- #Budget2024 to be announced today
- Global news flow & cues
- Stocks to watch, trade setup
Samina Nalwala, Niraj Shah and Tamanna Inamdar bring all this and more on 'India Market Open' ahead of #InterimBudget2024. #NDTVProfitLive
- Global news flow & cues
- Stocks to watch, trade setup
Samina Nalwala, Niraj Shah and Tamanna Inamdar bring all this and more on 'India Market Open' ahead of #InterimBudget2024. #NDTVProfitLive
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TVTranscript
00:00 dollar economy size.
00:02 [MUSIC]
00:04 For the growing population, growing youth,
00:07 young who need more skills,
00:09 who need to upgrade their skills,
00:12 you need the newer areas also to get priority.
00:15 [MUSIC]
00:25 [MUSIC]
00:42 Hello and welcome to India Market Open.
00:45 Good morning, Tamanna. Good morning, Neeraj.
00:47 No bigger day than this.
00:49 It is D-Day, finally.
00:51 Finally, finally indeed.
00:53 You know, it's a confluence of so many things.
00:55 Coincidentally, we've had the Fed meet come out.
00:57 Not as eventful, thankfully.
01:00 But post-Fed, ahead of budget,
01:03 which may not turn out to be as interim
01:05 as people may think it to be.
01:06 Never mind what PM Modi said yesterday, of course.
01:08 And the fact that it's a morning
01:11 which is so news-heavy
01:13 that you could have almost ignored that it's a budget day
01:15 and still had a very, very pacy action packed day.
01:18 I reckon budget will still take top of mind,
01:21 but you're right. As it should.
01:23 You're right, Neeraj Samina.
01:24 Morning, morning to everyone watching.
01:26 Fed outcome, we're going to cover that.
01:28 197 communications, what's happening to Paytm,
01:31 we'll be breaking that down for you.
01:33 It's the nifty expiry as well
01:35 and a whole host of data that is going to come out.
01:37 And it's still earnings as well.
01:39 Earnings, of course, in the background,
01:41 in the backdrop is going on.
01:42 So all of that happening, all of that here
01:45 on our special coverage on NDTV Profit.
01:47 So let's begin and very quickly take you through.
01:49 First, what has happened with the Fed?
01:52 Now, global markets got a bit of,
01:54 I would say cold water poured on all their hopes of a March cut.
01:58 So the Federal Reserve as expected did not do anything to the rates.
02:04 That was Tristan, that was largely expected.
02:07 But the whole question was,
02:08 is there going to be a clear indication of when the rate cut begins?
02:12 And over there, it was made very clear by Jerome Powell,
02:16 the Fed chair, that March is not the time when that will happen.
02:21 He said, I find it very unlikely that,
02:24 the committee members find it very unlikely that there will be a rate cut in March.
02:30 So that saw then US stocks close down lower,
02:34 not massively, but the Dow down nearly 300 points for sure.
02:39 There's a lot of nuance though, in what Jerome Powell has said,
02:43 and that's important as well.
02:44 Because while he made it clear that there is going to be no rate cut in March,
02:47 he did say that he sees a rate cut taking place at some point this year.
02:52 He also said that he believes interest rates have peaked in this tightening cycle.
02:57 So both of those positive things,
02:59 and you could see that reflect, I would say, in the bond markets.
03:02 The US 10-year though had already dipped below the 4% mark before the Fed statement came out,
03:07 but it managed to persist and stay there.
03:10 So a good view there on the US 10-year.
03:14 Quickly, let's check what Asia has done as well,
03:17 because that will give us a good idea of what the response has been.
03:21 I would say all in all, Fed not too negative at the end of it.
03:26 Everything priced in largely, and you're seeing that play out as well.
03:29 Asia mixed.
03:30 So maybe that then, Neeraj Samina, doesn't become the big factor this morning.
03:35 There's a lot more cooking back home.
03:37 Most certainly. In fact, COSPY is well and truly in the green
03:40 in addition to the Chinese markets looking iffy.
03:42 So that's the very interesting piece.
03:44 And I think we'll get in Jeff Dennis in moments from now
03:46 to try and understand what he thought,
03:48 because back in his UBS days, he used to track EMs so closely.
03:52 And therefore, his view on what this means for EMs like India
03:55 could also be very, very interesting,
03:57 considering that we have a budget coming up as well.
03:59 And the budget commentary would be important.
04:01 So let's try and get in Jeff Dennis in just moments from now.
04:04 But one is that, and two, that thankfully,
04:09 you know, Jarom Pal was not dismissive of the possibility of a rate cut.
04:13 Thankfully, without timelines, he wouldn't anyways let that slip.
04:16 But it didn't seem like from the commentary
04:18 that it's negated and relegated to the back end of the year.
04:21 It's still keeping the markets guessing, which is the important thing.
