- #HDFCBank's muted Q3 business update
- Why has #HindustanAeronautics surged in trade today?
Find out what's happening in trade so far with Hersh Sayta and Smriti Chaudhary on Market IQ. #NDTVProfitLive
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- Why has #HindustanAeronautics surged in trade today?
Find out what's happening in trade so far with Hersh Sayta and Smriti Chaudhary on Market IQ. #NDTVProfitLive
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For more videos subscribe to our channel: https://www.youtube.com/@NDTVProfitIndia
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Don't enter the stock market unaware. Read all Research Reports here: https://www.ndtvprofit.com/research-reports
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02:25 Good afternoon and welcome.
02:26 You're watching Market IQ on NDTV Profit.
02:29 I'm Harsh Saita.
02:30 Quick check on the markets.
02:32 Well, the Nifty opened higher, but we've
02:35 seen a bit of a cool off since.
02:37 If we could quickly have the graph for the Nifty
02:39 to indicate where it's at, it's currently just below the 21,700
02:44 mark, up a tenth of a percent or thereabouts.
02:47 After yesterday's gains, not a bad day if we close this way.
02:51 So no complaints on the benchmark front.
02:54 Let's quickly also have a look at the index constituents,
02:58 what's really gaining, what's losing on the Nifty 50 index.
03:02 And within that, you see the likes of--
03:06 at least the contributaries, you see the likes of a TCS, Infosys,
03:09 L&T, ICICI Bank, really aiding the Nifty HDFC Bank.
03:15 And we'll come to that part of the market
03:18 and what's happening within the banking pack.
03:20 But HDFC Bank is definitely the top drag.
03:23 38 points, which is more--
03:26 almost 2/3 of the negative contributaries on the Nifty
03:30 is contributed by HDFC Bank.
03:32 And that's really been the drag in trade today.
03:35 If we exclude HDFC Bank, the market's probably up 70 points.
03:39 Therefore, nothing to complain about in that sense.
03:43 Also, let's have a quick look at broader markets.
03:46 Broader market indices outperforming the Nifty 50.
03:50 And that continues to be the theme of 2024.
03:54 The Nifty mid-cap is up, as well as the small cap,
03:57 up roughly 0.5% or thereabouts.
03:59 Among sectors-- and if I can quickly highlight the Nifty Bank here--
04:03 around 0.25% down, again, the drag being HDFC.
04:07 You also have the likes of the Nifty Pharma,
04:11 which is down around 0.5% thereabouts.
04:14 The Nifty PSU Bank is also lower in trade today.
04:18 Among those gaining 0.7% on the Nifty Auto,
04:21 the Nifty IT Index has stood out today--
04:23 1% plus gains on the Nifty IT Index.
04:26 And that is very indicative of the way in which the Nifty
04:29 was shaping up as well-- TCS and Forces,
04:31 both among the top five contributaries on the Nifty Index today.
04:35 But that's where we are at with regard to the benchmark
04:39 and the markets.
04:41 Quickly on the central-- and speaking of sectors,
04:46 power has been in focus since today morning.
04:49 The likes of GE Power reaching life highs.
04:52 The CERC, which is the Central Electricity Regulatory Commission,
04:56 in its draft tariff norms for FY25-29,
05:00 has raised the return on equity for new storage-based hydro projects.
05:04 We have with us Vikas joining us.
05:06 Vikas, give us some perspective on this.
05:09 How should one read into it?
05:11 Yes, right. Basically, we reported in the morning also
05:14 that most of these power stocks have now started to perform well,
05:19 especially because the incentives of the ROE
05:22 for especially thermal power projects have been kept unchanged at 15.5%,
05:29 whereas for storage-based hydro power projects
05:33 or related projects, it has been increased to 17% from 16.5%.
05:40 So this was not anticipated.
05:42 Basically, the street anticipation was that this will be cut.
05:45 The ROEs will be cut because it's an important component
05:48 for tariff determination.
05:50 So if it is cut, the tariffs would also come down.
