Nifty Refuelled by Nitish Kumar's U-turn | All You Need To Know | NDTV Profit
- U.S. markets see sixth straight record close with #NASDAQ gaining over 1%
- What should you be looking for ahead of #DrReddy's Q3 result
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
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- What should you be looking for ahead of #DrReddy's Q3 result
All this and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive
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TVTranscript
00:00 Nifty refueled by Nitish's U-turn and the RIL rally, but attention now shifts to the
00:07 union budget and Fed meet outcome.
00:10 US markets see sixth straight record close.
00:14 The Nasdaq gains over 1% as Treasury yields fall.
00:18 Equities in the Asia-Pacific start off on a positive note.
00:21 ITC's net profit beats estimates but revenue growth slows.
00:26 Bajaj Finance meanwhile sees its net profit miss estimates as bad loans rise.
00:32 Bullish report on Adani Enterprises propels the group's stocks higher.
00:36 Canter sees an upside of 51%.
00:40 BSE will focus on getting institutions' algo trade back and to set up data center at BSE
00:49 to facilitate co-location.
00:50 It's going to be a busy three days for global markets.
00:59 Here in India we are looking forward to the union budget on Thursday.
01:02 But in the US, from today to Thursday, you'll have companies with a market value of over
01:08 $10 trillion posting their results.
01:11 There's the likes of Microsoft, Apple and Meta platforms in that list.
01:17 There's also the outcome of the Federal Reserve Open Market Committee's meeting on Wednesday.
01:23 In international markets, just to give you a flavor of what happened overnight, bond
01:28 yields have come off further in the US with the 10-year Treasury now below the 4.1% mark
01:33 and that's because the Treasury reduced its estimate for federal borrowing for the current
01:40 quarter and that was unexpected by dealers.
01:43 The Treasury Department said that it now estimates $760 billion in net borrowing for the January
01:50 to March quarter, down from the previous prediction of $816 billion that was released in October.
01:57 US stocks have gained and you have the Nasdaq in fact that gained over a percent, the Dow
02:03 gained about six-tenths of a percent and the S&P 500 closed about three-quarters of a percent
02:08 higher.
02:09 In the Asia-Pacific region, you have a positive start for the early rises, all three early
02:14 rises in fact trading positive.
02:17 But you have the Chinese markets that are under a little bit of pressure.
02:20 Of course, the property market there has been the talk of the town in the recent past, particularly
02:25 yesterday on account of the Evergrande update.
02:28 Shanghai trading with cuts of about half a percent and Hang Seng down as much as 1.5%
02:33 as we speak.
02:35 Now let's turn attention to the Indian equity markets and what a start it was for the trading
02:40 week and in fact to the new series.
02:42 Agam is here to take you through the latest cues from the F&O space.
02:47 Agam, stellar start, if you can, I mean that's the least that you can say about it.
02:52 What are the latest cues that you are taking from?
02:53 Well, a very encouraging start, Alex.
02:55 A lot of shots being covered and that of course always is a positive.
02:58 We saw the Nifty move up sharply, largely on account of the oil and gas space.
03:03 Of course, Reliance Industries and ONGC among the key contributors, the top contributors
03:08 for that near 2% up move for the underlying.
03:12 Even as we now start seeing positions being built as far as the index futures go with
03:17 a 1.4% added further towards fresh longs.
03:21 As far as the Bank Nifty is concerned, again that remains to be in focus.
03:24 Remember that we've seen a bout of short covering for HGSE Bank as well because of which we
03:29 saw a lot of short covering coming through for the Bank Nifty.
03:32 In fact, now once again comfortably above the mark of 45,000 and we see a lot of unwinding
03:39 which is again indicated by the decline in open interest as we speak.
03:44 But what about the options market?
03:45 Let's take a look at how things are panning out right now.
03:48 And yesterday a lot of players did take the opportunity to go ahead and sell the 21700
03:55 calls and puts to a certain extent of course taking advantage of the higher premiums that
04:01 we have seen the markets off late.
04:04 But that's when it comes to your overall open interest change.
04:09 Now just day before the range that we are playing for was 21,000 on the lower end and
04:14 21,500 on the higher end and that range has not only shifted higher and it is now 21,500
04:20 which becomes a sort of support and on the higher end we continue to see 22,000 as the
04:25 one with the maximum open interest providing some amount of resistance.