04:24 But I think, Neeraj, what might have made the markets a little disappointed is
04:28 I think everybody out was believing it's a Goldilocks era.
04:31 It's for risk assets, bonds.
04:34 The bond king, of course, stuck to his call of a recession this year,
04:38 and that was quoted by Jeffrey Gundlach.
04:40 I think he's a double-line capital CEO, very, very bearish at this stage.
04:45 And he also said that what investors may want to start doing in the U.S.
04:48 is pull out money from the U.S., sit on cash, and maybe look at emerging markets.
04:52 So while whatever is happening in the U.S.
04:55 potentially is negative emerging markets or negative risky assets,
04:58 the flip of it is the U.S. has run up already so much more.
05:01 So there is an opportunity, but--
05:03 And frankly, Samina, I mean, Jeff Gundlach says something you've got to hear, right?
05:07 He's as much a force to reckon with as any.
05:11 The only thing is he's kind of held his view now for the last six months.
05:15 But the ring in the tone of looking at EMs,
05:18 one more voice added to the chorus, and which is also very, very--
05:21 Just one last time, and I hope we have Jeff Dennis up now any second.
05:25 One last line that I would add from the Power World takeaway,
05:28 and then we'll be done with that leg of this morning,
05:31 is that he says don't expect consistent rate cuts after the first one.
05:36 It's not going to be a steady stream, which is also what the markets had priced it.
05:40 So we'll have to wait and see all of this and how it turns up.
05:44 But a lot happening domestically as well.
05:46 I think just before that, I think bonds also were all over the place yesterday.
05:50 So we saw a sharp fall. There was a little bit of recovery in day trading.
05:53 But finally went home with quite a cut on the US bond deal, of course.
05:57 So those are things you want to watch out for.
06:00 Very critical because this has been an event that has been driving global markets,
06:04 including emerging market equities like India, over the last couple of months.
06:09 Anticipation, hopes of this being a Goldilocks era
06:12 is what's kept equity markets and risk assets on top of things.
06:16 We're still waiting on Jeff Lewis.
06:18 Let's listen in to what Powell said.
06:20 On rate cut expectations.
06:23 It's not that we don't have any confidence.
06:25 We have growing confidence, but not to the point where we feel like
06:31 it's a highly consequential decision to start the process of dialing back on restriction.
06:37 And we want to get that right.
06:38 And we feel like the strong economy, strong labor market, inflation coming down,
06:41 it gives us the ability to do that.
06:43 We think that's the best way we can serve the public
06:46 because ultimately we've made a lot of progress on inflation.
06:51 We just want to make sure that we do get the job done in a sustainable way.
06:55 That's how we're thinking about it.
06:57 So that was Powell.
06:59 And that's a story that we'll see playing out for the next few days.
07:03 But I think we should quickly move to the trade setup as well
07:07 before we get to the big story this morning of $197.
07:10 And that's the big question here, Neeraj,
07:12 in a market which has so many factors to think about.
07:15 Do you look at stock-specific earnings?
07:17 Do you look at the sectors that are expecting CapEx flow?
07:20 Or do you look at $197?
07:22 No, so definitely look at $197.
07:24 And let's move on to India now.
07:26 Do we have Jeff Dennis?
07:28 Okay, so let's move on.
07:30 We'll get you the Jeff Dennis conversation on our social media handles later on.
07:33 Let's move on to India now.
07:35 So, you know, two things.
07:38 One, the markets in the last 48 hours have done unexpected moves
07:42 down in a big way the previous day,
07:45 up about a percent when nobody quite anticipated it in yesterday's session.
07:49 And while banks obviously have to play the pivotal role,
07:52 yesterday we saw other sectors come to the fore.
07:54 It's not normal for you to see autos and pharma moving together.
07:58 So very, very broad-based, the broad end of the spectrum,
08:01 the market breadth was very strong.
08:03 So I think in some sense, maybe call it because of what's happened in Bihar,
08:08 maybe call it in factor of policy country now being rewarded quite adequately
08:14 and therefore the pre-budget or the pre-FOMC fears being shrugged off.
08:18 But I think today, this morning, maybe on tenterhooks before the budget comes out,
08:23 maybe a small bit of pullback because of what the global markets are doing,
08:27 but largely stable.
08:28 That would probably be the verdict.
08:30 I don't think too many people will be taking trades any which ways
08:32 ahead of what Nirmala Sitharaman says
08:34 because her commentary on the glide path
08:37 as well as what is it that they do on CapEx would probably take center stage.
08:40 And if they manage both of those things well, predominantly,
08:44 then I think we are in fine fettle.
08:45 Just a quick check on implied gift nifty.
08:47 We haven't done that.
08:49 So let's take a look at what we are expecting or anticipating
08:52 in terms of today's market activity.
08:55 Flat start.
08:56 So no surprises there for guessing.
