- #Sensex, #Nifty gain in trade
- #BharatForge, #Hindalco, #RIL
- Volume buzzers
Tamanna Inamdar and Hersh Sayta dissect key market trends and explore what's to come tomorrow, on 'India Market Close'. #NDTVProfitLive
- #BharatForge, #Hindalco, #RIL
- Volume buzzers
Tamanna Inamdar and Hersh Sayta dissect key market trends and explore what's to come tomorrow, on 'India Market Close'. #NDTVProfitLive
Category
📺
TVTranscript
00:00:00 [Music]
00:00:23 [Music]
00:00:41 Welcome, you're watching India Market Close.
00:00:43 And it's looking like perhaps the close will definitely be better than the opening.
00:00:48 Markets in recovery mode after what has been a range bound and pretty tough day.
00:00:54 So right now, the Nifty and Sensex completely now near the day's high.
00:01:00 At this point, the Sensex about 500 points up.
00:01:03 Let's quickly look at what's happening in the broader markets though.
00:01:06 And have broader markets recovered, have PSU stocks recovered to some extent.
00:01:10 Broader markets have gone in recovery mode, at least not negative,
00:01:15 but nothing fantastical happening there. Completely flat on the mid-cap 100.
00:01:19 We pull up the small cap index as well and see what's happening there.
00:01:23 So you're essentially seeing banks, I would say, carrying the day.
00:01:27 Banks and financials carrying the day to day.
00:01:29 Let's pull up the Bank Nifty as well while we're at it.
00:01:32 Yeah, the small cap also completely flat.
00:01:34 But let's pull up the Bank Nifty while you're at it.
00:01:37 And that's where you see the strength of the day.
00:01:40 In fact, let's see the Nifty heat map as well and look at what's happening there.
00:01:44 Where you saw some pain coming in on the metal side.
00:01:49 And of course, stock of the day continues to be Hindalco.
00:01:52 There's no going away from what we saw this morning straight at opening
00:01:57 with its subsidiary Novelis talking about a mega project,
00:02:02 seeing cost overruns of 65 percent.
00:02:05 And Hindalco has been taking beatings since then.
00:02:07 Hindalco numbers stand alone have also been put out just a short while ago,
00:02:11 but no sucker there for the stock.
00:02:13 Coal India on the other end of it continues to be the winner of the day.
00:02:16 But you're looking at the financials theme overall, whether it's an ICICI bank,
00:02:21 SBI Life, even if I look at the BFSI space, Axis, etc.
00:02:25 Kotak Mahindra not doing too badly at all.
00:02:29 Auto is not having a great day, whether it's an Aishwarya Tata Motors
00:02:33 or even an M&M, all of them a bit under pressure.
00:02:36 Quick look at the advance declines before I hand it off to Harsh on specific stocks
00:02:41 which have been making news and wow, just look at that chart.
00:02:45 It's telling you how this market is unable to make up its mind.
00:02:51 You have seen the zigzag zig through the day going on and off.
00:02:55 So you had a mid morning recovery of sorts or a mid day recovery of sorts.
00:03:00 You've slid into negative territory again.
00:03:02 And now you are back really to positive territory with that advance decline gap now reducing.
00:03:09 I'm just going to quickly look at the Bank Nifty
00:03:12 contributories before I go further.
00:03:15 Who is contributing or what is contributing to the rise in the Bank Nifty?
00:03:20 And yeah, you have PNB, ICICI Bank, all of them doing fairly well on a day like today.
00:03:25 PNB up almost three and a half, four percent.
00:03:28 But, you know, the stock specific stories are interesting.
00:03:31 And we talked about one stock of the day, Hindalco.
00:03:34 Harsh, there are many more that have been reacting negatively or positively to results as well, isn't it?
00:03:40 Yes, plenty of stocks to talk about today, Tamanna, but I'm going to limit myself.
00:03:44 I'm going to start off with Bharat Forge.
