- #ONGC, #HPCL, #IndianOil & OMCs
- #JupiterWagons, #BajajAuto, #GCPL, #Marico
Find out where money is moving in the market today with Hiral Dadia and Agam Vakil on 'Hot Money'. #NDTVProfitLive
- #JupiterWagons, #BajajAuto, #GCPL, #Marico
Find out where money is moving in the market today with Hiral Dadia and Agam Vakil on 'Hot Money'. #NDTVProfitLive
Category
📺
TVTranscript
00:00 Morgan and Morgan Stanley reports and Bajaj Auto in the fast lane both to meet
00:08 today to consider and approve a proposal to buy back if it goes through this will
00:13 be a second buyback for the company in the last two years
00:19 Hello and welcome this is Hot Money I am Agam of Kheel and with me is Hiral Dadia.
00:37 Well we are going to take you through what's happening in terms of the most
00:41 active stocks in today's day of trade in this edition of Hot Money but at the
00:44 moment let's start by taking a look at how the markets are faring and at the
00:48 very present we are seeing the nifty as well as the other key benchmarks
00:54 trading at days lows. There's been a lot more weakness coming through over the
00:59 course of the last couple of hours of trade and a lot of that is on account of
01:03 increased volatility perhaps a lot of traders are now at the moment taking off
01:09 their positions even as we move into the early session or rather the early legs
01:16 of the earnings and for now of course what's really weighing on the indices at
01:21 least is something like a UPL that's down around 2.8 percent. We also have a
01:26 lot of weakness in the FMCG sector as a whole which has in fact been weighing on
01:31 the indices so something like a Tata Consumer Products which is down 2%
01:36 Hindustan Unilever that's down around 1.7% and ITC is the other heavyweight
01:42 which is also well weighing on the indices that's down around 1.5%
01:47 in fact if you pull up the constituents of the nifty you will notice that it is
01:53 essentially the FMCG pack which is you know bringing the indices down and
01:58 that's also the reason why 150 odd points declines against just about 17, 16, 17
02:05 odd points advancing. So we don't have too much speak for as far as the strength
02:10 in today's day of trade is concerned. Very quickly let's address what's
02:13 happening in the broader market as well and you know when it comes to the indices
02:17 they are also moving largely in tandem with the benchmarks. They're also
02:22 trading near days lows that's the mid cap 150 and the small cap 250 is also
02:27 well not at days lows but it is looking at some amount of weakness. That's as far
02:32 as your markets are concerned for certain there is an increase in a little
02:37 bit of volatility. The question is can we expect this as a new trend that is a
02:43 downward one, Hiral? Absolutely and that's going to be interesting because if you
02:46 see the kind of fall we are witnessing right now nearly 200 points from the
02:50 day's highs in terms of nifty 50 and it's mainly the banking counters which
02:53 are causing that fall but before we get into stock specific action the stocks
02:58 that we are going to discuss today as well we have names like Marico, GCPL
03:02 both of these counters seeing pressure on the back of the business updates. IOC,
03:06 BPCL again good names seeing a buzz in today's session from the oil and
03:13 gas pack. Sula Vinyas is the stock of the day. Alok Industries more than 60%
03:17 gains in the last five trading sessions. Spark is seeing some pressure and this is
03:21 ahead of the update that will come on Saturday and you have a Jupiter Wagons
03:25 that is in focus but let's welcome in our guest Sharmila Joshi from
03:28 sharmilajoshi.com to discuss further. Sharmila good morning and welcome to the
03:33 show. My first question coming to you before we get into stock specific action
03:37 is what's happening with the markets right now. A clear 200 points cut
03:42 coming in in terms of nifty 50 from the day's highest point level and you have
03:46 major pressure that's building in in terms of bank majors. FMCG is taking a
03:50 beating as well. What do you make of this cut? Is this a trend that you're expecting
03:55 to continue or this is just a one-off according to you? Yes, I think as well
04:01 as we were discussing just a little while earlier, it is sort of surprising the kind of cuts that we are seeing today.
04:06 Largely because yes, there have been some sort of you can say mixed reviews on
04:12 you did have like Bank of Baroda and a couple of other banks sort of report a
04:17 weakish sort of growth. Again, I think from the FMCG path, the news flow wasn't that great and we are just starting early season.