08:58 It is going to be a sideways sort of opening.
09:00 We are back to levels of what we were towards the end of last year.
09:03 So again, while we did recover, like Neeraj said, in yesterday's day of trade,
09:07 Jan has been a difficult month for the markets.
09:10 It has been lacking direction.
09:12 It has been lacking foreign outflows.
09:14 In fact, if I have to put it in perspective,
09:16 India saw the largest outflows from foreigners
09:19 as compared to other Asian markets in the month of Jan.
09:23 So there will be lots of moving parts,
09:25 but the big story, like we reiterated, is going to be budget.
09:29 It is an interim budget, vote of account.
09:31 You will have the full-fledged budget out in a few months from now,
09:34 but still lots and lots of focus on this event.
09:37 We have got Vishy.
09:38 There is a lot of focus on the stock this morning.
09:40 Vishy, it is a very news-heavy morning.
09:42 Last evening was 197 communication.
09:45 I think it is going to get a gap down.
09:47 The RBI has struck hard.
09:50 Yes, terrible evening for us as well as the PTI.
09:54 But essentially what the RBI has done is that
09:56 it has blocked any fresh deposits or top-up transactions
10:00 on PTI and payments bank accounts from the 29th of February.
10:04 That is essentially the gist of it all.
10:07 So customers who currently have balances in those accounts,
10:10 they can continue to spend money,
10:12 they can continue to withdraw their funds,
10:14 all of that is allowed, but fresh deposits, that is a problem.
10:17 And they can continue to top up until the 29th of February.
10:19 They can do it till the 29th of February.
10:21 But I guess nobody is going to do it if there is no continuity.
10:23 There is absolutely no point doing it
10:25 if there is a definitive one-month deadline.
10:27 What we picked up from our sources just this morning
10:30 is that this is in preparation for a cancellation of license
10:34 of the PTI and payments bank.
10:35 Now, payments banks came up about 10 years ago
10:39 as a way to bring in differentiated banking,
10:42 do better financial inclusion and all of that.
10:46 But now the RBI is looking at a potential revocation of license.
10:51 Now, of course, 29 days still exist
10:53 and the bank can go to the RBI for remedial measures.
10:56 All of those options are available.
10:58 Paytm itself has said last night
11:01 that they are moving a lot of their payments businesses
11:03 to other banks because the payments bank is under restrictions.
11:06 So, we will shift our business elsewhere.
11:08 Only problem is then they don't get a share
11:10 of the earnings from those payments.
11:12 It goes to whoever is providing those services.
11:15 So, that becomes an issue.
11:16 But at this point in time, what we understand is that
11:18 the RBI may have considered a sort of a staggered move
11:23 primarily because you don't want the ecosystem
11:25 to get too disbalanced.
11:27 So, you want to take it slow and see what the impact is
11:30 and then maybe take a final action.
11:32 I have a very basic question, Vishen.
11:34 Of course, big exclusive there.
11:35 I don't want it to get lost in this conversation
11:37 that this is just step one to cancelling the license
11:40 of the payments bank.
11:41 So, that's going to be big negative in any case for 197.
11:45 What have they done wrong?
11:47 Because that's not very clear in the RBI's language.
11:50 Yes, it's not.
11:51 They say supervisory issues, etc., etc.
11:53 But if you can explain, what has 197
11:56 or what has this payments bank done wrong?
11:58 The genesis of this problem comes from March 2022.
12:01 That's a little over 20 odd months.
12:03 22 months.
12:04 Yes, 22 months ago, the RBI found that there were issues
12:08 with how KYC was being done and how data storage
12:11 was being done at the payments bank.
12:14 So, essentially, the payments bank being a RBI regulated entity
12:18 is supposed to have a bit of a Chinese wall with the parent.
12:21 The RBI did find that the Chinese wall was not being maintained.
12:24 The integrity of that was not being maintained
12:26 through and throughout.
12:27 Now, this is all based on what sources are telling us.
12:29 The company itself, Paytm, as well as the payments bank,
12:32 both have completely denied these pointers.
12:34 But what we understand from sources is that
12:36 these were issues that the RBI found.
12:38 The RBI in 2022 stopped onboarding of new customers
12:42 and said, "Go ahead and fix these problems,
12:44 and then we'll talk about bringing new customers in."
12:46 Nearly two years later, the RBI has conducted its system audit.
12:50 It's conducted an external verification of that system audit as well.
12:54 So, it's not like the RBI is saying it out of their own free will.
12:57 This is an external entity which is saying that these problems are real.
13:00 And the RBI is saying, "If in 22 months you can't fix it,
13:02 well, now you need to face the music."
13:04 That's what's happening here.
13:05 So, Vishy, let's put this in perspective with numbers.
