- #HDFCBank may sell assets to bring down costs
- U.S. markets end mixed but S&P 500 closes at record
- Cashless insurance claims at all hospitals
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
- U.S. markets end mixed but S&P 500 closes at record
- Cashless insurance claims at all hospitals
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
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01:08 Good morning and welcome.
01:10 This is NDTV Profit.
01:11 My name is Alex Matthew and you're watching All You Need To Know.
01:13 Like the name suggests, we set you up for the day with everything that you need to know so that you can stay ahead of the curve.
01:19 Let's start with the headlines.
01:21 The big exclusive story this morning, sources tell NDTV Profit that HDFC Bank may sell some assets in its loan book to release high cost borrowing.
01:32 It has also come to light that sell side analysts and hedge funds triggered the big sell off in HDFC Bank.
01:39 US markets end mixed but the S&P 500 ekes out a fourth record close in a row.
01:46 Overnight, of course, promising PMI data further cooled rate cut expectations and Netflix leads the NASDAQ rally on strong subscriber addition.
02:00 Bajaj Auto's net profit surges 37% and beats street expectations.
02:05 And meanwhile, Tata Steel returns to profit after reporting a huge loss in the previous quarter.
02:12 Zmove's ZNCLT seeks intervention to implement the merger with Sony.
02:18 And here's some good news from policy makers, for policy holders.
02:23 They can now get cashless treatment at any hospital. They just have to inform their insurance company.
02:30 Right now, the big story from NDTV Profit this morning, sources have told my colleague Vishwanath Nair that HDFC Bank may sell some of its assets on its loan book to release high cost borrowing.
02:46 That's because the lender is keen on bringing down the cost ratio on its balance sheet while also reducing the credit deposit ratio that has gotten a little skewed on account of the merger with HDFC.
02:58 The loans for sale will include those which do not qualify for priority sector lending tag.
03:05 Going forward, the bank will continue to originate high quality loans but will reserve the right to sell them through the securitization market, according to the source that spoke to Vishy.
03:16 It has also come to light that some sell-side analysts and hedge funds triggered the big sell-off in HDFC Bank.
03:23 Now, there's a lot more to this story. I'm just giving you a bit of a heads up.
03:27 We will be talking about this in a lot more detail in the show that starts at 8 o'clock. That's India Market Open.
03:33 Let's turn to international markets then. US stocks ended mixed overnight with the Dow dropping as much as a third of a percent and the S&P 500 eking out gains and closing at a fresh record.
03:44 This is the fourth session in a row, remember, that the S&P 500 is gaining ground and in fact setting a record.
03:51 The Nasdaq 100 also gained as much as half a percent and it was the mega cap tech companies that were leading the gains.
03:59 Yields also went up as the PMI data showed US business activity expanding in January by the most in seven months.
04:08 This was led by stronger orders growth that left services providers and manufacturers more confident about the demand outlook going forward.
04:17 The S&P Global Flash Composite Output Index advanced to 52.3 and that was aided by stronger services activity.
04:28 The Group's measure of expected output also climbed to the highest level since May 2022 and that was boosted by better domestic demand.
04:37 Asian markets are trading mixed as well. At least the early risers were the Nikkei 225 falling the most out of that lot.
04:46 But you have Shanghai that once again opened higher. Of course, what is playing out in the Chinese markets is the announcement of the measures to bolster the economy there.
04:57 To talk about some of the cues from overseas and how foreign investors are looking at India as things stand right now,
05:05 we've got Anindya Mitra who is the head of Asia Micro and Investment Strategy BNY Mellon Investment Management joining in from Singapore.
05:14 Anindya, thanks so much for taking the time. Good morning. What can you tell us about first what's playing out globally?
05:22 On the one hand, you have more interest in China because the Chinese government has finally stepped in and said that they will be supporting the economy.
05:30 With regard to India, seeing frenetic selling almost in the markets by foreign institutional investors, what cues are you looking at in the Asia region?
05:40 Great questions. Morning to our viewers.
05:43 The way we are looking at China is that the authorities in China have begun responding to what has been a bloodbath in that market since the beginning of this year.
05:53 A lot of this has to do with the economy really not doing very well.
05:58 Even though the government officials will tell you that the official growth target is being met at 5% or slightly over that threshold,
06:06 what businesses, what local governments are crying out for is the fact that nominal growth is well below 5%.
06:16 It's only running at about 4%. And the reason you have this gap is because of economy-wide deflation.
06:21 So now what the government is doing is it's responding to some of these – to the meltdown in the equity market since the beginning of the year.
06:30 But will it get inflation back going back up on an economy-wide basis or not is the key question.
06:37 We don't think that does the trick yet. But for what it's worth, the package of measures is broadening.