04:26 So I think it's probably a combination of all these facts and the fact that
04:29 markets were at the level that they should be.
04:32 Sharmila, I'm going to just interrupt over here for a second. You just have the AMFI data which has come in wherein the net AUM as on
04:40 December 31st has crossed the 50 lakh crore mark and this is the big breaking
04:46 that we're picking up with regards to where the AMFI numbers go. This was
04:50 something that we've discussed earlier as well and overall if you go to see 50
04:54 trillion, that's the number that has been crossed so far. Overall if you see in
05:00 terms of the SIP contribution or the latest data as well, this was a
05:05 number that the street was eyeing a gum. So 50 lakh crore mark is what the AUM has
05:11 crossed in the month of December. We will try getting Alex as well to get us more
05:14 details on this but let me go back to Sharmila and let her
05:20 continue as well with the conversation on markets. Yes, Sharmila. So yes, I think
05:24 congratulations to all of us and it just sort of ties in very nicely with what I
05:29 was about to conclude with, that the fact that this market really is on, it's really a
05:35 domestic focus story and we are seeing the way participation is increasing in
05:39 equity as a product and that has really been what has sort of kept market at the
05:44 levels that it's at. So I think that any concerns that we may have, yes there will
05:49 be concerns and I think that again is a great sign if you're concerned about
05:51 what Outlook IT companies will give etc. But market will take all that in
05:58 its stride and you should use every opportunity that you see in the market
06:02 when it falls. Keep your buying list ready and continue to invest because
06:08 clearly I think that as this data points out, we are looking at better days ahead.
06:13 Looking at better days ahead but let me head across to my colleague Alex as well
06:18 who will be breaking this down for us pretty close. Alex, this was a number
06:22 that all of us were eyeing on the streets since quite some time and you
06:25 have the AUM which has now crossed the 50 lakh crore mark. What do you make of
06:29 this? Well it is significant, Hiral, but as we're speaking right now I'm still
06:34 waiting for the upload of the numbers that will break down all of the
06:38 individual categories. Of course that 50 lakh crore number was expected to come
06:43 through primarily because the underlying has gone up quite substantially and if
06:48 at all the numbers are going to be along the trend that we've seen in the second
06:52 half of 2023, then you will see that a lot of money has flowed into both the
06:58 mid-cap as well as the small cap end of the market and the equity AUM as a whole
07:02 which stood at close to 20 lakh crore at the end of November would have gone up
07:07 quite substantially as well. So a few more details are coming in. If you look
07:11 at the year-on-year growth, it has gone up from levels of what 39 odd lakh crore
07:16 all the way up to 50 lakh crore. So what a number that is and this is on the back
07:20 of very consistent flows into the mutual fund industry. The likes of what 50 plus
07:25 thousand crore flowing into just the actively managed mid-cap and small-cap
07:30 numbers. But I will toss it back to you for now while I try and get some of the
07:35 key details from the data release which I'm still waiting on, Hiral. Sure, thanks
07:40 Alex for getting us the details as well. So that's the number that we are eyeing
07:44 so far. Other details are yet awaited with regards to where the mutual fund
07:48 data goes. But let's head across to a couple of stocks that we have been
07:52 talking about. FMCG, that's a sector that is on everyone's radar and this is on
07:57 some bit of negative numbers that have come in as well with regards to where
08:01 the third quarter business updates go. Now among these you have names like
08:04 Marico, Godrej Consumers. My colleague Mahima joins us with more details on
08:09 this. Mahima, if you could take us through with regards to both of these
08:13 companies, what are the updates indicating and what are the
08:16 brokerages making out of it? Right Hiral, so as you rightly mentioned Marico and
08:20 Godrej Consumers are facing a downtrend today. Marico's business updates came in
08:27 where domestic volumes grew low single digits and international businesses also
08:32 in mid single digit and the consolidated revenue declined on low single digits
08:36 level. However, Marico has seen an uptick in their margins because of the
08:42 lower raw material prices. However, their revenue has remained