13:10 The expectation, or there are notes, which the last day,
13:13 the night release said that even without this exclusive
13:16 that we've broken, it's a cost of 300 to 500 crores
13:19 on the EBITDA level, which is circa 30% of FY25 adjusted EBITDA.
13:24 Correct.
13:25 So, that's the cost that is incurred.
13:26 And we are only talking about the numbers cost.
13:28 What happens to customer sentiment, what happens to other partners,
13:32 whether staying or no, that has still not been
13:35 and maybe cannot be factored in.
13:37 So, this is, aside of the fact that Paytm will go out and try and resolve,
13:42 on an immediate basis, there is a large hit, not just to sentiment,
13:46 but to actual costs moving up for Paytm.
13:48 That's right. So, payments as a business is very big for Paytm.
13:52 I mean, it's there in the name.
13:53 So, you're going to get a hit on that because there's going to be
13:58 a reputational hit, because there's going to be a sentimental hit on the entity.
14:01 If the RBI is coming down hard on a Paytm entity,
14:04 then partners who work with Paytm, and what Paytm is saying
14:08 that we will move to third-party banks for payments businesses,
14:11 all of them will sort of rethink their deals with Paytm.
14:15 They will probably want to be safe in such a situation.
14:18 So, that is going to be an issue.
14:21 Timing is also a problem because just last month, after the RBI's unsecured lending guidelines,
14:27 Paytm, which was a big player in the sub-50,000 market,
14:30 and the BNPL market had to cut down on businesses.
14:33 So, there again, they have said that there's going to be a business impact.
14:36 So, lending, which was their big profit center,
14:39 and then payments, which was their big operational center,
14:41 both are being hit at this point in time.
14:43 So, Vishy, just to understand this going ahead from the 29th of Feb,
14:48 your UPI app still exists.
14:50 Yes.
14:51 But they don't make any money off it because it's literally like having access HDFC,
14:55 the Kotak banking app, and that's pretty much the business that will stay.
14:58 If we have to try and break this down, if they're not going to make any money,
15:03 Neeraj has already talked about the hit on Ebitda,
15:05 what happens to the parent company now?
15:08 That's what the parent company needs to figure out.
15:10 The parent company on its part has said that we will move to other banks,
15:13 we will ensure that our services are restored.
15:16 On the side, the payments bank itself is working with the RBI on compliance.
15:20 All of those things are being worked out,
15:22 but we will only get a clearer picture at the end of this month.
15:25 So, when the March quarter results roll in, that's when you need to watch out.
15:29 Just one last thing for viewers, the Fastag bit we need to mention,
15:34 because Paytm has a big share there, 17%.
15:36 So, if your Fastag balance is done, can you reload it?
15:39 Are you in trouble?
15:40 You can reload it till the 29th of February.
15:42 And you can use it for the next couple of months.
15:44 If you reload it before the 29th of February, then that money…
15:46 But why would anyone do that, right?
15:47 The money is not in danger, right?
15:48 Money is not in danger.
15:49 For users, money is not in danger.
15:50 Okay.
15:51 No problem. Perfect.
15:52 So, that was important.
15:53 Thank you so much, Vishy, for coming in and giving us all of that perspective.
15:56 And the exclusive.
15:57 And the exclusive.
15:58 But there's a lot of stocks to watch for.
16:00 Yeah, there are lots of earnings reactions as well.
16:02 So, a stellar set of numbers.
16:04 So, while – okay, just a quick one.
16:06 Rs.197, we could bet on this one.
16:09 The stock is going to see a massive gap down.
16:11 The street is concerned.
16:12 Brokerages as well are very concerned about what this is going to do to the stock.
16:17 The company will open with a massive gap down and we'll be watching out for that.
16:21 Beyond that, few earnings reactions.
16:24 We've got Shree Cement, exceptionally good set of earnings being posted by Shree Cement.
16:28 Revenues are up over 20% at Rs.5,223 crores.
16:33 Equita is up nearly 74% to come in at Rs.1,264 crores.
16:38 Margins have seen a huge expansion of about 729 basis points to come in at 24.2%.
16:45 And net profit has also seen – has come in at a massive jump, 700 odd crores versus
16:51 281 crores that the bank had posted.
16:54 Company, of course, is on record growth path.
16:57 Expansion plans are on board.
16:59 They've also indicated that the strong volume growth is on path.
17:03 And I know Neeraj is looking at me.
17:05 Shree Cement is a stock that we've talked about.
17:07 Strong reaction.
17:09 Why don't you come in and tell us your thoughts?
17:10 No, no, no.
17:11 I don't have thoughts.
17:12 Just two things.
17:13 One, the Citi note said that the discount between Ultratech and Shree, which is spoken about,
17:17 has narrowed a bit.
17:18 And therefore, there is this income tax angle to Shree.
17:22 So that is to be watched out for.