06:43 We did see a stabilization fund or at least talk of a stabilization fund come through over the last few days.
06:48 And then yesterday we saw a triple R cut of 50 basis points from the central bank.
06:54 So the reactive policy measures are coming together and it clearly takes out some downside risk from the market.
07:01 And we could even see a small bump. But at the end of the day, the fundamentals matter.
07:05 And that's where we are a bit more skeptical. Turning to India, if I may, is that okay?
07:10 Or would you have any follow-up questions?
07:13 Very curious about the foreign investor perspective on India because of the selling that we've seen.
07:19 7,000 crore in the market yesterday itself on a net basis.
07:24 Yeah, I don't have a good answer for the India outcome, to be very honest.
07:28 I mean, I think the fundamental story is still very robust.
07:31 We've been actually recommending neutral positioning on India, not because of anything being wrong with the fundamentals,
07:37 but the valuations are still quite rich. So we did see a good rally at the end of last year after the elections,
07:42 which clearly highlighted the odds of political and policy continuity being stronger than what many people would have thought possible.
07:53 And what we have seen since the beginning of this year may just be a bout of profit taking and sort of, you know,
07:59 and valuations are correcting a little bit, but they're still quite rich when you compare India with most other emerging markets,
08:06 with P/E ratio still in the low 20s area, which, you know, by historical measures as well is really quite rich.
08:12 Fair point. Thanks so much for putting all of that in perspective this morning for us, Aninda. Pleasure speaking with you.
08:20 All right, let's turn to the Indian equity markets and talk about the latest cues from the EFNO space.
08:24 You saw quite a bit of chop and churn in trade yesterday and you ended on a very positive note for the benchmark Nifty 50.
08:32 The question is, where do we go for the bank Nifty and a few of those heavyweights in that index?
08:37 And of course, today is also the monthly expiry to take into consideration.
08:43 If I'm not getting my Thursdays wrong, Agam is joining in to tell me just that. Am I right?
08:48 No, you're absolutely spot on, Alex. Well, it's going to be a very challenging day of trade with the kind of moves that we are already seen
08:57 over the course of the last seven or eight sessions. At the moment, sure, yesterday was again, well, a tricky one,
09:05 because while the Nifty did see an advance of around 1%, we also saw the bank Nifty have an extremely volatile day
09:13 and, you know, with its highs and lows coming in through. But I'm going to come to bank Nifty in just a bit.
09:18 Let's talk about the Nifty, because in that, in fact, did see a good amount of increase.
09:23 And even as we see an open interest decline here in the February futures, you start seeing a pickup as far as your rollovers are concerned,
09:31 which for the Nifty now stand at around 63-64 odd percent, which is, of course, a good thing,
09:38 because this also means that to a certain extent, well, at least some traders are carrying on longs going into the next series.
09:46 As far as the bank Nifty is concerned, and that's where it did become a little bit of a problem,
09:51 because we saw the bank Nifty advance in the first half of the day, gaining as much as 1% at one point in time,
09:59 eventually coming off completely and moving near day's lows in the red, eventually closing absolutely flat.
10:08 And that's where, once again, as far as the February futures go, we see a little bit of an increase there.
10:14 But this is where there is a little more uncertainty when it comes to the traders taking positions in here.
10:22 To talk about how things are panning out as far as the options market is concerned, remember, today is the monthly expiry.
10:28 So we are keeping an eye, at least as far as the Nifty is concerned, on the 217,000 level.
10:34 We're not going to talk about 22,000 at the moment because it's still a bit far away.
10:38 And actually all those who have written that particular call are laughing all the way to the bank.
10:44 But as far as several of the other levels are concerned, we are looking at still a lot of writing around 21,200, 21,300 puts.
10:53 Let's move on and talk about the bank Nifty then. And that's where the range becomes even broader.
10:59 Sure, on the higher end, we're keeping an eye on 45,500. That's the level that the bank Nifty could not surpass yesterday.
11:06 And that will be a big hurdle in today's trade. And of course, on the lower end, we continue to keep an eye on 45,000.
11:13 And I reckon that to a certain extent, we will see a lot of the bulls perhaps defend that mark.
11:19 Of course, this is as far as your Nifty and the bank Nifty go.
11:24 And Alex, it is going to be about the benchmarks today. And these are the levels that we're going to keep an eye on today.
11:30 Certainly. Thanks so much, Agam, for bringing us those details.
11:33 Of course, we will be watching for HDFC Bank and how it reacts in trade today as well.
11:37 It ended in the green yesterday. Let's see if that continues today.
11:41 Let's turn to earnings then. We're talking about Tata Steel because the company has returned to profit after quite a dismal second quarter.
11:50 But it's still fallen short of analyst expectations. Anushi is joining in to break those numbers down for you.