04:29 Moving on in terms of the Finn Nifty and that is of course going to be in focus today because
04:36 of the weekly options expiry we have the 20,500 mark which will provide the bulk of your resistance
04:42 on the higher end and of course lower end we have 20,300 to keep an eye on.
04:47 Let's move on and talk about stocks then and that's where we have seen shorts building
04:51 up in SBI cards on account of weak earnings coming through Metropolis and AU Small Finance
04:55 Bank that is the same and longs for Gale and Gold Disruptors and in terms of stocks which
05:00 are unwinding in trade we saw about a short covering across for Petro Net Energy, SBI
05:05 Life Federal Bank, Kotak Mandir Bank as well as Power Grid.
05:08 But today Alex we just may see a little bit of continuation of the strength that we saw
05:13 yesterday largely because of that massive up move that we have seen in Reliance Industries.
05:19 It's not every day you see such a large move on that particular company and there could
05:24 just be a little bit more following buying coming through today as well.
05:27 Absolutely.
05:28 Apparently the last time we saw this was COVID-19 and that was a one off.
05:31 Agam thanks so much for joining and giving us that perspective.
05:35 Let's see whether this rally has more legs.
05:37 We will of course be talking about this in more detail on the Editor's Cut and that you'll
05:42 find during India Market Open that starts at 8 am.
05:46 Let's talk about earnings then and ITC's net profit has increased 11% on a year on year
05:51 basis in the third quarter and it has beaten analyst expectations, consensus analyst expectations.
05:58 Let's talk about the fine print though.
06:00 Sesha is joining in to give you more perspective on that.
06:03 Morning Sesha, what can you tell us about the numbers?
06:06 Right, a sharp 30% year on year rise in other income and the 30% lower tax expense has led
06:14 to a significant beat on ITC's profitability despite a miss on the EBITDA front that was
06:20 lower 3% compared to the previous year.
06:24 Now revenues grew 1.6% due to lower than expected volumes and weak paperboard and agree sales.
06:32 Now margins too fell about 180 basis points to 36.5% missing estimates.
06:38 So which are the segments that did well?
06:42 So if we look at the ITC's cigarette business which is the mainstay business, the cigarette
06:48 business is seeing consolidation after several quarters of double digit growth.
06:54 Cigarette volumes is estimated to have declined 2% on a high base.
06:58 Premium cigarettes are doing well over mass brands aiding revenues which grew 3.6% in
07:04 Q3.
07:05 If we look at the FMCG X cigarettes, that segment grew 8%.
07:11 This is despite an industry wide slowdown in consumer demand with continued margin expansion
07:17 of 100 BPS to 11%.
07:20 Now the company did highlight that there was high competitive intensity from local and
07:25 regional players.
07:26 In certain categories, the raw material prices also remained deflationary year on year.
07:31 However, there was a sequential uptick in certain commodities including wheat, wheat
07:37 flour and sugar.
07:38 The hotel business of course they recorded a stellar performance despite a high base.
07:44 The revenues rose 18% and EBIT surge 57%.
07:49 So the growth was aided by a combination of factors like higher revenue per available
07:54 room and higher occupancies across properties driven by business travel, leisure and even
07:59 events like ICC cricket World Cup.
08:01 Now ITC has also given an important update here that the stock exchanges have given their
08:06 no objection to the demerger schemes for the hotel business.
08:10 Agri revenue declined 2.2% as the trade restrictions on wheat and rice impacted the business.
08:17 Paper segment revenue also declined 9.7% due to lower price, Chinese supplies subdued demand
08:25 and a fall in bulk prices.
08:28 So going forward, agri commodity inflation would be a key monitorable that the company
08:32 has highlighted.
08:34 And despite of that we will also be watching if there is any adverse tax you know regulation
08:43 in the budget that may come up.
08:45 Absolutely, thanks so much Sesha for joining in and giving us that perspective.
08:48 And of course watch out for volumes and rural demand as Sesha was just pointing out with
08:54 regard to the revenue growth for the quarter gone by.
08:57 Let's talk about NTPC then.
08:59 It's reported its third quarter numbers as well and the net profit and revenue, sorry
09:05 the net profit has risen by about 7% where the revenue has decreased.
09:08 There was also quite a substantial drop in the margins for the quarter.
09:12 Anushi is joining in to give you some perspective on that.
09:16 Anushi, what can you tell us about the fine print?
09:18 Right, so if you look at NTPC, a weak quarter for the business with the revenue declining
09:23 about 4% and the EBITDA seeing a drastic change over here.