08:45 flattish. There were a couple of brokerage reports that came out on Marico. One was
08:50 Nomura on Marico which maintains neutral with a target price of Rs. 600 and
08:54 they're backing this on the reason that another quarter of weaker than expected
09:00 sales Marico has posted and they have also said that they still remain strong
09:06 in terms of expansion year on year, continue the softness in copra and
09:10 edible oil and crude derivative prices. Then we also had Citi on Marico which has
09:14 maintained a buy rating again for Marico and they've also mentioned that they
09:19 expect 2% overall decline in revenue. Then talking about Godrej Consumer, the
09:24 volumes growth in India were in double digit. The volumes growth in Indonesia
09:29 were close to double digit and for Africa, US and Middle East they saw a
09:34 single digit sales decline and in Latin America they saw a positive volume
09:39 growth. However, despite of all these volume growths, the sales growth has
09:42 remained muted and they continue to drive their year on year expansion in
09:48 EBITDA. They're trying to ramp up that. We also had a couple of brokerages report
09:52 on Godrej Consumers where Nomura said it maintains a buy rating with a
09:57 target price of 1 to 4.0 and believes that the stock price will likely see
10:01 more pressure in the near term. Then we had Noama on GCPL which said
10:06 that the EBITDA will grow around 11% versus initial expectation of 8% and
10:10 then we had Citi on GCPL which has reiterated its buy rating and still
10:15 continues, GCPL continues to remain the top pick in consumer staples and has
10:21 constructive view in the next 6 to 12 months. So despite of the downtrend in
10:26 their company updates, there are brokerages which are still bullish on
10:29 consumer stocks. Okay, thanks so much for that Mahima. Well, since we have
10:37 more updates with respect to the December Amphi data, we also have with us
10:41 Sunil Subramaniam, MD of Sundaram Asset Management who's joining us on the show.
10:45 Sunil, good afternoon and thanks so much for joining in. Your initial take of
10:50 course we're going and making benchmarks every week, every month. This is yet
10:54 another benchmark and this is from of course the mutual fund industry space.
10:58 Your initial reading and what can we expect going forward? I think this is a
11:04 fantastic milestone because it's a culmination of years of hard work by the
11:08 fund managers, by the customers, by distributors and growing this and our
11:13 journey is ultimately the 100 lakh crore mark, the 1 trillion mark and I think
11:18 that this will make sure that over the next 3 to 4 years we can expect to
11:22 reach that. This also comes at a time when our country's market cap has now
11:26 become the fifth largest in the world with a 3.8% share of the world market
11:31 cap. So, I think the stock market's growth along with the industries and this
11:35 growth, though the market grew 20% last year, it is also that about 60 companies
11:41 have come in through IPOs. So, it's an expanding market giving a larger
11:45 universe and I think ultimately the journey of making sure that the retail
11:49 customer finances the growth of the country through the capital markets. I
11:54 think mutual funds are playing a very important role in that and it's a very
11:57 important milestone which we need to celebrate. I'll get in my colleague Alex to get
12:02 into the conversation and you can perhaps give us more details on this one.
12:06 Alex, what do you have for us? Absolutely, Agam, so I'm looking at the fine print
12:10 here and we've got an outflow overall for the industry in the month of
12:15 December to the tune of 40,685 crore rupees and despite that you've seen the
12:21 total AUM on a net basis hit about 50.78 lakh crore rupees and the
12:28 reason for that is a significant inflow into equity mutual funds actively
12:32 managed during the month of close to 17,000 crore rupees. A bulk of that once
12:38 again flowing into the broader end of the market. So, the mid cap as well as the
12:42 small cap actively managed funds have gotten as much as 1,400 crore and
12:48 850 crore rupees worth of net inflows on a respective basis. You also have flows
12:55 of as much as 6,000 crore rupees into thematic funds during the month of
13:00 December. Now, large caps I must point out have seen a bit of an outflow 280 odd
13:06 crore rupees from actively managed large caps and this is more or less what we've
13:12 been seeing. So, Sunil, we've seen a few of these numbers come through and they've
13:16 been more or less you know carried through the trend that we've seen
13:21 through 2023 and that SIP number has come in at over 17,600 crore rupees.