05:53 But that hasn't happened.
05:55 On storage-based projects, it has been increased
05:58 because the government shift is also now moving towards
06:01 green fuel-based power generation.
06:04 So that's going to kind of help or boost these kind of power projects.
06:08 And for thermal also, government has shown the intent
06:11 that now it wants to continue with these existing thermal power projects
06:17 as well as focus on green power projects in coming years.
06:21 Right. Thanks so much for that perspective, Vikas.
06:24 Of course, the power sector was a buzz.
06:26 Can we also have the graph of something like an NTPC?
06:30 The way in which some of these power stocks have moved
06:33 has indeed been absolutely stellar.
06:36 That's, of course, the intraday graph.
06:37 But if we can have the last three to six months to try and show
06:41 as to where NTPC has really gone, look at that.
06:44 That's a phenomenal graph, nearly doubling up
06:47 over the last 12 months or thereabout.
06:50 But let's quickly move on.
06:52 HDFC Bank, Q3 deposits up 2%, also 5% growth in advances.
06:58 Pragati is here with all of the details, the entire roundup.
07:01 Pragati, take it away.
07:03 Thanks, Harsh. Well, you're absolutely right.
07:05 HDFC's headline numbers for the third quarter are out.
07:08 But the reaction that the market has given is not entirely positive.
07:14 Clearly, we are seeing the stock's performance as well.
07:16 Let me give you a quick roundup of the numbers that we have in front of us.
07:19 The total advances are up 5% and even the screen is flashing these numbers for our viewers.
07:25 The gross advances are up about 4.9% quarter on quarter.
07:29 And if we see the deposits, they're up about just 1.9% quarter on quarter.
07:34 So clearly not a very big shift or a great upsurge if we see in terms of quarterly basis.
07:41 If we see the domestic retail loans, they grow about 3%.
07:44 And the commercial and the rural banking loans grow about 6.5% quarter on quarter.
07:49 But the corporate loan segment, once again, the growth was relatively slow
07:54 as it was just about 2% quarter on quarter.
07:57 CASA is one factor that we are definitely looking at across banks for this quarter
08:01 because considering the last two quarters, the way they have been,
08:05 CASA is definitely something we are looking at because the banks' ratio is stable at 37.7%
08:11 and expanded just about 10 bps.
08:14 And overall, if we look at CASA, it's just grew about 2.2%.
08:18 And interestingly, right after the numbers or the headline numbers that came out,
08:22 there were a couple of analyst reports that also came out that relayed very similar sentiments
08:27 as the way the market is also reacting that we can see in the stock also.
08:31 Now, one of the reports that Bernstein came out with is that the loan growth,
08:36 and they said it verbatim that the loan growth is average at best.
08:40 And as far as the deposit growth grows, which is another very important metric,
08:45 especially for this quarter, it is healthy and relative to peers.
08:49 But Bernstein is also expecting a positive surprise on the margin front.
08:53 And that is something we are waiting to look at at this point.
08:56 And once the actual numbers come out, we will definitely come up with a detailed analysis
09:00 of how they are looking like.
09:02 But, Harsh, interestingly, we also spoke to Rahul Malani, a banking analyst,
09:06 and here's a quick look at what he had to say about the numbers.
09:10 We continue to maintain a positive stance on HDFC Bank with a 12-month strike price target of around Rs.1900.
09:18 We believe that overall in calendar year 2024, we should see in the overall banking sector
09:26 seeing some reduction of pressure on the overall ROA.
09:30 But for us, HDFC Bank would be one of the banks in the largest private bank space
09:36 where we should see improvement in the ROA, which should help in re-rating the valuation multiples.
09:42 Right. That was, of course, Prakriti. Thank you so much for that roundup on HDFC,
09:48 followed by Rahul Malani on his views with regard to the numbers.
09:53 But very quickly moving on, one sector that's been in focus continues to gain,
09:58 despite a 7% rise on the Nifty Realty yesterday, continues to gain 4-5% higher today as we speak as well.