09:27 EBITDA has declined about 21.5% with its margins falling to 26.5% compared to the 32.4% it
09:36 had reported last year.
09:37 This was on account of the cut in the revenue and also higher fuel costs.
09:41 So all three of these measures are lower than what the market was expecting.
09:45 When we come to the profits, the profits did see about a 7% increase.
09:50 But do note that this was on a back of last year's lower base due to higher deferrals.
09:55 So that acted as a 7% increase which led to the PAT rising above the expectations.
10:04 While this was on the subdued side of the performance, there are other performance highlights
10:09 also that the company came out with in which it has seen its installed capacity rising
10:14 about 4.2% while its gross generation was up about 14% due to the higher demand in the
10:21 festive season.
10:22 Subsequently, the energy sent out rose about 15% while the capacity, coal PLF, that is
10:29 the plant load factors, the capacity utilization increased to 76% compared to 69%.
10:35 So we have to see if this is going to impact the Q4 in a better sense compared to the weaker
10:41 Q3.
10:42 Apart from that, the company also has declared its second interim dividend of Rs. 2.25 per
10:48 share.
10:49 So this is all on NDPC that we should be watching out for.
10:51 All right.
10:52 Thanks so much, Anushi, for bringing us those details.
10:54 The stock has been in focus.
10:57 In fact, it gained over 3% yesterday and it is up close to 50% over the last six months.
11:03 Let's talk about the telecom space then and you have Tridata to talk about and seemingly
11:08 more of the same where you have one particular player losing significant ground and the other
11:14 two gaining.
11:15 We've got Smriti joining in to tell you about the latest there.
11:18 Smriti, more of the same as I was saying?
11:21 Yes.
11:22 Good morning, Alex.
11:23 You're right.
11:24 One player continues to lose.
11:25 However, the loss this time for Vodafone Idea has halved compared to the previous month.
11:31 So this is October's data.
11:33 And if you look at the numbers, it lost about 10.73 lakh wireless subscribers in November
11:39 as compared to 20.4 lakh in the previous month.
11:44 Now, there's no now this loss is kind of broad based as well.
11:48 They continue to lose in most of the states.
11:51 On the other hand, Bharti and Jio continue to gain ground.
11:55 As you mentioned, it added 17.47 lakh as compared to 3.52 lakh.
12:02 Now it looks like last month was kind of an exception for Bharti where the additions were
12:10 really low, but it has picked up again this month and is up five times compared to the
12:14 previous month.
12:15 If you talk about Jio, it added 34.4 lakh subscribers as compared to 31.5.
12:24 So pretty much the same there, only a 9% uptick, 9 or 10% uptick there.
12:29 If you look at the combined monthly connections for the month of November, then that was 3.8
12:37 times.
12:38 As I mentioned, last month seemed like an exception for the overall data and it grew
12:44 to 31.83 lakh this month, about 3.8 times higher.
12:48 All right, certainly stocks to track in trade today.
12:51 Thanks so much for bringing us those details, Priti.
12:54 We have to slip into a very quick break, but we've got stock specific information to give
12:58 you on the other side.
12:59 So do stay tuned.
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15:47 Welcome back.
15:48 This is Earnings, and all you need to know.
15:49 Let's continue to talk about earnings, and there are a slew of companies that have reported
15:54 their numbers.
15:55 Mahima is joining in to tell you about some of them.
15:58 Mahima, let's start with Piramal Enterprises, a significant net loss for the company during
16:03 the quarter.
16:04 Right, Alex.
16:05 As you rightly mentioned, they suffered a loss of approximately 2,300 crores, but this
16:09 is because of a one-time provisioning for their AIF investments and the provision of
16:14 3,540 crore of provision for AIF investment was made, and this is why they've recorded
16:23 a significant loss.
16:24 However, if you exclude that, their asset under management will be up 6% quarter on
16:30 quarter and 9% year on year.
16:32 So it's just the impact of AIF provisioning.
16:34 Second, we have Heritage Foods, where the profits has surged 96% on the back of very
16:40 strong daily demand in this quarter, and the average selling price of milk rose by 5.2%
16:47 year on year, which is why the revenues of this company has increased significantly.
16:53 Then we have Jayaprakash Power, where EBITDA has grown significantly on account of lower
16:58 raw material prices, and net profit and margins have improved on account of higher realizations
17:04 due to increase in power tariffs.