00:03:46 We spoke with the management yesterday.
00:03:48 The stock continues to tumble in trade today as well.
00:03:51 With it, Paytm too is down close to 10 percent on the back of that Macquarie.
00:03:57 No respite currently being seen on that one either.
00:04:01 In terms of the positives, PSU pack has seen a bit of recovery and with it, RVNL as well as Coal India.
00:04:08 Coal India on the back of some positive notes that have come on the back of numbers again.
00:04:13 And RVNL emerged as a bidder on another project and 7 percent uptick there for RVNL as well.
00:04:21 A bit of a bashing that we had seen on some of these PSU counters last two, three days seems to be reversing.
00:04:26 So that's a positive.
00:04:27 In terms of earnings, plenty.
00:04:29 The first talk of the negatives, HEG, GSK, Pharma as well as SAIL, all of those lower, sharply lower, 3 percent, 6 percent.
00:04:38 Each GSK as well as HEG on the back of numbers.
00:04:42 Also, some of the other ones, NRB Bearings came out with numbers again earlier today and the stock has slid 4 percent.
00:04:51 TVS Sri Chakra, we've seen a bit of a recovery there coming through and LG down 9 percent since the start of today.
00:04:57 That's the other one, Phoenix Mills and Galaxy. Phoenix Mills, you know, good set versus what was expected,
00:05:03 but the stock taking a knock of nearly 5 percent and Galaxy Surfactants also lower.
00:05:09 Let me switch over to the positives.
00:05:10 It's a positive day, at least on the benchmark.
00:05:13 And let me pull up the likes of a Borosil, a KIOCL, both of which are up and away on the back of numbers.
00:05:20 You have Mediasys and Time Techno as well.
00:05:22 Again, Time Techno flying away post the numbers, of course, a block deal also on that one and Mediasys also higher,
00:05:30 at least as we speak. You also have the likes of a Repco Homes, which is trading higher in trade today.
00:05:36 So plenty of stocks, but it's a very stock specific, action specific and new specific market, Tamanna.
00:05:43 Absolutely. Just want to pull up MTNL as well.
00:05:46 Their numbers were in a little while ago and not very positive.
00:05:52 MTNL still about 8 percent down on that.
00:05:56 And you're seeing InfoEdge numbers coming in as we speak. InfoEdge right now in negative territory,
00:06:02 though the numbers on the face of it look pretty good. Net profit has jumped up substantially,
00:06:08 almost double from what I can see at first cut. Revenues have also been quite decent.
00:06:13 But the stock performing in negative territory, EBITDA is also up about seven and a half percent.
00:06:19 Perhaps we'll have to see what the estimates are and why that's sort of a negative streak right now.
00:06:24 Anyways, let's go quickly now across to our experts for the day.
00:06:29 Soni Patnaik, AVP, GM Financial Services is joining us right now.
00:06:34 Soni, great to speak with you on the show. We're also speaking with Dharmesh Khan today.
00:06:38 He's head equity researcher at Chola Securities. Dharmesh, welcome. Very good afternoon.
00:06:42 Soni, let's begin with you and the sort of recovery that we're seeing right now in the indices,
00:06:47 Nifty back above 21,700. Can it stay put there?
00:06:52 Good afternoon, Tamanna. Thank you so much for having me on the show.
00:06:55 So I think, you know, we've been seeing Nifty stay quite in the range of 21,500 to 21,800,
00:07:00 850 on the higher side. So even if today's recovery is still heading towards the resistance zone of 21,800 to 21,850 in cash level.
00:07:08 So the only moment it's able to cross that, then we can see the 22,000, 22,100, you know, coming on the screen once more.
00:07:16 As of now, it's looking quite positive. Maybe there could be a positive opening even tomorrow with the sort of put writing that's happening at 21,700, 21,600 put strike prices today.
00:07:26 So I think on an immediate basis, 21,680 holds as a crucial level for a bit above which, you know, the Nifty must close.
