- #Nifty hits record high
- #Mphasis, #SunPharma in focus
Find out where money is moving in the market today with Hiral Dadia and Agam Vakil on 'Hot Money'. #NDTVProfitLive
- #Mphasis, #SunPharma in focus
Find out where money is moving in the market today with Hiral Dadia and Agam Vakil on 'Hot Money'. #NDTVProfitLive
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TVTranscript
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00:56 - Now we stick to the markets
01:03 because the markets demand attention.
01:05 The market is rip and roaring.
01:09 And we are talking about 22,000 on the morning show.
01:13 We are looking at 22,100.
01:15 And this is not about levels to be very honest,
01:18 because I think the market is moving beyond levels.
01:19 The market is telling you something.
01:22 The market is telling you that for now,
01:23 it seems that the market is very pleased
01:27 with what's come out of the budgets.
01:28 Maybe it took some time to digest,
01:29 but just look at that gains.
01:31 Actually, you know,
01:32 if the heat map would have shown you,
01:34 or just this is the Nifty contribution,
01:36 but if we can just get the Nifty gainers list
01:40 and just the kind of gains
01:41 that have come into some of the stocks,
01:43 because the number of stocks gaining,
01:45 I mean, this is the point contribution,
01:46 but the Nifty 50 gainers list
01:48 will show you how widespread the rally is
01:52 and the fact that Nifty IT is participating in a big way.
01:55 Yes, you can make it out by the contribution,
01:57 but beyond the contribution, look at that heat map.
02:00 That is rock solid.
02:01 BPCL up 7.5%, Power Grid up 5%, ONGC up 3%.
02:06 Three of the top four stocks are PSUs.
02:09 If somebody told you the PSU story is dead and buried,
02:12 I think that person has clearly gotten the call wrong.
02:16 Adani Ports up 5% after the brokerage upgrades.
02:18 And Alex, the broader end of the spectrum,
02:21 the gains are spectacular.
02:23 It's widespread again.
02:24 Some names that you wouldn't have taken attention to,
02:26 but from a NBCC to a SJBN to an NHPC,
02:30 again, it is PSUs.
02:32 The public sector enterprises are making the presence felt.
02:34 The Nifty PSE index at this juncture up over 3%,
02:39 PSU Bank index, and by the way,
02:43 today's move, 3.5%, it was the top sectoral gainer
02:48 in an otherwise, I don't want to say lackluster,
02:52 but an otherwise cautious market yesterday, right?
02:55 And it's significant gains.
02:58 It just so happens that the internal software, Neeraj,
03:02 if you don't refresh the page in the morning,
03:04 shows you yesterday's gain plus today's.
03:06 So I saw 5%, I saw 5% and I was like,
03:09 "Hey, wait, is that right?"
03:11 And so when I refresh--
03:12 - But you could be deceived for that, right?
03:13 - I could.
03:14 So it was 1.5% in the morning at open,
03:17 and it is now 3.5%, it just tells you the story
03:20 that the PSU pack is gaining.
03:24 So we've got Nilesh, in fact, joining in.
03:26 Nilesh, thanks so much, Nilesh Shah of Kotak joining in.
03:29 Of course, you spoke with us yesterday,
03:32 and what we're asking people that we're speaking to today,
03:36 experts like yourself, is that it took a little while
03:38 for the equity market to digest
03:40 what the finance minister had laid out as the plan,
03:44 but now it seems to be absolutely convinced
03:46 about the prospects going forward.
03:48 - So let me put it in a lighter way, Alex.
03:53 Yesterday, bond market appreciated the budget much more,
03:57 brought down the yield by 10 basis points.
03:59 Equity fund managers, you know,
04:02 bond manager (speaking in foreign language)
04:05 But on a serious note, as interest rates came down,
04:09 the valuation concern starts receding.
04:12 Interest rate goes down, valuation goes up.
04:15 And now we are reasonably convinced
04:18 that the exit yield on March 25
04:21 will be much lower than what it is today.