10:05 Pretty much all the constituents on that index in the green.
10:09 Soba, of course, was up nearly 15+% yesterday, so saw a little bit of, or seeing a little bit of profit booking as we speak.
10:17 But other than that, that one is in focus. And again in focus today because of the Q3 updates.
10:23 We've got two companies with Q3 updates. Anushi is here. Anushi, give us perspective on some of those numbers.
10:28 Right. So two companies in focus today are Macrotech Developers and Soba Limited.
10:33 So starting off with Macrotech, the company reported a pre-sales growth of about 12% at Rs. 3,410 crore.
10:40 And it guided that its nine-month FY24 pre-sales reached a level of Rs. 10,300 crore on track of the guided Rs. 14,500 crores for FY24.
10:50 However, it was the collections that were down by about 3% at Rs. 2,590 crore.
10:56 While the company did report an intraday high of 9%, it did reverse in early day gains and is about 0.5% up.
11:03 Now coming on to Soba Limited, it achieved a 37% pre-sales growth at Rs. 1,952 crore,
11:10 while the average price realisation was also up by about 15%.
11:14 The company also stated that it has launched two new residential projects in Q3 FY24 measuring about 3.83 million square feet.
11:23 As you mentioned, Harsh, some profit booking over here while the company did enjoy a phenomenal run yesterday on the back of the strong business update and yesterday's Alta performance.
11:34 So that was on the Realty stocks today.
11:36 Right, thank you so much for that Anushi.
11:39 We also have the likes of Hindustan Aeronautics which is buzzing in trade today.
11:44 It's a stock in focus because UBS has an initiating coverage note on the stock, target price Rs. 3,600.
11:51 Now let's give you a little bit of perspective here.
11:54 If we can have the one-year chart of HAL, it's up 3% today.
11:59 But the last one year, the stock has been a three-bagger.
12:03 And when I'm looking at it since 2020, the stock has been an 11-bagger.
12:09 It's created massive amount of wealth, especially given that it's a PSU stock.
12:15 And the target price of Rs. 3,600 further gives it a 20% upside.
12:21 So Mahima is joining in to talk to us about what UBS is really catching on with regard to HAL.
12:29 20% more upside Mahima, talk to us about what is UBS really suggesting in its note.
12:36 Right, Harsh. So as you rightly mentioned, they've initiated buy coverage for HAL and they've given a target price of Rs. 3,600.
12:43 And as you rightly mentioned, it's a 20% upside. Now they've backed this on multiple reasons.
12:48 The first one being that HAL's military aircraft, they have a monopoly in the military aircraft.
12:54 And they have faster capability of building up these aircrafts combined with significant policy push and robust domestic supply chain.
13:02 They've also mentioned that sharpened policy focus will lead to a compressed opportunity of 60 billion US dollars in the next five to seven years.
13:12 And also they see that new orders will see material step up and revenue will grow at a CAGR of 16%.
13:19 Moreover, they expect higher local content and lower staff costs that will support the EBITDA margins of HAL.
13:25 And they also believe that the own design manufacturing will drive the double digit EPS CAGR and their ROE will grow at 20%.
13:35 Now they also have mentioned that they set a target of their order book which will triple in the next from FY23 to FY26.
13:47 And they've also mentioned that they re-rate by a similar magnitude to BHA in the past decade.
13:54 So overall, if you see, as you rightly mentioned, HAL has been a multi-bagger since past two years.
14:01 This is a very good initiative by coverage by UBS on HAL.
14:07 Right. Very strong by coverage on HAL. Thank you so much for that Mahima.
14:13 Also, very, very strong order book, right, that HAL has around 80,000 odd crore is the current order book standing.
14:20 And, you know, there's no reason why the stock shouldn't buzz.
14:25 The only possible downside or risk currently within the HAL bureau system is execution.
14:33 That's always been where the challenge lies. But this time around, it seems UBS is positive even with regard to execution that HAL will do.
14:41 What they are seeming to suggest is that the next five years will see much more attraction with regard to execution,
14:50 given the urgency that the government has with regard to investments in defense.
