore to Rs. 20 lakh.
01:03 Alright, now let's start with setting you up for the biggest event of the week and that's
01:09 the outcome of the RBI Monetary Policy Committee's two-day meeting.
01:14 Most economists are expecting a status quo on the rates and Pallavi Nahata is joining
01:18 me to tell you why.
01:20 Pallavi, morning.
01:21 What do you have for us?
01:22 Hi Alex.
01:23 Good morning.
01:24 So, like you said, India's Monetary Policy Committee is set to announce its decision
01:30 in a very short while from now.
01:32 The MPC is likely to continue to maintain a status quo.
01:36 In fact, the last time I checked, of the 44 economists polled by Bloomberg, 43 expect
01:43 a status quo.
01:44 Now, crude prices are a little bit lower from when the MPC last met.
01:49 Growth looks solid and core inflation has been easing.
01:53 So, all in all, it would be fair to say that the RBI does see greater optionality this
02:00 time around.
02:01 Still, it's expected to remain cautious.
02:03 Let's have a very quick look at what's changed from the last policy to this one.
02:08 GDP growth came in stronger than expected for Q2 FY24.
02:14 It came in at 7.6%.
02:17 Inflation came in at 4.87% in October.
02:21 That's the second straight month that we saw inflation coming within the central bank's
02:27 target range of 4 plus or minus 2%.
02:30 And crude, as I mentioned, has significantly eased.
02:35 So, what we do expect going forward is that the RBI is likely to continue to remain cautious.
02:42 One reason for that is that food and beverage inflation still remains fairly strong.
02:48 It's coming at 6.2% in October.
02:52 That's almost the same as what we saw in the previous month.
02:56 So, apart from expectations of a status quo, we're also expecting liquidity conditions
03:02 to remain tight going forward.
03:04 Absolutely.
03:05 Thanks so much, Pallavi, for bringing us those details.
03:07 And of course, between last policy and this one, you also had regulatory changes in the
03:13 banking space.
03:14 So, you could see some commentary on that during the statement today, which by the way
03:18 is at 10 a.m.
03:20 So, you can track that live right here.
03:23 Let's talk about a few more headlines from the global scenario before we head to the
03:28 Indian markets.
03:29 And we're tracking the latest data from the US.
03:31 Applications for jobless benefits rose for the week ending the 2nd of December.
03:36 However, the overall number of people collecting unemployment benefits fell after hitting its
03:40 highest level in two years last week.
03:43 Claims for unemployment benefits rose to 220,000 for the week ending the 2nd of December and
03:49 that was in line with expectations.
03:52 The cooling labour market has pushed US stocks to eke out gains after they snapped a three-day
03:57 losing streak and the Nasdaq composite climbed over a percent while the S&P 500 and the Dow
04:02 gained about 0.8 and 0.2% respectively.
04:06 Brent crude has remained a little subdued trading below the $75 per barrel mark.
04:10 I'm talking about Brent here and not NYMEX.
04:13 And the latest update is that China will likely see oil demand growth slowing next year, which
04:20 casts further doubt on the global demand scenario for 2024.
04:24 China is expected to consume an additional 500,000 barrels per day and that's according
04:30 to the median of estimates of 11 industry consultants and analysts that were surveyed
04:35 by Bloomberg.
04:36 That's less than a third of the increase that was seen in 2023, which is why there
04:41 is a bit of a concern.
04:42 But let's set you up for the day's trade with the latest action from the F&O space
04:46 and what you need to know heading into trade today.
04:49 To tell you more about the key levels to watch, I'm joined by Agam Vakil.
04:53 Agam, morning and one eye on 21,000?
04:56 Yeah, 100% Alex.
04:58 So, it was a quiet day of trade yesterday.
05:00 We didn't see too much traction despite the fact that it was in fact the nifty weekly
05:04 options expiry coming through.
05:07 And in terms of option premiums too, perhaps on expected lines, we saw considerable contraction
05:11 there.
05:12 But I'm going to start off with how things have panned out in the index futures.
05:16 So far now, even as the underlying declined by around 0.2%, we did see a little bit of
05:22 an increase in open interest as far as your index futures go to the tune of nearly 7%.
05:27 Coming down to the bank nifty, the trend of unwinding has now ended and we are now starting
05:34 to see a little bit more increase in open interest.
05:37 And this time perhaps towards a little bit of longs building in, even though the underlying
05:42 has closed absolutely flat.
05:44 Let's talk about how open interest has been and is coming through across the several strikes
05:49 on the nifty.
05:50 So far now, we continue to see the 21,000 call as the one with the maximum open interest
05:56 and that perhaps could still provide market participants with a little bit of resistance
06:00 on the higher end, even though we have seen several attempts for the nifty to move above
06:05 that mark.
06:06 So far, that hasn't been the case.