17:06 Then we have Venus Pipes, where it recorded the highest ever quarterly revenue, and the
17:10 volumes of seamless pipes witnessed a growth of more than 100%, and their welded pipes
17:15 witnessed a volume growth of more than 50%.
17:18 Also exports in Q3 FY24 was 35 crores versus that of 1.4 crores in Q3 FY23, so their exports
17:25 have also significantly increased.
17:27 So these are some of the stocks to watch out on the back of earnings which came post-market.
17:31 All right, thanks so much, Mahima, for bringing us those details.
17:35 Let's focus on a few more stocks that have sent out business updates, and in fact, there
17:40 are a few order wins to take into account, and you've seen how stocks have reacted to
17:43 those in the recent past.
17:45 Varsha is joining in to give you some of those.
17:47 Varsha, morning, what do you have on your list today?
17:50 Good morning, Alex.
17:51 So let's start with KEC International, where it has secured order of Rs. 1,300 crores,
17:57 and our order is for transmission and distribution projects and civil and cables orders.
18:01 If you see, order is for, like I said, the transmission and distribution projects, and
18:07 also the order intake stands at Rs. 13,000 crores.
18:11 Then we have Punjab National Bank, where it has approved raising of funds of almost Rs.
18:15 7,500 crores in FY25, and funds can be generated either via QIP or FP or in any other mode,
18:23 and shareholding of government remains above 52%.
18:26 Then we have Kresna Diagnostics, where it received contract from the Commissioner of
18:30 Healthcare Services in Maharashtra to provide MRI scan and CT scan services, and the contract
18:36 is received in 17 districts.
18:39 Then we have Somani Ceramics, where it commenced commercial production of its subsidiary company
18:43 Somani Max Private.
18:44 Now, company will produce large slab title of 4 million square meters per annum, and
18:50 the manufacturing facility has the potential to generate almost Rs. 250 crores of revenue.
18:55 Lastly, we have Suntech Realty, where company will develop projects of GDP of Rs. 3,000
19:01 crores, and project is situated at Nepensi and Bandra bandstand.
19:08 And if you see, company has doubled its GDP from Rs. 12,500 crores to Rs. 30,000 crores
19:14 in FY24.
19:15 Got it.
19:16 Thanks so much, Varsha, for giving us those details.
19:18 Let's focus in on a stock that has gained quite considerably over the last one year,
19:24 and that's Larsen & Toubro from the large cap space.
19:27 I was looking at the one-year chart, and it's up as much as 75%.
19:31 It was up 3.5% yesterday as well.
19:33 Now, it's going to be in focus because of its earnings today, and we've got Vikas joining
19:38 in to tell you what are the key aspects to focus on.
19:41 Vikas, good morning.
19:43 Beyond of course the headline numbers, what would you be looking for?
19:47 Yeah, right, Alex.
19:50 In this quarter, basically the earnings are likely to be mixed.
19:54 As far as their revenue and profit is concerned, what the analysts have or the consensus, analysts
19:59 estimates are, is that it's likely to go up.
20:02 But as far as the EBITDA and the margins are concerned, that is likely to kind of see a
20:09 subdued growth.
20:11 Now, this growth is likely to be led by better execution capabilities that the company has
20:17 exhibited in the last couple of quarters, especially after COVID, we see that there
20:23 has been improvement now going ahead and also the company expects that there will be recovery
20:29 as far as the margins are concerned going ahead.
20:33 The margins are impacted mostly because of legacy projects, low margin projects from
20:38 COVID period, which the company expects will get exhausted as far as FY25 or calendar year
20:45 FY25 is concerned.
20:47 By then they expect to reach the threshold.
20:50 As far as execution is concerned, they have been assured by strong order inflows from
20:56 not just India, but also international orders, which in the previous quarter was almost 56%
21:02 of the total order inflows that they got.
21:05 So that is contributing, especially from Middle East and Gulf countries, all these order,
21:10 these countries are looking at becoming net zero by 2050.
21:14 They all are doing this massive investments in green transition projects.
21:18 Got it.
21:19 All right.
21:20 The key monitorables.
21:21 No, so go ahead, go ahead.
21:22 The key monitorables.
21:23 The key monitorables would be the revenue guidance that the company had given us and
21:27 also the inflows, order inflows.
21:29 So they expect that by Q4, they expect to exceed this revenue guidance.
21:34 So it will be good to monitor how it has progressed and also the monetization of the Hyderabad
21:39 metro project.
21:40 Got it.
21:41 All right.