00:07:34 If that happens, so then perhaps tomorrow should continue as a positive day.
00:07:38 I think the only concern would be Bank Nifty. Bank Nifty also has equally, you know, a lot of resistance around 46,000, 46,200.
00:07:47 So as long as Bank Nifty is not successively taking out 46,200 on the higher side, we may see some sort of selling pressure on higher levels.
00:07:55 So I think that's the key level to watch out for when it comes to Bank Nifty.
00:07:58 All right. Key level to watch out for on Bank Nifty. You are seeing a good recovery mode over there.
00:08:04 Soni, before we move ahead to, you know, Dharmesh's views, dare I ask you about Hindalco.
00:08:10 Any kind of relief that you see there on the charts?
00:08:17 I think Hindalco, you know, after what we've seen, 500 is holding some sort of immediate support.
00:08:25 So I think from 500, it can bounce back to 520, 525 odd levels, but not a lot of recovery.
00:08:31 They could be continue as a selling pressure on charts. Also on the options, derivative options chain that I can see.
00:08:39 I think it's not very encouraging as of now just to play for a pullback for, you know, just higher levels of 525, 525 as such.
00:08:47 But yes, 500 is a good support. It may consolidate in this range for a few days.
00:08:53 You know, just not giving out any sort of a directional trend going forward.
00:08:57 So I think we just have to bear with this sort of a pain for a few days.
00:09:01 Got it. Dharmesh, let me come to you. You know, I want to try and understand how are you viewing markets at the moment?
00:09:08 You know, we've got one day where we have good gains coming through and another day when the markets are taking everyone for a spin.
00:09:17 So what's your sense? I think this is the nature of the market, which is likely to be there for some more time.
00:09:26 So topsy turvy kind of a market. Normally everything is priced to perfection as far as stocks are concerned.
00:09:33 And that is what is causing this volatility in the market, because you don't have any elbow room for any of the errors being there.
00:09:41 And sector rotation is the game which is going on in the market. And this market is now all about, you know, liquidity.
00:09:50 It's not about valuation because valuations are already being priced in.
00:09:54 And to a certain extent, it's on the higher end of the valuation trajectory where most of the stocks are trading.
00:10:00 But the type of liquidity flow in which you are seeing, I mean, almost 18,000, 18,500 kind of SIP flows, 2.8 million more mutual funds SIP accounts being opened on a monthly basis.
00:10:10 So this is a huge inflow of liquidity which is coming. And this money, the mandate is to be deployed into the market.
00:10:16 So that will provide the much needed flow. I don't think for next one month we can have a breakout of any directional trajectory in the market,
00:10:25 whether it is today 2000 plus or, you know, 21,000 below.
00:10:29 So this is the zone in which the market is likely to oscillate. And thereafter, build up to the fourth quarter earnings and elections build up will start.
00:10:38 So overall, the sense is still positive, though on a heated map we are standing right now, but that is likely to be there for some time to come.
00:10:47 Understood. And Dharmesh, you know, we took, you know, Sony's views with regard to Hindalco.
00:10:54 What are your sense? What do you make of the numbers as well as some of the commentary?
00:10:58 Very interesting commentary that's come through. What do you make of it?
00:11:01 Is this like a knee jerk or do you think there's a fundamentally large shift that's happened?
00:11:09 No, to my mind, it's more of a knee jerk kind of a reaction, which we have seen in Hindalco.
00:11:14 And not to forget, like, Hindalco has done quite a bit. I mean, it's already up more than 25 percent in the last three, four months.
00:11:21 So some profit taking was warranted, which has happened on the back of this new slow of the CapEx expansion.
00:11:27 The worry was not about the CapEx expansion plan, which they have already announced.
00:11:31 The worry was the increase of the quantum of the first investments which are likely to go under the CapEx cycle.
00:11:38 Hindalco, if you look at the management, they have done it time and again.
