-#Parliament suspensions revoked
-#ImranKhan sentenced to 10-year jail
More top stories of the day on 'The Reporter.' #NDTVProfitLive
-#ImranKhan sentenced to 10-year jail
More top stories of the day on 'The Reporter.' #NDTVProfitLive
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TVTranscript
00:00 Hello and welcome. You're watching the reporter on NDTV Profit. I am Pallavi Nahata and as
00:07 always on this edition of the reporter, we bring to you market headlines along with national
00:13 and international newsmakers. But before we can move on with the show, let's see how the
00:19 markets have fared today. My colleague Harsh joins us with a quick market wrap. Harsh,
00:24 how did the markets fare today?
00:26 Well, after a strong day of gains yesterday, we saw a cool off, especially on the benchmarks.
00:32 There you go, 1% lower on the Nifty 50. We closed very close to the day's low 21,500,
00:37 not preached though. So that's one positive. Let's quickly look at the heat map and you'll
00:41 see a slew of names largely focused with regard to earnings. When you're looking at the likes
00:47 of Bajaj Finance, FinServ also down on the back of that. Reliance Industries after that
00:52 solid gain that it posted on Monday has declined around 2.8% today. ITC on the back of numbers
00:58 has come in weaker. You're also seeing the likes of an NTPC, Ultratech and Titan. So
01:02 Titan, ITC, a lot of FMCG also seeing some amount of brunt. Among the gainers, far and
01:08 few but BPCL, Tata Motors, Grasim were the only meaningful significant ones with posting
01:13 any gains at all. Let's also quickly look at the contributories on the Nifty and what
01:18 you'll quickly see there is the likes of Reliance was the key drag on markets today out of the
01:23 200 negative points, 60 contributed by Reliance. ITC, Bajaj Finance not very far behind and
01:29 L&T not very far apart from each other, 60 points contributed jointly by the three of
01:34 them and that dragged markets by around 120 points today. So those were the key contributories.
01:40 Let's also quickly look at what happened with regard to the advance decline. Advance decline
01:44 was strongly in favor of the advances for most part of the day. But the last half an
01:48 hour belonged to the declines. The mood as well as the entire setup switched over and
01:58 it went into the favor of the declines. Let's quickly look at broader markets and what we'll
02:02 see there is the mid cap also declined around a third of a percent or thereabouts. As that
02:06 mood switched, we did talk about advance decline, the breadth of the market got tougher and
02:10 we saw the small cap still cling on to some amount of gains around a tenth of a percent.
02:14 So both of them closed at the day's low. Last off, let's look at sectoral indices and what
02:19 we'll see there is Nifty FMCG is down 1%, but Nifty Energy stood out 1.7% down. But
02:25 mind you, that one was up 5% yesterday. So that decline may not have too many complaints.
02:31 With regard to some of the others, the Finnifty is also in focus around two thirds of a percent
02:35 lower. So all of that in focus, but the Nifty PSU Bank continues to lead the rally 1% higher.
02:40 In an otherwise very, very difficult market in trade today.
02:44 Now let's look at the big national story coming in ahead of the budget. The parliament has
02:50 revoked suspension of 11 Rajya Sabha MPs. For more details, we're joined by our colleague
02:56 Vasudha Venugopal. Over to you Vasudha.