11:56 Morning, Anushi. What can you tell us about Tata Steel?
11:59 Morning, Alex. So quite a bit Tata Steel, quite the expectation of the company returning back to its profit with a large impairment
12:08 charge it had in the earlier quarter as well as the last year.
12:12 But however, it still remained to surpass its expectation of about 1600 crore of net profit.
12:21 Even if you look at the revenue, the revenue was also down by 3 percent against the street estimates of about 1 to 2 percent
12:28 of an increase in its revenue. So this was weighed down by the company's UK operations and the Netherlands operations,
12:35 which failed to gather the momentum. Now, if you look at the EBITDA, EBITDA was up about 54 percent at Rs 6200 crores.
12:44 Now, along with this, there was some margin expansion of about 423 bps to 11.32 percent.
12:50 It is to be noted that this was on the back of higher EBITDA per tonne realisation that the company had.
12:56 So the EBITDA per tonne increased about 110 percent to Rs 8035 compared to the Rs 3800 it had earlier.
13:05 Along with this, it was also supported by the increase in steel prices, which led to this increase in profitability.
13:11 However, now if you look at the production, India's production did see about a 7 percent uptick,
13:18 while the deliveries also increased about 3 percent.
13:21 But again, what remained as a monitorable was the UK operations, which failed to gather that momentum,
13:28 because of which the consolidated production was flat. Segment wise highlights again, India remained strong.
13:35 In other key updates, Tata Metallics has set Feb 6 as its record date for merger,
13:41 with 79 shares exchanged for every 10 shares held for Tata Metallics. So that should be noted.
13:48 Alright, thanks Anushi. Certainly want to watch out for Intrade today.
13:51 We have to slip into a very quick break. We've got more on the other side.
13:55 We leave you with some visuals of the pre-budget halwa ceremony,
13:59 which as you know is a tradition that goes back several, several years. Take a look.
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17:19 Welcome back. You're watching All You Need to Know.
17:25 Turning to a few stocks that you should watch out for on account of significant updates,
17:28 Harsh is here to break some of that down for you.
17:31 There's Piramal Enterprises to talk about, as well as the implications of a move by the government to have coal gasification go through.
17:38 And there's also Mazgon Docks. Harsh, what can you tell us?
17:42 Well, yes, Alex, let me start off in that order itself. You have Piramal Alternatives Trust,
17:48 which is part of Piramal Enterprises, which has purchased roughly 10.4% stake in Annapurna Finance.
17:55 The quantum that they've paid for that is 300 crore, valuing the company at 3000 plus crore.
18:01 Now, mind you, this is one of the top 10 largest MFI NBFCs in India, lending to microfinance institutions
18:09 and doing microfinance lending. And therefore, this will obviously augur well when it comes to Piramal Enterprises' lending business,
18:18 as well as the kind of reach that it gives. Because when you look at some of the numbers,
18:23 1,275 branches, 25 lakh customers across 20 states, the presence is good.
18:28 The three-year CAGR for AUM has been 29%, and it's got a sub 10,000 crore, just about 10,000 crore in terms of AUM.
18:36 So that's one positive on Piramal. Also, there was a block deal on it. So keep your eye out on that one.
18:41 Let me quickly move on to coal gasification. Now, the cabinet has approved a scheme for promotion of coal gasification projects
18:48 outlay of around 8,500 crore, set to benefit the likes of a Coal India, BHEL, and even the likes of a Gale.
18:55 Anything with the gasification theme in play. In fact, Coal India and Bale are going to invest around 11,700 crore.
19:02 Coal India Gale is set to invest around 13,000 crore on that one.
19:06 You also have Mazgon Dock and Focus, Defence Ministry acquiring or giving a contract of around 1,070 crore.
19:12 14 fast petrol vessels, 63 months of execution, currently having a revenue of 7,800 crore.
19:19 Not adding significantly, but nonetheless, it's a plus, Alex, that the Defence Ministry continues to churn out orders.
19:26 Absolutely. Thanks so much, Harsh, for bringing us those details.
19:29 Let's talk about earnings then. And we've got Bajaj Auto, which has posted quite a strong set of numbers,
19:35 led by an improved volume mix, seemingly, which has aided margins in the quarter gone by.
19:42 And perhaps we'll have to talk about the three wheelers. Let's see if I'm right.
19:47 Let's get Vinay on board to tell you why exactly Bajaj Auto has done well.
19:51 Vinay, morning. What can you tell us about the numbers?
19:53 Yeah, hi. So, you told it exactly. The three wheelers were the most important thing that came out for Bajaj Auto in the quarter ended December.
20:04 So, the profit rose 37% on strong domestic sales. The entire business was driven by domestic sales because exports are not doing that well for the company.