06:08 And of course, in terms of puts, continue to keep an eye on the 20,900 and the 20,800
06:14 levels because that's where we've seen a little bit more traction come through as far as your
06:19 writing is concerned.
06:20 Let's move on and talk about all your open interest gainers and losers.
06:23 So in terms of open interest gainers, we are keeping an eye on the likes of Rampuccini,
06:28 HUL and Apollo Tyres, where we did see short building up.
06:32 Remember, the sugar sector will be in focus on account of the news with respect to pricing.
06:38 And of course, Concord and MGL on the other hand saw longs building up.
06:42 On the other hand, in terms of stocks which are unwinding, we saw short covering across
06:46 in the top losers as far as open interest is concerned.
06:49 So BEL, Tata Communications, Bata, as well as Zee Entertainment along with Canfin Homes,
06:54 all of them looking at advances and declines in open interest.
06:58 So we continue to keep an eye on this one.
07:00 But Alex, at the end of the day, it is still going to be about the nifty and whether or
07:03 not it can in fact scale above 21,000 for now.
07:06 Alright, so that's a key number to watch.
07:08 But Agam, we also talked about life insurance companies and in fact, LIC yesterday gaining
07:14 over 5%.
07:15 It's had quite a stellar week over the last four or five trading sessions.
07:19 But the other private insurers have also had quite a bit of gains over the last month or
07:24 so.
07:25 The latest update of course, has to do with the insurance data for the month of November.
07:29 It's not looking too encouraging though for the private players.
07:32 What do you have for us?
07:33 Right.
07:34 So, well, the month of November in general, Alex, has been a challenging one.
07:38 And for a couple of reasons.
07:40 One is the fact that they are coming off on a high base.
07:43 And secondly, the offers this month have been higher.
07:47 And because of that, we've actually seen a little bit of a decline as far as your private
07:52 AP is a concern for your private players.
07:54 In fact, to the tune of around 1.3%.
07:56 So if we can in fact actually bring the list of all those companies.
08:00 So you have HDFC Life, which seen a decline around 3.7%.
08:04 Let's talk about the others and move on.
08:06 Well, we have something like an ISAI, Proo and SPI Life, which have also seen a decline
08:11 around 2.5%.
08:12 Max Life is the only one which has in fact seen a growth on a year on year basis.
08:18 And say for that, we have something like an LIC.
08:20 Again, a very, very sharp decline to the tune of nearly 9% there.
08:25 Coming down to the other aspect when it comes to your market share.
08:29 For now, SPI Life, the market share has been stable.
08:32 We have seen a rise in the market share for Max Life.
08:35 But remember, this is also on account to a certain extent because of the sharp growth
08:39 that we've seen for the month.
08:40 Again, stability coming in for HDFC Life and ICICI Proo as well.
08:44 In terms of your new business premiums growth, we are seeing a sharp decline in HDFC Life.
08:51 On the other hand, Max Life once again continues to outperform.
08:54 Again, some key metrics, but we have to remember that Max Life again is coming off a low base.
09:00 And as far as your market share is concerned, at the moment, the way things stand, at least
09:04 in your larger insurance minus, of course, your LIC, SPI Life has still the largest share
09:12 for now, followed by something like an HDFC Life at around 10%.
09:16 And then sub 10% would include ICICI Proo, Max Life and Bajaj Allianz.
09:20 But on the whole, a weak month.
09:23 And the month of December is going to be crucial in terms of the kind of trend that we can
09:28 expect in the second half of this financial year, Alex.
09:30 All right.
09:31 Thanks so much, Harkam, for laying that out for us.
09:33 Now, it's time for a very quick break.
09:35 But before we head into that break, we had the finance minister speak about what to expect
09:39 in the upcoming budget.
09:41 And remember, this is an interim budget.
09:43 Here's what she had to say.
09:46 It is a matter of truth that the first February 24 budget that will be announced will just
09:52 be a vote on account because we are in an election mode.
09:57 An election happens during the summer, the coming summer.
10:01 So the budget that the government presents will just be able to or would just be a budget
10:06 to meet with the expenditure of the government till a new government comes to play.
10:14 So on that budget, following the British tradition, is called vote on account.
10:19 So no spectacular announcements are made that time.
10:24 So you may have to wait till after the new government comes in.
10:27 In July will be the next full budget.
10:30 July 2024.
10:58 Thank you.
11:27 Bye.
11:56 Bye.
12:24 Welcome back.
12:47 You're watching All You Need to Know.
12:48 Let's turn attention to a few stocks that are likely to buzz in trade today.
12:53 And we like to call it Stocks to Watch.
12:55 We're joined first by Varsha, who will tell us a little bit more about Zomato as well
13:00 as 5 Star Finance that will be in focus.
13:04 Varsha, morning.
13:05 Why are these likely to be in focus?
13:07 So good morning, Alex.