17:23 But Samina, just carrying the blowout numbers and just coupling that up with Ambuja,
17:28 simply because while Ambuja went off yesterday, down yesterday, in the guidance that they have said,
17:33 they've said that they will go to a bit up a ton of 1400 very shortly.
17:38 Citi has raised the price target today as well.
17:40 So cement remains very strong.
17:42 Now it's just joining your enthusiasm, I must say.
17:44 And the budget.
17:45 Exactly.
17:46 So there is so much working with Shree Cement this morning.
17:48 Not cement at large.
17:49 If you were making a budget list, cement would be on top of it.
17:52 And also, you tie that in with strong earnings, brokerage upgrades.
17:57 Even the management, I think, after a very long time is sounding so confident.
18:00 And I think that's what you're really going to be taking heart from.
18:03 They've said that they're executing a comprehensive performance improvement plan
18:07 and are experiencing a positive impact.
18:09 Strong volume growth along with building premium products through accelerated channel expansion
18:14 and softening of fuel prices is what's actually helped Shree Cement.
18:17 So watch out for this one.
18:19 It will see a good start in today's day of trade.
18:22 Also, like you said, ahead of budget, counters like Shree Cement are usually quite active in trade.
18:28 Well, let's move on to the other one that also could be active in trade for more reasons than one,
18:33 one being earnings, the other being budget, is IRP Infra.
18:36 Again, the stock has been very active.
18:39 So if you take a look at what it's done in the last one week of trade,
18:42 we've seen a very sharp up move on IRP Infra, the reason being it made headlines on Monday
18:47 as the company's private infrastructure investment trust, which is its invit,
18:51 won an arbitration claim against the National Highways Authorities of India.
18:55 They've been compensated 720 crore rupees.
18:59 So it's a huge win coming for IRP Infra.
19:02 That explained the big sharp move that we saw on the stock.
19:05 Today we see the stock in focus on back of earnings.
19:08 That, of course, is the one-month performance of the counter.
19:12 In terms of earnings, revenues are up 30 percent to come in 1968 crores.
19:16 EBITDA is up nearly 17 percent at 870 crores.
19:20 Margins, though, are down quite sharply.
19:22 So could be viewed as a mixed bag because margins are lower.
19:26 What we understand is the cost, input cost has actually risen quite sharply
19:30 and that's what's impacted IRP Infra.
19:32 In terms of top line, numbers look phenomenal.
19:36 It is a little bit of pressure coming in from input cost that has impacted its margin picture.
19:42 And on back of that, net profit as well.
19:45 Net profit actually has come in about 30-odd percent higher at 188 crores.
19:49 So all in all, I'd imagine IRP and Sri Cement should get a thumbs up in early trade this morning.
19:54 197, you've said it enough number of times, we'll be getting a thumbs down.
19:57 But more earnings on the radar, Tamana.
19:59 Yes, we can't discount the fact that earnings have been the big driver in these markets
20:04 for the last few weeks as they should be.
20:07 But I'm going to start with a non-earning sector that you should watch out for and that is autos.
20:12 I don't think too much of a budget play there.
20:15 Maybe if there is a push for EVs, some may react.
20:19 But yes, you're going to have sales numbers here and passenger vehicle numbers are expected to grow
20:25 upwards of 20% year on year.
20:28 Two-wheelers will be relatively sluggish but an uptick is continuing.
20:33 So you could continue to see single-digit growth.
20:35 There are a couple of notes out in the expectations and Bajaj Auto may not have
20:40 as good a year on year growth as its peers.
20:43 So that is one list that you should keep on your radar.
20:47 In terms of numbers, Goldrich Consumer Products and relatively looking at what's happening
20:52 in the FMCG space, good numbers.
20:55 It's a beat on EBITDA, beat on net profit, beat on margins.
20:59 Those numbers will be on your screen of what the revenue in EBITDA was.
21:03 But what is really working is a change in strategy.
21:07 For example, they've put out one of the cheapest liquid detergents in the south.
21:12 That is working.
21:14 They're anti-repellent in the form of agarbattis.
21:17 All these strategic moves and the new management strategies seem to be falling in place.
21:21 I would keep that on my list.
21:23 Westlife is another one.
21:25 Now, this is a disappointing set of numbers.
21:28 No two ways about it.
21:29 It's missed estimates on most counts.
21:32 Same store growth has slid to minus 9%.
21:35 Revenues are down below estimates.
21:37 EBITDA is down 10%.
21:39 Margins are also down about 138 bps as are net profits.
21:43 So a couple of things have happened here.
21:45 Westlife has a lot of stores in Chennai in the southern part of the country where there were floods.
21:50 So a flood hit has taken place.
21:53 They need to rework, I suppose, some of their strategies and their lower cost menu.
21:58 So it would be interesting to hear what the management has said.
22:00 It's also talking a bit about your discretionary spend hit.
22:04 So a bit of a stuck or difficult place at Westlife.