04:24 So you have a highway of lower interest rates
04:27 throughout calendar year 24, in early part of FY25.
04:32 That's bound to support valuation,
04:34 and maybe equities recognizing that today,
04:37 once they are sure that rates are going to go down,
04:40 they are upping the valuation.
04:44 - Nilesh bhai, good afternoon,
04:45 and thank you for taking the time out, Neeraj.
04:47 Just wondering, yesterday, I met a bunch of people
04:51 at a private party, and everybody was talking about
04:53 comments that you made about the budget
04:56 and the implications of the same.
04:57 Just trying to understand, yes, it was a bond budget.
05:00 Are the markets rightly factoring in the positives
05:04 that come in?
05:05 Because typically, a CapEx growth being pulled lower
05:08 than anticipated would mean
05:11 there could be near-term growth concerns,
05:12 but medium-term, it could look very strong.
05:14 So are the markets right in doing this
05:17 at the valuations that we are at?
05:18 - So, Neeraj, my market is taking a view.
05:22 The view is that government is still increasing
05:26 infrastructure investment on an absolute basis.
05:30 It is up 17% from revised estimate of 950,000 crores
05:35 to 11,000 crores. - That's true.
05:37 - More importantly, the government is vacating space
05:41 for private sector to raise credit or equity in the market.
05:46 We are seeing that bank credit growth
05:49 is getting constrained by deposits.
05:52 CD ratios are higher, and regulator is trying
05:55 to bring them to normalization.
05:58 Equity market is providing capital.
06:01 So by reducing borrowing program of the government
06:06 from last year, 11,75,000 crores,
06:09 from 11,83,000 crores, there will be enough space
06:13 for private capital investment.
06:16 They'll be able to borrow money from banking system.
06:19 They'll be able to raise money from capital market.
06:22 Equity is anyway available for good promoters.
06:25 And this combination will push private CapEx,
06:29 which has remained on back foot for a while.
06:32 - You know, Alex, the important connotation out there,
06:34 equity is available for good promoters.
06:36 I think that's a very important point
06:37 that Mr. Shah has made.
06:38 And the other aspect that I want to also raise
06:41 with you, Nilesh bhai, is the fact that
06:43 the domestic investor and the domestic institutional investor
06:47 have both benefited very significantly from buying the dips
06:51 over the past several instances of drops that you've seen.
06:55 And particularly in this last leg,
06:57 where you've seen significant
06:59 foreign institutional selling over the last month and a half,
07:02 and despite that, we're at all time highs today.
07:06 - One, domestic investors have matured a lot.
07:10 Nilesh bhai, Alex bhai, there was a time
07:12 when there was a small correction
07:14 and we used to run to our mutual fund distributors,
07:16 our investors, to tell them not to worry,
07:19 focus on long-term picture,
07:21 focus on long-term India growth story.
07:24 Now, the role is reversed.
07:26 If there is a correction,
07:27 they call us saying that you don't get worried, Nilesh bhai.
07:30 We are sending money.
07:31 Keep on buying and building on portfolio on correction.
07:35 The tremendous maturity shown by retail investor,
07:38 or at least certain part of retail investors,
07:41 is all thanks to mutual fund distributors.
07:44 I saw a number of 1st April to 30th September
07:47 retail investors' investment in stock market
07:49 on delivery side was just 500 crores.
07:52 Their preferred investment vehicle is mutual fund.
07:55 If you look at the numbers from 1st April to December 2023,
07:59 that's unlikely to be different.
08:01 The role played by mutual fund distributor
08:04 in pushing SIP culture, in buying on correction,
08:07 staying invested for longer period of time,
08:10 I think that's reflected in the market
08:12 where even if FBIs come to sell,
08:15 their selling creates a very small correction.
08:18 And once their selling is over, market bounces back.
08:21 - Okay.
08:23 Nilesh bhai, one final question.
08:24 Actually, two-part question.