02:59 After a stormy winter session, witnessed the suspension of several MPs, almost 146 MPs
03:07 for unruly behaviour and indiscipline in their conduct over the security breach that happened
03:13 in the parliament. Today, an important decision was announced by the Parliamentary Affairs
03:18 Minister Prahlad Joshi. He said that the Speaker and the Rajya Sabha Chairman have looked into
03:23 the matter in which 14 MPs were suspended and their matters were sent to the Privileges
03:30 Committee and all their suspensions have been revoked is what we hear. 11 of these MPs will
03:37 belong to Rajya Sabha and their matter was sent to the Privileges Committee of the Rajya
03:40 Sabha and that decision was taken today. As far as three MPs were concerned who belong
03:44 to the Lok Sabha, on January 12, a meeting was convened in which the Privileges Committee
03:50 had recommended that their suspensions be revoked as well and that decision is also
03:55 going to be likely very soon. So in all, the government has made it very clear that all
04:00 14 MPs whose matters of suspension had reached the Privileges Committee of the Parliament,
04:07 they will all be free to attend the Parliament from tomorrow. Remember, the budget session
04:10 starts from tomorrow and Nirmala Sitharaman is all set to present the interim budget of
04:16 the government and it will provide some glimpse into the direction in which the government
04:22 is thinking and the way the government has assessed the economy of the country right
04:26 now and of course the opposition has also set its agenda very straight. Today there
04:31 was an all-party meeting that was convened in which the opposition made it very clear
04:35 that they want to raise the alleged misuse of investigating agencies across the country
04:39 but the government has also made it very clear that they want a smooth functioning budget
04:45 session which ends on 9th of February and we are also told that we could expect some
04:50 announcements with regard to welfare of farmers. Well, moving on, another day and another update
04:58 on the Zee Sony merger. NCLT has agreed to hear Madman Films' plea on the Zee matter
05:04 in relation to the Sony merger. Now to tell us more about this, we have my colleague Charu
05:10 Singh joining in. Charu, what are you picking up on this? As we all know that the termination
05:16 of Zee Sony merger has been the talk of the town and now Madman Films Ventures which is
05:21 a shareholder of Zee has approached the NCLT to get the merger implemented and NCLT has
05:27 agreed to hear the plea and the next date of hearing is set to be March 12th. Now what
05:32 has happened in the court is that Sony submitted before the bench that the approval from the
05:38 NCLT that was received on August 23, 2023 is subject to certain conditions and can be
05:44 waived off in writing or can be fulfilled also. So basically it was not a hard and fast
05:49 approval. It does not necessarily have to be fulfilled. To this NCLT said that it's
05:54 the correct or adjudicating authority and it has the right to hear the matter and it
05:59 will be hearing the matter. Apart from this, the contentions made by Madman Films Ventures
06:04 which is a shareholder of Zee were that since the merger has already been approved, it is
06:13 only right that it is implemented now. Apart from this, Sony also said that Madman is nothing
06:17 but a proxy on behalf of Zee and all this. However, NCLT refused to address all these
06:22 contentions and has agreed to hear the plea on March 12, 2024.
06:27 Well, we'll continue to bring you updates on that. But moving on, Sundararaman Ramamurthy,
06:33 MD and CEO at BSE talks about the change in people's outlook towards BSE and the BSE's
06:41 positioning in the Indian market. For a slice of that conversation, listen in.
06:47 Cash market has been there for a long period and there at some point of time BSE had a
06:53 significant market share. Somewhere around Jan 2023 when we joined, we found that the
06:59 market share has deteriorated a lot and come to a single digit. It was hovering between
07:04 5 to 6% at that point of time. And in respect of derivatives, which is a two decades plus
07:09 market in India, BSE had never had a steady volume or steady growth in the derivatives
07:15 market. It was primarily led by LES, right, Liquidity
07:18 Enhancement Schemes. Correct. So, it was only Liquidity Enhancement
07:22 Scheme which was sustaining it to some levels and once it was very clear if the LES is withdrawn,
07:28 the structure may not stand the test of time. So, that was the situation in respect of these
07:34 two. In respect of currency, the futures were doing well and the options were not. Mutual
07:39 funds we were doing good. So, this is what we inherited in Jan 2023.
07:45 If you look at it, we tried to make some product changes in the cash market. There you cannot
07:51 create any unique position for yourself, which we can talk about later if you want. The most
07:57 important area where we felt that we can position ourselves and we can make a change, we thought
08:02 was derivatives, equity derivatives. So, in equity derivatives based on market feedback
08:08 we introduced or rather reintroduced two contracts with slightly modified product specification
08:14 and that looks to be working well. That is one reason why the market has shown greater
08:19 interest into BSE and it is working. The most important point there is the way we are positioning
08:27 ourselves is we are a complementary exchange and we are not competing with anybody.
08:34 Moving on, KPIT Tech has reported a positive set of Q3 numbers. The tech major kept its
08:39 FY24 guidance intact. Tushar Deep Singh joins in. Tushar, what were the key highlights of
08:46 the quarter for the company? So, KPIT again sort of an outlier in the IT
08:53 pack. Revenue was up 4.82% quarter on quarter. Margins were up about 60 basis points to about
09:00 9. Net profit is up nearly 11% at 156 crore. So, what we have to remember that the company
09:06 has in a way maintained its guidance at 37% for the full year ending March 31st, up from
09:13 30 to 32%. The EBITDA margin as what the company declared was at 20.6% in Q3. That is up again
09:21 60 basis points sequentially and in line with the expectations for the full year. So, essentially
09:26 the company is very bullish on its growth prospects for a year in which most of the
09:31 IT pack has declined. Other key highlights, revenues are 4.3% in
09:35 constant currency terms. EBITDA margin is 20.6% up. Deal wins stood at $189 million
09:43 and with a healthy pipeline. So, there is no pain there as what KPIT is seeing. About
09:49 600 freshers were hired. Again, very contrary to what the IT pack has done. There has been
09:55 actually a net headcount decline at IT services companies. Overall, the headcount has risen
10:00 to about 12,700 employees. Net cash balance is at about 829 crore, which is up 310 crore.