22:09 We saw that in Jubilant as well.
22:11 So those are some that I would watch out for.
22:13 Exactly, Jubilant and Westlife, both showing those chinks in the armor.
22:16 So a larger trend there.
22:17 Yeah, very lucky.
22:18 But just 9% SSSG growth downtick is terrible.
22:22 Now, two or three other ones, and I'm sure we have more, but Dixon stands out.
22:27 Revenues 100% uptick at about 4818 crores, so higher than the Bloomberg estimate.
22:34 The margins came off, but relative to estimates, they were still higher.
22:39 And keep in mind, for Dixon, margins may vary a little bit here and there,
22:42 but largely managed at 3.5% to 4.5% band.
22:45 The margins don't go above that and don't largely come below that.
22:48 Pag, therefore, a healthy 87% growth.
22:50 You could argue lower than 103 crores estimate, but largely in line.
22:56 The point is management refrained from providing revenue guidance, so that was one thing.
23:00 And they have said that they are looking to vertically integrate with PCBA for industrial products,
23:04 which can aid margins.
23:06 Now, let's wait and watch what happens.
23:08 This whole mobile components duty piece as well impacted Dixon yesterday.
23:14 Let's see if there is more in store today, so watch out for this.
23:17 The one that impressed me a lot was Mankind Pharma, not because of the reported numbers.
23:21 So, I'll take you through that. Revenues up 24%, EBITDA up 38%, which is fine.
23:26 Margins, 23.26 versus 20.9. The estimates were 24.9.
23:32 So, margins have actually been lower, but on Pag, they've been higher.
23:35 But two things that stood out on Mankind Pharma.
23:37 One, the export piece. Exports went up 118% YOY to 207 crores.
23:44 This is big for Mankind because they've gone into it recently.
23:47 And it's a free cash flow generating machines, it seems,
23:50 because look at the balance sheet cash. It doubled since March 2023 to 2756 crores.
23:58 So, really strong show put up by Mankind Pharma. So, watch out for that one.
24:02 And then, Ajanta, JSPL and Divgi, those stand out.
24:06 Maybe we'll talk about them in detail. Tamannaah or Samina might have details there.
24:09 But Ajanta, margins expanded, PAT went up.
24:12 JSPL, margins expanded meaningfully.
24:16 And Divgi, it's a very expensive stock, recent listing, but it's won a 212 crore order.
24:21 And it's important because it's coming from North American manufacturers of automotive transmissions,
24:25 which is big market for Divgi. So, therefore, you might see this stock react a bit.
24:28 And I think, Ajanta, those numbers are also fantastic.
24:31 Margin expansion is mind-boggling. Every market of theirs has grown.
24:35 Ibita is up 85% YOY. So, they've come in at 314 crores with a margin expansion of 1000 bps at 28.4% for the quarter.
24:45 So, Ajanta could be blowing out in early trade.
24:48 Smaller company, but worth a mention is Thomas Cook as well.
24:51 The reason I mention this is because we've seen the excitement, and you saw this with Ayodhya a few weeks ago,
24:57 and the push for tourism that we've seen all through last quarter.
25:00 Again, could be an important talking point from a budget angle too.
25:04 The stock will be in focus. Numbers reflect exactly what the industry has been excited about.
25:10 A quick word on that, Thomas Cook has registered a 241% growth year-on-year to report a profit of 90 crores,
25:18 driven largely by income. Revenue from operations have also grown 24% compared to the last fiscal.
25:25 Another quick one, I did come across some of these reports on Indus Tower.
25:29 Now, of course, we'll find out more as we go along the day.
25:32 KKR and CPP are likely to sell 3,800 crores in the tower infrastructure company.
25:37 Again, this one's been in focus for the last couple of months now.
25:40 The stock is up 25% in the last three months. Took a big hit in trade yesterday.
25:44 Could expect a block deal of sorts on Indus Tower, so watch out for that too.
25:48 Just on the margins piece, three stocks which stand out today aside of Shree, one is Ajanta, as Samina stated.
25:54 Blowout margins, JSPL, extremely strong margins. And data patterns, by the way, guys.
26:00 Good numbers, good profit, but margins just 96 basis points higher, but at 43%,
26:05 this is the highest margin in the last seven quarters, and the margins have trended higher for each of those last seven.
26:11 So data patterns seemingly doing something well. It's an expensive stock, but could be an interesting one to watch out for.
26:17 Absolutely. But, you know, these are the stocks in you, so to speak, which have an immediate impact.
26:23 Post 12 or so, the focus will move to impact of companies based on budget announcements.
26:30 We know it's a vote on account, but directionally, there will be a clear push on whether the government is continuing with its CapEx and in what direction.
26:39 After the break, we're going to talk about the F&O markets, what to expect,
26:43 but we're also going to be bringing you ahead in the show a list of sectors and the top stocks in those sectors
26:50 that you should watch out for that are likely to be impacted by the budget. Stay tuned.