08:25 One, is Mr. Nilesh currently bullish on equity markets
08:30 from a 12-month perspective?
08:32 Part two of my question,
08:33 because you look at numbers so closely,
08:36 do you reckon that earnings growth of India Inc.
08:39 will be able to support this uptick
08:42 that we're seeing in markets for FY25?
08:44 - So let me answer the second question first.
08:48 I think overall earnings growth,
08:50 even for December 23 quarter has come as per expectation.
08:54 Oil marketing companies, some of the PSUs,
08:59 automobiles, cement, pharma,
09:01 they all have delivered above expected results.
09:04 IT has been a leg guard.
09:06 Some of the private banks have been a leg guard.
09:09 But by and large,
09:10 earnings have still come as per expectation.
09:13 Yes, earnings as a percentage of GDP
09:16 at about four, four and a half percent
09:18 is on the higher side.
09:20 But I think it is sustainable
09:21 as we have become more productive.
09:23 The two costs which is hurting India Inc.
09:26 is logistics costs and power costs.
09:29 Our logistics and power costs
09:30 are much higher than peer group.
09:32 Thanks to PM Gatisakti Yojana,
09:36 logistics cost is on its way down.
09:38 The productivity is being seen over there.
09:41 Interest rates will also be down
09:42 and it will benefit some of the companies, not all.
09:45 But overall, I still think this four to 5% range of GDP
09:49 by way of profitability should be maintained.
09:52 Will there be ups and downs?
09:53 Undoubtedly, yes.
09:55 Quarterly basis, there will be misses and hits.
09:58 But overall, we still will be able
09:59 to deliver earnings growth,
10:02 which will satisfy the expectations of the market.
10:05 Now, the first question, am I bullish with 12-month view?
10:08 I never take 12-month view on equity market,
10:11 even though my job requires me to be short-term oriented.
10:15 We request investors to give us three-year money,
10:17 five-year money, give us SIP money.
10:20 So please don't take 12-month view,
10:23 especially at this all-time high level of market.
10:26 Please take three-year, five-year view.
10:28 That will be more beneficial.
10:30 - A great answer, Nilesh, as always.
10:32 Thank you so much for joining in
10:34 and for giving us that perspective.
10:35 I think that last message also for the investor,
10:39 look long-term.
10:40 And of course, the gains that we're seeing,
10:42 we're celebrating it.
10:43 But look at the next three years and five years as well.
10:46 We have to slip into a very quick break,
10:47 but remember, we're staying with markets
10:49 and everything that you need to know about
10:51 the fact that we're at all-time highs
10:53 on the benchmark index.
10:54 Do stay tuned.
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13:28 - Welcome back.
13:32 You're watching the live coverage
13:34 of the equity markets in India on MDTV Profit.
13:37 And as we speak, you have the nifty 50
13:39 that's gaining about 1.7% or thereabouts
13:41 off the low point of the day.
13:43 But as Neeraj, who was speaking just five minutes back,
13:45 was pointing out, it's not about the levels.
13:47 It's about the fact that we have in fact hit all time highs
13:50 a day after the interim budget was presented
13:52 and the roadmap for the next financial year was laid out.
13:56 A pragmatic approach was displayed by the finance minister.
14:01 Now, on a normal day, a gain of over 1%
14:04 would be something to talk about for Sun Pharmaceuticals.
14:07 But on a day like today,
14:08 when you have stocks gaining as they are,
14:11 it looks just a tad bit pale.
14:13 But we spoke with the management of Sun Pharmaceuticals
14:16 about the quarter gone by.
14:18 And here's a slice of that conversation.
14:21 In terms of the global speciality revenues,
14:24 if you look at about three to four years before,
14:27 it was constantly about 7% plus or minus.
14:30 And today, for the quarter,
14:32 if you look at overall global speciality,
14:34 it's almost inched up, upwards of 20%, almost there.
14:39 We have been consistently maintaining momentum
14:42 and focus on this global speciality business.
14:45 And growth rates have been ranging between 20% to 25%.