13:27 What are you taking from that fine print? So, I'm taking that the retail customer I
13:34 think the new new age customer is now a willing to participate in the capital
13:39 markets because I have also noted that the folio count in small cap funds has
13:45 now overtaken large cap and mid cap and two years ago or maybe three years ago
13:50 they were at 50 lakh folios. Today, we have more than 1.3 crore folios in the
13:54 small cap. So, the new age customer, I think is willing to take a greater risk
14:00 that is apparent. The second is that the domestic economic growth story is
14:04 naturally played more through the small caps and the mid caps and hence people
14:08 have a natural affinity to putting that money in. The good news is that the SIP
14:13 it is coming largely through SIP numbers and I last count when I saw almost 30%
14:17 of the total SIP flows were coming into small and mid cap. So, people are entering
14:21 a high risk high reward segment of the market through gradual allocation and I
14:26 think of 500, 600 crore growth per month in the SIP book will mean that we will
14:30 soon hit 20,000 crores in SIP. What this also helps the fund managers to do is to
14:35 gradually keep buying these smaller mid caps, keep adding new companies to their
14:39 portfolio. So, I think overall I think it's a very healthy method of growth for
14:44 the industry and I think as long as the good times last, this will continue to
14:49 grow and I think with the December 3rd election result giving a good continuity
14:54 to the continence of the NDA government I think has also reinforced the strength
14:59 and the confidence in the equity markets which is also there seen in the FII.
15:02 Alright, we're also joined by Mr. D.P. Singh who is the joint CEO of the largest
15:09 mutual fund in India that's SBI Mutual Fund. Mr. Singh, thank you so much for
15:12 joining in. It's a big number and it's a big win for the industry as a whole but
15:17 most importantly I think the SIP figure that is now at a record high and that
15:22 50 lakh crore number for the net AUM for the industry stand out. What do you make
15:28 of these numbers and what you've seen from the ground in terms of the
15:31 participation beyond just the urban centers?
15:34 Yeah, first of all thank you very much for having me on the show and this is
15:39 definitely a very momentous moment for all of us to have a 50 lakh crores AUM
15:45 number. So this is definitely a milestone which the industry was looking at for
15:49 long time and see one thing is very clear that financialization of assets in
15:54 India is growing and growing very very fast and that's evident from the
16:00 SIP number 17,600 crore is not a small amount it's
16:06 basically more than two billion dollars with the average ticket size of
16:10 less than 25 dollars from international standard point of view. So this is
16:15 very very healthy. At the same we are very happy at the same time concerned
16:20 that people are taking more than required risk more and more money
16:23 flowing into small cap. My only concern is that people may not burn their fingers
16:30 over the period of time because we have seen three four cycles and once some set of
16:34 people run their fingers they don't come into the market for a decade. Though this
16:39 time is little different because most of the people who are investing they are
16:43 much more evolved than ever before. They understand the risk but at the same
16:48 time for the first timers coming into the highest risk category is something
16:54 which I think the outflow from the large caps and more and
17:01 more money coming into very small cap. I absolutely echo the views of my
17:05 colleague who spoke before me that's the good that we are getting good capital
17:10 for good companies in India but at the same time it has to be a balanced role
17:14 and we as an industry will definitely make sure that we are able to educate
17:19 the people by enlarging the country but very very happy for the numbers which
17:25 have come. Mr. Singh one last view on a category that seems to be growing very
17:29 quickly and that is a hybrid space possibly on account of the change in the
17:34 regulations or the tax norms at the start of this current financial year
17:38 15,000 crore inflow once again what do you make of that?
17:41 That's how it should be because even if the hybrid category you look at it
17:50 anybody who is putting more than any scheme which is putting more than 35%
17:53 still enjoying the benefit of debt taxation that is indexation at all so
18:00 that is the category which need to grow from the first timers that is what our
18:04 view is and we are trying to get because the idea is the industry has to grow
18:10 vertically as well as horizontally we need to get more and more number of
18:14 people. The growth in the numbers is not aligned with the increase in the number
18:19 of investors though folios are increasing, SIP numbers one may be having more than
18:24 two, three, four but the new number of people getting into the market I think
18:30 that pace is little slower we get to have we need to get more and more number
18:35 of investors into the industry mutual fund industry which is one of the
18:39 best wealth creating industry in the country. On that note Mr. Singh as well
18:44 as Sunil thank you so much for joining in and for giving us that perspective we
18:48 have to slip into a very very quick break but we're back on the other side
18:51 with a lot of stock specific action do stay tuned this is NDTV Profit.