13:08 So stakes sailing a couple of companies.
13:10 So let's start with Zomato.
13:12 So we have Japan Soft Bank, SBA Growth is likely to sell 1.1% stake in the company through
13:18 a block deal.
13:19 Now, off the side stand at Rs. 1,127 crore, floor price has been set at Rs. 120.
13:26 Now, this offers a marginal discount to the last closing price.
13:29 Also, Citi has been appointed as the banker for the transaction.
13:33 Now, SBA Growth held 2.17% in Zomato in September quarter, of which it sold almost 1.1% stake
13:40 in October.
13:41 If you see the stock performance for the company, the year-to-date performance of the company
13:44 has been 102%, while one-year stock performance for the company has been almost 90%.
13:49 Now, if you see the analyst recommendation of the 29 analysts tracking the stock, 25
13:55 maintained buy call, 0 suggested a hold call and 4 suggested sell call with upside potential
14:01 of almost 10%.
14:02 Then we have 5 Star Business Finance, where Peak 15 Partners TPG and Matrix Partners plans
14:10 to sell part of their stake with combined base size of USD 1.5 million.
14:15 Now, this comes with an option of upsizing of Rs. 75 million.
14:20 ICICI Securities mocks the brokers managing the deal.
14:24 Now, if you see the stock performance, the year-to-date stock performance of the company
14:28 has been 25%.
14:29 Alright, thanks so much for bringing us those details, Varsha.
14:33 But we've got more stocks to watch out for and those will be IRB Infra as well as Olectra
14:38 Green Tech and IFL Securities, which we made a mention of earlier.
14:44 Himansh is joining to tell you more about each of those.
14:46 Himansh, take it away.
14:48 Yes, Alex.
14:49 So, IRB Infrastructure is the first counter that's going to be in focus is due to its
14:54 20% rise in total collections for the month of November.
14:57 It clocked in Rs. 437 crores of revenue, majority of which is coming in from the Mumbai-Pune
15:02 Expressway.
15:03 However, if you look at it sequentially, though, you are seeing a bit of moderation
15:08 in total collections compared to the previous month of October, where it clocked in Rs.
15:13 447 crores of revenue.
15:15 What we have been seeing is that Diwali has led to some softening in economic activity,
15:21 at least with regards to total collection, as people chose to celebrate in their homes
15:26 and not travel as much outside.
15:29 Maximum total collection, as I mentioned, is coming in from Mumbai-Pune.
15:32 However, in terms of guidance, the second half is expected to see a 20% growth in total
15:39 collection over the second half of this year.
15:41 The Gujarat Build, Operate and Transfer project is expected to commence soon and 15% growth
15:47 is expected in the EPC segment, which is the Engineering, Procurement and Construction
15:52 segment.
15:53 From a stock perspective, the IRB developer stock has run up 22% year to date and it could
15:59 see some potential upside today as well.
16:02 Next is Electra Green, where the company has received an order for 40E bus supply and maintenance
16:07 from Vasai Virar Municipal Corporation.
16:09 The order is valued at close to 63 odd crores and the order is to be delivered over a period
16:14 of 7 months.
16:17 The net order book position at the moment stands at 8,209 buses and 214 of them were
16:25 delivered in the first half of this year.
16:27 In terms of capacity addition, they are working towards adding more EV capacity and their
16:32 annual capacity outlay of 5,000 vehicles is expected to be operational by the fourth quarter
16:38 of this year.
16:39 Lastly, you have IIFL Securities, where the Securities Appeal Tribunal has set aside SEBI's
16:45 order restraining them from onboarding more clients.
16:48 The company, as of the last quarter, had 860 clients, both domestic and foreign.
16:54 In June, the company was allegedly barred from onboarding new clients because of the
17:00 misuse of funds.
17:01 However, they have been vindicated from those allegations now and the penalty imposed has
17:08 been reduced from one crore to 20 lakhs and the punishment is also now being called a
17:15 technical glitch at most.
17:17 Alright, alright.
17:18 Thanks so much, Himansh, for bringing us those details.
17:20 IFL Securities, of course, want to watch out for and trade today.
17:23 But the other group of stocks that will likely be in focus is going to be the sugar stocks
17:27 because they ended the day in the red on Thursday and this was on the back of news that the
17:33 government had banned the use of sugarcane juice to produce ethanol.
17:37 My colleague, Hiral Dadia, spoke with the management of a couple of sugar companies
17:41 to find out more about the supply constraints that have caused that move.
17:46 The first reaction is one of relief because what we were hearing since yesterday was that
17:54 all ethanol made out of cane juice as well as the heavy molasses would not be permitted
18:03 going forward.
18:04 But now what we are seeing in the notification is that only cane juice ethanol has been banned
18:13 effective today.
18:14 So whatever has been produced till now from cane juice against government's oil marketing
18:21 company's orders, that would continue to be supplied.