14:49 Depending on the market and depending on the quarter
14:52 and the overall seasonal fluctuation.
14:55 But our continued focus remains on this business
14:58 to grow further across the markets
15:01 where we participate in this business.
15:03 So, can you give us, you know,
15:05 what sort of a contribution should we be looking at
15:07 from the global speciality business in the coming years?
15:11 We are not giving any specific guidance
15:14 on any specific business segment as such.
15:16 We generally give the overall corporate groups revenue guidance.
15:20 Okay, sir.
15:21 However, we expect this global speciality business
15:24 will increase as a percentage contribution
15:26 to the overall consorted revenues
15:28 as we have seen in the past years.
15:31 Sure, sir.
15:33 Sir, also, there's been a couple of issues
15:36 on product recalls throughout the year, you know,
15:39 that we've been hearing of.
15:40 And issues at Halol and Mohali are very well known.
15:45 In terms of the USFDA.
15:47 So, would you be looking at setting up
15:50 alternate facilities to make up for these two?
15:54 Or by when can we expect a resolution on this front?
15:58 So, both on Halol and Mohali,
16:01 we maintain that we are continuously working
16:04 on the remediation process.
16:06 And at this point of time,
16:08 we are not able to commit exact timelines
16:10 when the complete resolution will happen
16:13 or the re-inspection will happen on these sites.
16:17 Okay, sir.
16:18 And so, what about the product recalls?
16:20 I mean, that's associated with plants.
16:22 So, do we see those going down?
16:25 Are we seeing some moves from transfers?
16:30 Yep.
16:31 See, we're talking about product recalls?
16:34 Yes.
16:35 The ones in the US.
16:37 I think product recalls is part of integral
16:41 to this overall pharmaceutical business.
16:43 And we, at this point of time,
16:46 would not like to attribute any specific site as such.
16:50 Okay, sir.
16:52 So, there's been a lot of conflict around the Red Sea
16:55 and there's this talk of maybe freight prices going up,
16:59 raw material costs going up.
17:01 Are we going to see some pressure
17:03 on the cost front for Sunpharma?
17:07 So, as far as the situation in the Red Sea,
17:09 we are continuously monitoring
17:11 and we also mentioned in the next call
17:13 that our primary objective is to ensure continuity of supply chain
17:17 and availability of the medicines to our end customers.
17:22 For this, if we are to move the channel of transport,
17:25 we will definitely do it.
17:28 That's what we would like to comment at this point of time.
17:32 So, there's also a lot of anticipation building around Taro.
17:36 Since you revised the price for the minority shareholders,
17:41 what are your conversations on that front?
17:43 Because from what I understand,
17:44 this could be the third attempt at acquiring the minority stake.
17:48 Is it quite positive?
17:50 And if yes, if this were to go through,
17:52 what would you do with the cash balance
17:54 that you will acquire from Taro?
17:58 So, the process is on at this point of time.
18:02 We have signed a definitive merger agreement
18:04 for acquiring the remaining stake that Sun Desktop owns.
18:08 We have given the price of $1.43 per share,
18:12 which is about 48% premium to the unaffected price of May 25, 2023.
18:18 However, the merger agreement which we executed
18:20 is subject to various closing conditions,
18:22 including shareholders' approval.
18:24 It's better to wait to cross the finishing line
18:28 before we take up any other matter regarding Taro
18:31 being a public company.
18:34 Sure, sir.
18:35 So, just trying to understand on the R&D front,
18:38 what usually is our split between the global generics and speciality?
18:45 How do we allocate our budget?
18:48 And are we looking at any other inorganic opportunities as well?
18:52 So, R&D split is approximately 60-40 overall, I can say,
18:58 between generics and speciality typically,
19:01 and growing more in favor of speciality
19:03 as we continue to invest further in our global speciality revenue,
19:08 global speciality business as the key core driver.
19:11 And for the current year, of course,
19:13 you would have seen that for the quarter,
19:15 we are about 6.8% of sales overall R&D investments.