10:08 We mention this because the company has declared an interim dividend of Rs 2.1. In terms of
10:14 valuation, the company is still trading at about 75 to 80 times its price to earnings
10:19 multiple. Still a pricey stock though rest of the ER&D companies, the space where KPIT
10:27 functions are catching up specifically to other technologies given its bumper listing
10:31 that happened. Thanks a lot for that, Tushar. A good set
10:35 of numbers from KPIT Tech and the stock was up about 3.5% in today's trade. But moving
10:42 on, FMCG major Marico II reported over a 15% increase in its consolidated net profit aided
10:50 by packaged food segment. We spoke to the MD and CEO Shogata Gupta, who spoke about
10:56 the Q3 earnings and outlined the key factors that are expected to drive growth going forward.
11:03 Listen in. I think two things. First, obviously, you
11:07 are right that it has been low single digits for the third consecutive quarter. Having
11:12 said that, I think this quarter was slightly different in the sense that we took a significant
11:19 stock reduction in GT so that they become viable for core growth. And therefore, I think
11:24 if we had not taken that correction, that growth would have been 4%, which was slightly
11:29 better than last quarter. Now, I think two things. If you look at the
11:34 last couple of quarters, there was significant inflation, which led to consumers, especially
11:43 in rural, either down trading into smaller brands or titrating consumption. I think inflation
11:50 is largely tapering off. We are also seeing most of the players, including us, taking
11:56 pricing corrections. I think the government continues to invest significantly in the rural
12:04 segment. So we believe that going forward, especially from quarter one, next financial
12:11 year, rural volumes will definitely improve. We are seeing at least the first sign, especially
12:16 in our core brand parachute where offtakes have started picking up. And then when the
12:21 offtakes pick up, obviously it is followed by second to end primary.
12:25 As you know that because of the stress, a little bit of stress even in the trade, the
12:30 STRs, the stock holding at retail also had gone down by three to four days. That has
12:36 also led to some of the lower volume growth. But the offtake trends for the first time,
12:42 we are seeing reasonably encouraging offtake trends, which should translate into better
12:46 volume growth as we move into the next quarter. Well, now carrying on with the IPO fervor
12:54 that we saw last year, BLS e-Services IPO was fully subscribed within about 30 minutes
13:00 of opening today. Saloni Kothari joins us with an update on this. Saloni.
13:05 Yes, Palli, as you mentioned, the IPO was fully subscribed within hours of opening.
13:11 So clearly the demand is carried forward from 2023 that we saw in December and again in
13:16 January as well. So talking about who actually are the investors showing interest in the
13:22 IPO is of course retail investors who kind of contributed to all the IPOs as well. So
13:27 they have subscribed about 35 times, followed by non-institutional investors, which have
13:33 subscribed over 21 times as of 4 p.m. on day one. The IPO is open till Thursday, February
13:38 1 and the price, the issue is priced in the range of Rs. 129 to 135 apiece. Now this is
13:43 only a fresh issue of about Rs. 391 crores and the price to earnings ratio is about 60x,
13:49 which is similar to its peer, E-Mudra also, which is trading at about 56, 57x. And the
13:56 implied market cap at the upper price band is about Rs. 1200 crores. Now talking about
14:02 what exactly BLS e-Services do is it is digital services providers, which is involved in providing
14:09 banking correspondence services, e-government services and assisted e-services. So the business,
14:14 the asset-type business model that it has and how it has the cross-selling opportunities
14:19 is what has made analysts positive on the company and they have given, Anand Rathi for
14:24 that example has given subscribed rating to the issue for the long term and they see that
14:28 the issue is fairly priced in. So we will have to wait till Thursday and see the overall
14:32 subscription numbers as per how much demand it gets.
14:34 Thanks a lot for that Saloni. Now with that it's time to slip into a very short break,
14:43 but stay tuned because we have a lot more lined up on the other side for you.
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