18:25 But henceforward, only wheat-heavy ethanol will have to be made.
18:32 We were expecting that they would do this if there's a shortage of sugars.
18:37 So I think that's what they've done now.
18:40 Okay.
18:41 And what would this actually mean for the industry?
18:45 See, those people who invested heavily for this kind of option would suffer.
18:53 And we don't know how long it's going to last.
18:55 So this is going to be something which is probably going to be likely.
19:01 But we should have probably created a buffer last year of sugar if we anticipated a problem.
19:08 But they were thinking that there will never be a shortage of sugar.
19:12 All right, let's talk about BTM.
19:13 It was a big underperformer to say the least in trade yesterday and the stock dropped about
19:18 18%.
19:20 And that was on the back of the operational update that it sent out.
19:24 But the company is going in for India's largest ever anchor round and it is oversubscribed
19:29 by about 10 times.
19:31 We've got this update from Sajith Mangat.
19:34 Sajith is joining in to tell you more about what this means.
19:37 What can you tell us about the contours of this?
19:41 You know, the thing is that our PTM is under pressure for the last couple of days.
19:46 Yesterday, it was down nearly 18% because of the kind of guidance that came in.
19:50 And we've been seeing a lot of commentary coming from brokerages.
19:55 And that's basically putting more pressure on the price of PTM going forward.
19:59 You have the JP Morgan, which has downgraded the stock to neutral.
20:04 We have Jefferies, which is now putting a price target of 1050 as against 1300.
20:11 And it's primarily on the back of the fact that the company has guided for a 40 to 50%
20:17 decline in postpaid loans.
20:19 There's going to be a sharp moderation coming in from a loan distribution business, which
20:25 used to be a very high margin business for PTM.
20:29 And which was one of the reasons, the growth in that segment was one of the reasons why
20:33 the PTM stock was coming back into the investor radar.
20:38 Now that with this guidance, which is coming in from the company, it's going to have a
20:45 good knock on the earnings going forward because roughly this loan business is accounting for
20:50 50 odd crores per quarter.
20:53 And so we're looking at a hit of nearly 200 odd crores.
20:57 And the biggest hit is going to come from Q4 onwards because in Q3, the first two months
21:03 have been relatively good for PTM as per the guidance which it came out with.
21:11 But December is when it's going to take a sharp hit for this entire segment.
21:17 So yeah, so after 18% knock and the stock hovering around 661 odd, you're going to see
21:24 further pressure because there are still some of the anchor investors which came in at the
21:31 time of the IPO are still invested in this company and there are many of the private
21:35 equity companies which are also trying to exit in that.
21:38 So they really have some pressure coming in the near future for PTM going forward, Alex.
21:44 Alright, thanks so much, Sajid, for bringing us those details.
21:48 We were talking about life insurance corporation earlier on the show and in fact, it gained
21:54 over 5% in trade yesterday, reclaimed the market capitalization of 5 lakh crore for
22:01 the first time after July of 2022.
22:04 And it has, of course, been in an uptrend after hitting a lifetime low of 530 on the
22:11 31st of March of 2023.
22:13 Now, a couple more updates before we end and this is from the global space.
22:18 You have the Nikkei 225, which I have pointed out, which is one of the underperformers in
22:23 trade today from the Asia pack.
22:25 And in fact, you have mixed trade in Asia.
22:28 But that's on account of the fact that there could be a major move in Japanese monetary
22:34 policy.
22:35 You had Ryozo Himeno, who is the Bank of Japan deputy governor, who hinted that any exit
22:42 from the country's ultra-loose monetary policy could actually benefit households, fueling
22:46 speculation that such an exit could be underway because the Bank of Japan has been
22:53 one of the holdouts for policy action on monetary policy and it has maintained its rates at
23:01 very low levels in order to spur the economy.
23:04 And of course, as a result of that, you had the yen that has been under pressure significantly
23:09 over the course of this year.
23:11 Japanese stocks as well trading with cuts this morning.
23:15 But all action at home is going to be on the monetary policy committee's outcome or rather
23:22 the meeting that took place over the last couple of days.
23:25 The outcome is at 10 o'clock this morning when the RBI governor announces that outcome.
23:31 And we're largely expected to have a status quo on the policy rates.
23:36 But there could be a few changes with regard to announcements on liquidity and other macro
23:42 prudential norms.
23:43 So, you would want to watch that space very closely.
23:45 And of course, there could be statements made about the regulatory action that was taken
23:49 on unsecured lending.
23:51 Remember, the risk weights associated with unsecured lending were increased between policies.
23:57 So, the RBI governor is almost certain to have a comment about that.
24:02 But that brings us to the end of this particular edition of All You Need to Know.
24:05 Thanks so much for tuning in.
24:07 Up next is India market open.
24:10 So, do stay tuned for that.
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