19:19 And we expect also the full year to be somewhat closer
19:23 to our lower end of guidance of 7-8%, which we had done earlier.
19:28 Okay, sir.
19:30 So, for the allocepia drug that is expected to come out,
19:36 so by when will it come out?
19:38 And how big is the opportunity since the time we made the announcement?
19:41 We have a couple of other competitor drugs also in the market.
19:45 So, how do you see this portfolio shaping up?
19:50 So, allopathy R&D, we have already mentioned that we will launch on approval.
19:58 And the approval date is, of course, July 24, which has been already shared.
20:04 And we are just waiting for the approval,
20:06 and then we will take it forward from there.
20:09 So, we will be launching on the timeline, right?
20:13 That's what we have maintained at this point of time.
20:15 Okay.
20:16 And also, what kind of margins can we expect in the coming year with the India business also?
20:21 So, there is a lot of conversation around NLEM seeing some,
20:25 you know, drugs under NLEM seeing some pressure.
20:28 Also, the overall, do you expect it, the India business to grow at the IPM levels?
20:35 Do we expect to outpace the market?
20:37 And on an overall basis, how would you guide for Sun Pharma's margins in FY25?
20:44 So, first, taking the India-related question,
20:48 India business in Q3, of course, grew about 11.4% year on year.
20:52 Strong performance across various therapeutic segments.
20:55 And our aim is always to perform better than the market.
20:58 However, it's very important to note that this growth is substantially supported
21:02 by the underlying volume growth as compared to the India commercial market
21:06 where the growth is majorly driven by the price.
21:11 When you come to EBITDA margin, however, we are not guiding for any EBITDA margins.
21:16 We continue to remain focused on cost efficiencies throughout the organization.
21:23 After even consolidating the expense of newly acquired business like Concert and others,
21:28 if you look at the last eight quarters, our margins have been in the range of 25% to 26% plus.
21:34 Our key core drivers with global speciality business, India business,
21:38 apart from other business have made them strong growth momentum,
21:41 which is also a key factor for the resultant EBITDA margins.
21:45 The Chief Financial Officer of Sun Pharmaceuticals speaking to NDTV Profit there.
21:49 We are holding on to gains, considerable gains at that for the Nifty 50,
21:54 1.6% higher at this juncture at about 22,050.
21:58 And by the way, the Nifty bank up about 300 points from the low point of the day
22:02 and trading with gains about 1% or thereabouts.
22:05 We have to slip into a very quick break.
22:07 We've got more coverage of the markets lined up for you.
22:10 So, do stay tuned.
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25:46 Welcome back.
25:48 It's frenetic action in the equity markets in India today.
25:52 And in fact, just pull up the Nifty 50.
25:55 It's just about broken past the 22,000 mark on the downside.
26:00 Just minutes back, we were very close to that 22,100 mark.
26:07 See, I'm losing track of where we are.
26:10 But essentially, it's not about the levels is what we were talking about.
26:14 A little earlier in the session, of course, it is the fact that there is a rip-roaring rally underway.
26:20 Take a look at the heat map on the Nifty 50 as well.
26:23 And that will give you a bit of a sense of how things stand.
26:26 Because even at this juncture, with the ground that has been given up just a little bit,
26:33 and we are, by the way, once again above 22,000,
26:36 there are only three stocks on the Nifty 50 that are trading in the red.
26:39 One of them on account of relatively weak two-wheeler sales, and that is Ayesha Motors.
26:46 HDFC Bank has been under pressure and has been a bit of a laggard.
26:50 And then on the other end of the spectrum, you have a lot of the public sector enterprises that are doing particularly well.
26:56 So, BPCL, Power Grid Corporation of India, ONGC from the public sector pack that are doing well.
27:03 Of course, the advance-decline ratio also very favorably tilted in favor of the advances.
27:08 We have to draw this particular show to a close,
27:13 but we've got live coverage of the markets for the rest of the session, so do stay tuned.
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