21:42 Thank you, Vikas, for breaking those down for us.
21:44 Order execution, as Vikas was pointing out, a key monitorable for Lassen and Toubro.
21:48 Of course, its order book continues to grow.
21:50 Let's talk about the pharma space and Dr. Reddy's laboratories is one to watch in trade
21:54 today.
21:55 It's going to be posting its third quarter numbers.
21:57 And we've got Monal with this report about the key elements to watch for.
22:01 Well, yes, after Cipla came out with its results last week, the stock has been seeing pressure.
22:07 Now, what's going to happen to the big names that are coming out with their results this
22:11 week is to be seen.
22:13 For now, we have Dr. Reddy's that's coming out with its results and the expectations.
22:17 Let's peg them versus the Bloomberg consensus.
22:21 So the Bloomberg consensus says that the patch is expected to be up around 6 percent versus
22:25 the same quarter last year at around 1300 odd crore rupees, revenue up 3 percent, EBITDA
22:30 up 2 percent.
22:32 And the margins are expected to come in slightly lower at 28.4 versus a 28.7 in the same quarter
22:39 last year.
22:40 Now, what are the key things that are to be watched out for in the commentary that could
22:43 make or break the stock reaction post the earnings?
22:47 Well, the first is the U.S. revenue growth.
22:51 The company has been talking about certain price erosion stability that it's been witnessing
22:56 in Q2.
22:57 So we need to see whether that's even better or further than that would be a positive.
23:01 Also, there's an element of rev limit.
23:03 So the base business growth is something that needs to be watched out for.
23:07 Then we have the update on the first ever biosimilar that Dr. Reddy's wishes to launch,
23:12 which is which is Zitoo Zimab.
23:14 And for that, it's Bachupalli facility underwent an inspection with nine observations.
23:20 Now, the company is yet to tell us whether it's obtained any clearance or when can we
23:24 expect a reinspection, what's happening on that facility, which would give some clarity
23:27 on the launch timelines.
23:30 Other than that, the India business is another key monitorable because the company had spoken
23:35 of a weak, acute season in Q2, which is usually the case.
23:39 So now the expected run up is is expected in Q3.
23:44 So we need to see whether that's played out the way the company has has expected it to.
23:49 Apart from that, margin guidance is something that we need to look out for, whether the
23:54 company is maintaining its margin guidance at 25 percent.
23:57 And what exactly is the new launch pipeline in the U.S. for the company?
24:01 Now, we need to understand here that for the past couple of quarters, analysts have been
24:05 raising concerns that Dr. Reddy's does not have any big launch in the U.S. and this could
24:11 potentially harm its revenues in the next two to three years because the growth prospects
24:16 seem numb.
24:17 But now, if the company were to announce any key product launch, then that would be a positive
24:21 for the company.
24:22 All right.
24:23 Turning away from earnings, if you're a trader in the Indian equity markets, then you've
24:28 probably seen headlines over the course of the last year or so, in fact, possibly even
24:33 beyond that, that they are contemplating an extension of the time that you can trade futures
24:40 and options.
24:41 Well, there was an update on that at a press conference just yesterday at the NSE.
24:47 SEBI chairperson Madhavi Puri Butch has spoke about the status check on that proposal.
24:52 Listen in to what she had to say.
24:56 There are very divergent views and diverse views right now, even amongst the broking
25:03 community.
25:04 And, of course, we have not yet reached the stage of asking the investors themselves what
25:09 they want.
25:10 So that's a different level of consultation and feedback that would be required.
25:15 But at the moment, my understanding is that the broking community itself is divided.
25:21 It's a divided house.
25:23 And there is a lot of discussion and deliberation going on and that they would be reaching some
25:29 conclusion one way or another in some reasonable timeline.
25:35 But according to us, that is the first stage, that what do the MIIs think is the first stage,
25:40 what do the brokers think is the second stage, what do the investors think is the third stage.
25:46 And we would need to take all of that into consideration.
25:48 All right.
25:49 And why don't you let us know what you think?
25:52 Why don't you send us a message on any one of our social media platforms to tell us whether
25:56 you would want an extended trading session?
25:59 That brings us to the end of this particular edition of All You Need to Know.
26:01 But up next is India Market Open.
26:03 And you would want to watch that before the start of trade.
26:05 Do stay tuned.
26:06 This is NDTV Profit.
26:07 Thank you.
26:23 Thank you.
26:51 Thank you.
27:19 Thank you.