20:13 So, Bajaj Auto's two wheeler sales rose 22% in the quarter to 10.4 lakh units.
20:18 And if you look at the divide, the domestic sales increased 44%, while exports fell 3%.
20:24 And this was the same in the three wheeler business as well, where there was a great jump in the domestic sales, but exports fell sharply in double digits.
20:33 So, export recovery, the company is saying, is still going to take some time.
20:37 And if you look at the margins, they also expanded a little bit, the bigger scale of operations and increase in average selling prices led to this expansion in the operating margin of the company.
20:49 Understood. Alright. So, certainly one to watch out for on the positive side, Bajaj Auto looking good.
20:54 TVS Motor, let's talk about that as well. Here too, you've seen an expansion in margins, but then you've seen a decline in the three wheeler sales.
21:01 What can you tell us about what stood out with regard to TVS?
21:04 Beating all consensus estimates. As you said, the two wheeler sales were higher in the quarter, but the three wheeler sales fell.
21:15 So, this was because of the higher base and also because there were some issues with the exports as well for the company.
21:23 So, they couldn't do well on that front, but revenue rose 26% driven by entirely two wheeler business.
21:30 So, two wheeler sales has increased in the quarter and three wheeler sales fell 12% to 38,000 units.
21:36 So, margins also expanded to 11.2%. It can be credited to the lower input costs that have remained soft in this quarter.
21:45 Alright. Thanks so much for breaking that down for us, Vinay. The AutoPak is likely to be in focus at the start of trade today.
21:52 Let's talk about a few more earnings. We've got Chalet Hotels to talk about as well as DLF from the real estate pack,
21:58 which has been under pressure in the recent past and also Balkrishna Industries, the tyre maker.
22:03 They've all reported their third quarter numbers and Mahima is joining in to tell you the key details there.
22:08 Mahima, morning. What can you tell us?
22:10 Morning, Alex. As you rightly mentioned, Chalet Hotels is the first one on my list today.
22:14 Well, the results have been pretty good. The revenue is up 29%, EBITDA is up 46% and margins have improved from 39% to approximately 44%.
22:24 However, the net profit has been down by 31% and this is because of a one-off reason where they've provided for the reversal of interest,
22:33 provision of interest on cancellation of flats. They had a case going on where the order was given in this quarter
22:40 and they had to provide for this kind of interest of cancellation of flats and this is why that is the only reason why the net profit is down.
22:47 Then we had DLF where the revenue is up hardly 1.8%, EBITDA is up 7%, margins have improved a bit to 33% from 31% and net profit has been up 26%
22:58 and they've recorded a pre-sales of 13,316 crores in nine months of FY24, which is a good thing.
23:07 And then we have Balakrishna Industries where the revenue is up 5%, EBITDA has doubled.
23:12 The earnings for this company has been really well for quarter three. EBITDA has doubled, EBITDA margins have improved significantly to 23% from 12%
23:21 and net profit has also doubled. So, these were the three earnings in focus.
23:26 Absolutely. Let's see if the teams that are playing out continue to do so. Thanks so much Mahima for breaking that down for us.
23:33 Real Estate Pack, as I was pointing out, has been under a little bit of pressure in the recent past.
23:38 On the other hand, Balakrishna Tyres on account of its off-road tyres that it sells has done particularly well.
23:44 Let's talk about more earnings then and we've got SIAT from the tyre space to talk about as well as Loris Labs
23:51 and Varsha is here to break down those numbers for us. How are those numbers looking Varsha?
23:57 Good morning Alex. So, starting with SIAT. So, if you see revenue was up 8% but the important thing here is net profit was up over 5x.
24:05 Now, this is due to, this had actually, the company had beaten its estimates. Now, this is due to lower raw material cost.
24:12 And if you see replacement and international business reflected strong growth year on year basis.
24:16 And then we have Loris Labs where the third quarter profit declined missing analyst estimates.
24:22 If you see the consolidated net profit slumped almost 89% year on year and margins were 15% versus 26%.
24:28 Now, this was actually due to higher spends on growth prospects and also API business was down 9%.
24:35 All right. In fact, we will be joined by Satya Narayan Chhava who is the founder and chief executive officer of Loris Labs at 10 a.m. today.
24:49 So, you should stay tuned for that conversation. And as I pointed out earlier on the program,
24:53 we have got a lot to tell you about with regard to HDFC Bank.
24:57 That is source based information that my colleague Vishwanath Nair has picked up.
25:02 And we will also talk about the implications for the stock price which took a little bit of a breather yesterday from the selling and gained about 2%.
25:10 Does that continue? And well, we will tell you all about that in the next show which is India Market Open.
25:16 Do stay tuned. Lots more coming up as I pointed out. And this is NDTV Profit.
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