14:55 And that will probably continue to keep HAL in focus over the next couple of years at the very least.
15:01 And of course, order pipeline being extremely strong. But let's take a very short break on the back of that.
15:06 More on the other side, of course. Stay tuned to Market IQ.
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18:51 Welcome back. You're watching Market IQ on NDTV Profit. I want to quickly mark out Gale.
18:57 We've had news trickling in that Vital has signed a long-term LNG supply deal with Gale.
19:05 You can see a spike on the stock 2% higher as we speak. Vital is set to deliver LNG from the global LNG portfolio of Vital.
19:13 And it's a one empty per year LNG supply deal for 10 years starting 2026.
19:20 On the back of that, you're seeing a bit of a stock reaction on Gale. I also want to check out what Powergrid is up to.
19:26 I haven't seen that, but there seems to be an order win with regard to Powergrid as well.
19:31 And if we can have a bit of a spike there as well on Powergrid.
19:36 But let's switch focus to macros. Let me try and break down what the services activity is reflecting within the economy.
19:46 Seems to have picked up in terms of growth momentum for the month of December. At least that's what the PMI data is indicating.
19:52 Pallavi is here to break down some of those numbers. Pallavi, give us some perspective.
19:56 Hi. So like you mentioned, services activity does appear to have seen some pickup in momentum in the month of December.
20:05 The HSBC India services PMI rose to a three month high of 59 in December.
20:12 That's compared to a print of 56.9 that we saw in the month of November.
20:17 Now, the increase was largely led by output.
20:22 To just understand this data better, typically a print above 50 indicates expansion.
20:29 So favorable economic conditions as well as positive demand trends are likely to have pushed up output.
20:36 On prices as well, the interesting trends that were seen in this data print, input cost inflation was at a 40 month low.
20:45 Despite that, output prices still rose and that's likely to translate into better margins for corporates for the month.
20:54 Composite PMI that comprises both manufacturing and services also increased to 58.5 from a print of 57.4 in the previous month.
21:05 And this rise is likely to have been led by services.
21:09 Right. Thanks so much for that. We'll switch focus from macros to IPOs.
21:16 Mobiquick has filed a DRHP for its IPO with SEBI.
21:19 Company plans to raise roughly 700 crore via a fresh issue of shares.
21:24 Rishabh is here to give us all of the details on that one. Rishabh, take it away.
21:33 That's right, Harsh. Mobiquick has filed for its IPO.
21:37 I've just got my hands on the draft Red Herring Prospectus. It is a 700 crore IPO.
21:43 It's a pure fresh issue that we're seeing. There's no offer for sale component.
21:48 We reported yesterday that they have filed a resolution for a 880 crore IPO to raise about 880 crores.
21:55 But we're seeing a reduced downsized IPO by Mobiquick.
22:00 As I get a better read on it, there will be a 140 crore pre-IPO placement component to this as well.
22:07 So if that gets fulfilled, the fresh issue size will reduce further.
22:11 What we're also seeing is that the proceeds from the issue they've detailed in the DRHP,
22:17 about 250 crores will be used to fund the financial services business.
22:21 About 135 crores will be used for the payment service businesses.
22:26 Another 135 will be used for investment in their data, machine learning, artificial intelligence forays.
22:34 And another 70 odd crores will be used for capital expenditure for their payment devices.
22:41 So, for example, sound boxes or POS devices, they'll use another 70 crore for that.
22:47 So these are some of the details that we've seen coming in as we get deeper into the DRHP.
22:55 Right. Thanks so much for that, Rishabh.
22:58 And again, we'll switch focus from Mobiquick IPOs to a crucial development in the tax space.
23:05 With regard to benefits for foreign investors in India,
23:08 Supreme Court of India has issued an interim stay on a Delhi High Court ruling.
23:12 The ruling pertains to TRC, which is Tax Residency Certificate,
23:16 which is a key document for foreign investors claiming tax advantages under bilateral treaties between India and other countries.