18:57 you
18:59 you
19:01 you
19:03 you
19:05 you
19:07 you
19:09 you
19:11 you
19:13 you
19:15 you
19:17 you
19:19 you
19:21 you
19:23 you
19:25 you
19:27 you
19:29 you
19:32 you
19:34 you
19:36 you
19:38 you
19:40 you
19:42 you
19:44 you
19:46 you
19:48 you
19:50 you
19:52 you
19:54 you
19:56 you
19:58 you
20:00 you
20:02 you
20:04 you
20:07 you
20:09 you
20:11 you
20:13 you
20:15 you
20:17 you
20:19 you
20:21 you
20:23 you
20:25 you
20:27 you
20:29 you
20:31 you
20:33 you
20:35 you
20:37 you
20:40 you
20:42 you
20:44 you
20:46 you
20:48 you
20:50 you
20:52 you
20:54 you
20:56 you
20:58 you
21:00 you
21:02 you
21:04 you
21:06 you
21:08 you
21:10 you
21:12 you
21:15 you
21:17 you
21:19 you
21:21 you
21:23 you
21:33 you
21:43 you
21:45 welcome back we put the spotlight on oil marketing companies now at the
22:02 moment we are seeing a lot of strength in a whole host of these names IOC HPCL
22:07 BPCL all of them up and about and even though they have given up from days
22:11 highs well most of them are trending in the green as we speak reason two broken
22:16 notes coming in and these broken notes this time are not as much about the
22:21 price of oil or the price of crude as much as it's about these companies
22:25 themselves so right at the stop we have Morgan Stanley where they are talking
22:30 about infra upgrades from coming in from these companies which in fact could
22:35 add as much as four billion dollars to the EBITDA over the next three years and
22:40 moreover they're expecting an improvement in margins consequently because of these
22:46 infra updates coming through and of course India's interest in Venezuelan oil
22:50 imports will add to as much as 15% to earnings we also have JP Morgan which is
22:55 positive on the OMC space and they say that OMCs are unlikely to sustain profit
23:00 levels if the rate cuts happen they haven't come through yet but they are
23:05 positive because of inexpensive valuations when it comes to when it comes
23:10 to OMCs. Sharmila let's take this up with you what are your views on something
23:15 like a BPCL HPCL IOC and how would you how are you placed here?
23:19 Yes you know so while I completely agree with everything that you said you know
23:24 what was mentioned in the broken notes I just feel that you know in the Indian
23:30 context when you look at whether it's the oil marketing companies or you know
23:35 the downstream companies like NONGC the problem is that crude is such a sensitive
23:40 commodity that you know you're not really allowed to operate in that entirely
23:45 that environment where you're taking your own calls and your own decisions which
23:49 is why we see time and again for instance now people are thinking that since we're
23:53 going into an election year you could see some price cuts if the reverse were true
23:59 and if you had companies making a profit we've seen with for tax get in etc so
24:04 while I completely agree with you know with the argument that the enterprise
24:09 value valuations everything is absolutely in favor of these talks these this this
24:15 sector is something that I have sort of always cleared steer off I've just
24:20 cleared clear of this largely because I think that it's such a sensitive commodity
24:25 both oil and sugar that you know I'd rather not be an investor in it.
24:30 Right so that's with regards to where OMCs are concerned. Moving from there on
24:36 Sharmila another stock which is really buzzing in trade is with regards to where
24:40 Sula goes and this is one in terms of the PLI scheme for wine companies that has
24:46 been extended plus you have a lot of brokerage reports which have come in and
24:50 they have stated the target price on the Sula for example a CLSA what would you
24:54 recommend on a Sula 15% up move already still a buy?
24:59 Yes I think you know that's the ridiculous thing like to see a 15% upside
25:04 of the day at around 500 levels I do think it look good. You know my concern with
25:09 Sula is only this that very honestly you know the kind of projection that were
25:14 made that you know that wine drinkers are going to increase in this proportion
25:19 etc we haven't really seen that happen. Having said that I think the way they
25:23 position themselves you know the kind of products that they have etc I think that
25:27 all is absolutely on point. So I would be a buyer in this stock but probably at
25:33 lower levels. Right would be a buyer but at lower levels. Thank you Sharmila so
25:37 much for getting us your views on all the stocks that we've discussed but
25:40 completely out of time with that it's a wrap on this edition of Hot Money a buy
25:45 from Agam and myself. Lots more lined up on the other side please stay tuned to
25:49 LATV Profit.
25:50 [MUSIC PLAYING]