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29:55 Welcome back. You're watching India Market Open.
30:00 It's all eyes as we run down to the budget in a few hours.
30:03 It is the day and the markets will be very closely watching out the Finance Minister as she rules.
30:08 Of course, how the year gone by has been and of course, talks about what lies ahead for India.
30:14 Well, beyond that, the first few hours of the market will be driven by earnings and maybe sideways move as well.
30:20 But Agam is standing by with more on that. Agam, yesterday's rally came pretty much out of nowhere.
30:26 It wasn't very expected on the cards. People were expecting to remain volatile.
30:30 But broad-based sectors across the board participated. What does that mean?
30:35 Yes. So, two big takeaways. The banking stocks are back in action.
30:39 A lot of the strength on account of HDFC Bank, ICICI Bank and Axis Bank.
30:44 And secondly, mid-cap and small-cap indices were going from strength to strength.
30:48 But that has in fact also led to benchmarks moving higher.
30:53 So, the Nifty has come and seen in fact another 1% up move.
30:58 But on the whole, we really haven't seen too much traction as far as your change in open interest goes in index futures.
31:05 Why? Because I reckon to a certain extent, traders would want to wait before they take and well, place bets as far as your futures are concerned.
31:15 It's not very different for the Bank Nifty either. In fact, for the Bank Nifty, we've seen unwinding of positions to the tune of really 6%
31:22 even as the index moves higher by around 1.4%.
31:25 And this move particularly perhaps was something that took a lot of traders out of with surprise.
31:33 And we were nearly at 4,600. Of course, we tested 4,600 and then we came off to a certain extent.
31:39 Let's move on and talk about how things are stacking up as far as your option universe is concerned.
31:43 It was a, well, at least based on the kind of cues that we're seeing in terms of change in open interest on the Nifty options.
31:49 It's been fairly all over the place to say the least.
31:54 But Nifty at 2,700, 2,700, 2,800. That's where we're seeing a lot more traction in terms of calls as well as puts.
32:02 Remember, this potentially doesn't necessarily mean that all these calls and puts have been written because we are moving into a large event.
32:12 And where does that keep the Nifty in terms of your open interest?
32:16 Well, we're still looking at a 500-point range, which could in fact change because it continues to change on a day-to-day basis.
32:24 But based on Max OY, keep an eye on 22,000 on the higher end and 21,500 on the lower end.
32:32 What is really interesting is that the budget also falls on the day when you have the Nifty weekly options expiry.
32:38 So you can't really rule out any choppiness going into today's day of trade.
32:42 Starting and coming down to stocks then, well, we do have a bout of longs for Dr. Reddy's, Max Financial and Coromandel International.
32:50 A lot of your Agri Chem stocks perhaps will be in focus today as well on account of the budget.
32:55 And shorts in Pedal Light and Cholamundlum Finance.
32:58 In terms of stocks, we saw a short covering, a lot of that coming through for Exide Federal Bank, M&M Financial Services, PNB and AU Small Finance Bank.
33:08 No prizes for guessing. The financial sector will also be in focus today.
33:13 That's the reason why we've seen a lot of traders take their bets off and they want to wait for the announcements in the budget coming through.
33:20 All in all, we're certainly keeping an eye on the benchmarks and we are expecting a little bit of choppiness to play out, especially given the budget coming through.
33:30 All right. Thanks a lot for that, Agam. So clearly watching out for that as well.
33:33 And in about eight minutes, we'll get our first set of guests coming in right on time, just 20 minutes before the pre-open session begins.
33:40 And then we try and dwell deep into what to look at it from a market perspective.
33:44 But keep in mind, aside of the budget being so important at 11, the pre-open or before the budget starts,
33:51 to just try and nail down some of these specific movers in the session is extremely important,
33:57 which is why the first half an hour today, we've had an extended trade set up, guys,
34:02 because just the quantum of news flow, Fed, budget and the stocks in focus was just so high.
34:09 It becomes very, very important to say that.
34:11 You know, my point is being my point is that when there is so much uncertainty and so many factors,
34:17 you would perhaps expect a bit and you know, that's what the implied open is showing you. Let's pull that up.
34:23 You're seeing a muted start because people are waiting to see how things are panning off.
34:28 And look at that implied open even lower now. So there's going to be a bit of wait and watch to really see what's panning out.
34:35 And as much as people have been saying that this is an interim budget, it's a vote on account.
34:39 Yes, technically it is technically a pre-election, pre-general election budget.
34:45 The government at that time has to just pretty much put out something to keep the finances running.
34:51 But that's not what we have seen playing out. And that's something we have to remember.
34:55 If you go back to 2019, that was when you had at least two big changes that were announced.