23:23 Countries like Mauritius, Singapore and the like.
23:26 We have with us Varun who's joining in with all the details and what it means,
23:31 because it's a crucial new development, right Varun?
23:37 Yeah, it is a crucial development since foreign investors might be now staring at uncertainties with respect to benefits under a double taxation avoidance agreement.
23:46 As the top court has issued a stay on a position that a valid tax residency certificate is sufficient proof to claim tax benefits under a DTAA.
23:54 Now a TRC or a Tax Residency Certificate is a document issued by the contracting state indicating a taxpayer's residency.
24:02 Last year, the Delhi High Court had reaffirmed this position that Indian tax authorities can't go behind a valid tax residency certificate
24:09 to deny capital tax exemptions as provided under the India-Singapore DTAAs and the other DTAAs as well.
24:16 Since in this case, the court was dealing particularly with the case against Blackstone Capital Partners,
24:21 the High Court said that the revenue authorities cannot question the sanctity of a valid tax residency certificate.
24:27 Now the High Court's decision came on the shoulders of various CBGT circulars, press releases, legislative amendments and various other judicial pronouncements as well.
24:37 Since the top court's final decision in this matter is yet awaited, experts still believe that this stay shall not only lead to uncertainty
24:44 regarding tax outcomes that foreign stakeholders were earlier assured of, but would also act against the circulars and court decisions
24:51 that reaffirmed that a tax residency certificate is a key document for treaty eligibility.
24:56 Right Varun. Right. So of course, we'll keep our eyes glued on that one crucial development where FIIs are concerned.
25:05 But quickly moving on, Tamil Nadu is gearing up to seal investment deals worth more than 5 lakh crore rupees
25:12 as it hosts its third edition of the Global Investors' Meet in Chennai on the 7th and the 8th of this month.
25:20 NETV's Sam Daniel spoke to Tamil Nadu Industries Minister TRB Raja on the number of deals and the changing image of the state. Listen in.
25:29 The number is going to be huge and the message I'm sure is going to be bigger.
25:35 This time around you will see that the world has recognized Tamil Nadu in its place as the most favoured destination for investors into India.
25:49 Tamil Nadu will also showcase itself as the knowledge capital, as the talent capital of India.
25:56 Are we looking at 3 lakh crore? Stop prodding me, Ran. But that's for the Chief Minister to say.
26:03 I can only say one thing. This is going to be the biggest ever Global Investors' Meet and this would be the most meaningful one also.
26:13 In the last two editions of Jim, the claims did not really translate into real investments.
26:19 This time, what's the strike rate you're looking at and what kind of jobs, what number of jobs these investments will churn?
26:26 This time around in this Global Investors' Meet, we have made sure that all the investments that come into Tamil Nadu
26:34 are first, all the investments, the investors have been thoroughly studied.
26:42 We've seen if they can provide the jobs that they are promising.
26:47 We've seen if they can provide the kind of infrastructure for the working atmosphere, for the workforce that they're going to take up.
26:56 We've also seen if the land is going to be properly utilized in its entirety for that purpose.
27:03 And we've also seen to an extent their financial capabilities also.
27:07 So, this time around, I think we're going to see a very good hit rate when it comes to investments converting into proper investments on the ground and providing jobs.
27:17 Any number of jobs you can share with us these investments will churn and what kind of jobs are we talking about?
27:23 Okay, lakhs of jobs for sure. Again, no precise number. That's for the 7th and 8th.
27:29 But…
27:33 Right, stay tuned for more coverage on that count as well.
27:36 But that's all the time we have on the show for you today.
27:40 One quick note which I want to flag off, Nomira has come out with its note suggesting a nifty target of 24 to 60.
27:50 We'll discuss that note in more detail on the closing show.
27:53 So, stay tuned to NDTV Profit for that.
27:56 But with that, we're completely out of time from the entire team who puts the show together as well as myself.
28:02 Thanks so much for watching. Continue to stay tuned to NDTV Profit.
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