35:01 Right. So that's, of course, all that budget talk. But Agam, very quickly, two sectors, like we said, that led the way up.
35:07 Yes, it was banks and autos, both having a phenomenal run. Autos again in focus this morning beyond the budget.
35:13 It's the auto sale numbers that have come rolling in as well.
35:16 Anything in the auto pack that looks constructive at this stage?
35:19 I mean, have you sort of picked up on anything that is eye catching in that sense?
35:23 Yeah, so some very interesting moves coming in yesterday on Tata Motors and Maruti Suzuki.
35:27 Well, if I'm not mistaken, Tata Motors market cap has taken over Maruti Suzuki.
35:32 And these are the two big names which are going to be in focus.
35:36 I reckon that to a certain extent, the volumes numbers will be factored into the markets.
35:42 I think it's going to be interesting to watch whether or not we can in fact have some announcements
35:47 which may perhaps have an indirect implication on auto companies.
35:51 And on the back of that, we certainly will be keeping an eye on both these behemoths going into trade today.
36:00 But, you know, as we move in, let's get an expert view and an expert point of view as to how they would in fact navigate markets today.
36:10 And not only just today, but also through the course of the next few sessions.
36:15 Well, we have Milan Vesna of Gemstone Research who's joining us on the show right now.
36:19 Milan, good morning. Thanks for joining in.
36:22 It's going to be an interesting day of trade to say the least.
36:27 How are you placing your bets as far as the benchmarks are concerned?
36:31 If not on an intraday basis, then perhaps positionally?
36:36 Yeah, good morning, everyone.
36:40 See, the reason is that I'm a little skeptical on markets today is that very going strictly by the technical terms.
36:48 What we have today is a water on account or rather an interim budget, which is more commonly referred to as.
36:54 And generally speaking, there is no major announcements that should be expected.
36:59 However, if you look at the history in 2019, this government had presented an interim budget or water on account.
37:08 And they had some important announcements. And this is precisely what the markets are expecting today.
37:13 Now, that being said, there is immense volatility that we are seeing.
37:18 And this is very much harmful for a retail trader when the markets are down by 400 points, up by 400 points, down by 200 and then up by 200 points again.
37:28 So I think the best method to approach this market for a retail trader is to very patiently wait until a directional trend emerges in the second half of the session.
37:38 And then then take a call rather than then mindlessly participating in the in the very, very volatile moves that can happen in the first half.
37:48 OK, so Milan, based on that, what ideas do you have in terms of strategies and structures that you employ in the markets today?
37:56 I will have a little conservative approach here to begin with.
38:00 I would suggest that one should stay away from the markets. There is no need to compulsively trade the index.
38:06 There are there are rest of 199 trading days out of 200 where you can take a more informed and call based on more solid analysis.
38:15 But still, if you have to trade today, I will go with a long straddle.
38:22 I would buy 21 800 call and put for 8 fair at 21 5 and 2 4 9.
38:30 I'll be buying call and put off the same strike price that is 21 800. And that would result in a net premium outgo of around 464 rupees.
38:40 That is twenty three thousand two hundred. Now, that's a maximum loss that technically I can occur on the trend.
38:48 The logic is that the markets will stay volatile, but after that it will take a sharp move on either side.
38:57 And that's where this strategy will come into play. This will have a break even off 21 300 on the lower side and 22,000 to 94 on the higher side.
39:08 Now, this is a limited loss and unlimited profit strategy. And the maximum loss can be around 23 200.
39:16 However, I would add another layer of safety here that by two trading days, if clear trend doesn't emerge,
39:24 then you should limit your losses by 10,000 rupees. If your losses at 10,000, you must move out of this trade.
39:31 OK, Milan, I believe you also have one more from the banking space, if I'm not mistaken.
39:38 Can you tell us about that idea as well? Yes. Now, despite the kind of reactions that we might see to the fair commentary,
39:46 which I don't personally read too much into that, but I have a bull call spread on SDFC Bank.
39:54 The recent reaction to the numbers have given us an excellent opportunity to enter the stock on a positional basis
40:03 because the long term fundamentals remains absolutely intact.
40:06 I expect the stock to test 1550 levels over the next couple of weeks time.
40:13 So therefore, I would like to go with a call spread. I would buy 1470 call, 29th Fed expiry and sell 1550 call for 29th Fed expiry.
40:26 I'll be paying a net premium of 25 rupees. That would be my maximum loss.
40:31 That translates into absolute sum of 13 750. The maximum profit potential in this trade would be 30,000 to 23.
40:39 However, this max loss of 13 750 can still be kept limited by keeping a stock loss of 1410 on the stock.
40:48 OK, so that's a very interesting strategy on HDFC Bank. And remember that it.
40:53 It.
40:55 OK.
40:57 OK.
40:59 OK.
41:01 OK.
41:03 OK.
41:05 OK.
41:07 OK.
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