00:11:41 I mean, I've been tracking this company for 15, 20 years.
00:11:44 And every time when they announced CapEx, Capacity expansion, it goes in for a negative turn.
00:11:49 But eventually, after three years, it plays out to their advantage.
00:11:53 So I will give this benefit to the management. I am pretty sure after three years time frame, this will also play out to their advantage.
00:12:00 As far as fresh buying is concerned, I think give it some time, maybe a couple of days more of some softness in the stock,
00:12:08 5-7 percent more down from here will give you a better margin of safety for an investment perspective.
00:12:13 Results were good. Nothing wrong with the results. Even the analyst numbers were quite OK.
00:12:19 So I think the US counterpart is doing well. Going forward, aluminum and copper, both will be needed.
00:12:25 And that is the metal for any auto consumption sector. So this will stay.
00:12:31 Nothing wrong with the balance sheet or nothing wrong with the working capital cycle or the operating margins of which they are having.
00:12:38 And I think that's more of just a reaction which has happened.
00:12:43 So I do look forward to implementing this stock. We'll be happy if it comes down below 5-7 percent from here.
00:12:49 OK, so Dharmesh doesn't think that there is a problem per se, but we put together this bit of data on what exactly has happened to Hindalco today and why it tanked.
00:13:00 And Anushi is also joining us with the Hindalco standalone numbers and more details on this.
00:13:05 But essentially, the problem is not so much with Hindalco as with Novellis, Hindalco's subsidiary, which it acquired in 2007.
00:13:14 They had announced a project in Bay Minit, which is a place in Alabama near the coastline.
00:13:21 They're building a recycling and rolling plant there, which will service and make aluminum for beverage cans, EVs, etc.
00:13:29 It's an important project because it aims to be carbon neutral for scope one, scope two greenhouse gases.
00:13:35 So you need to see that in the context of if that is the aim, how much do you need to spend to make it?
00:13:41 What has astonished the street is that in its con call, Novellis said that the project, which was pencilled in at $2.5 billion, will now cost $4.1 billion.
00:13:51 So you're looking at a 65 percent upside. So it's not only going to cost more, it's going to be delayed.
00:13:57 The delay in commission could be as much as 12 months. There are also lower returns expected from mid teams to a double digit.
00:14:05 And the reasons for this are also astonishing, to be honest, because this is the management itself that's saying that when they first set out on the project,
00:14:15 there was a low level of engineering that underestimated the civil and construction requirements.
00:14:21 It was over ambitious view on how you're going to keep your costs low because it's a construction near the coast.
00:14:28 Inflation led to cost increase. But can it be to this extent?
00:14:33 And a couple of notes. Largely, I would say the CLSA note that has spooked the market because they believe that even this double digit growth is a tough task.
00:14:40 And the overhang of this particular project will remain. Now, the question is, to what extent does it impact Hindalco?
00:14:48 And Anushi is standing by with those details. Anushi, just explain to us Hindalco numbers, of course, but the contribution of a novelist to Hindalco's top line.
00:15:00 Absolutely. So as you correctly covered all the aspects of what is the Bay Minit project and the implications of how the growth estimates and the cost overruns and the time delays is going to cost in terms of guidance and all that.
00:15:14 Just a quick note over here that as a novelist is this arm of Hindalco and contributes about 60% of its consolidated, 60% of the total revenue of Hindalco's revenue from operations.
00:15:27 As of if we look at the last couple of quarters now coming to Hindalco's results over here.
00:15:33 So the street expectation was about a 6% decline, but the company managed to surpass those expectations, showing just about a 0.65% decline at about 52,000 crore, which is on the back of the lower aluminium prices that has been going on.
00:15:49 Again, the EBITDA was about 65% up at about 5,865, much higher than the street estimates of about 5,500 crores. EBITDA margins mainly remained in line at about 11.1% range compared to the street expectation of about 11.6%.
00:16:05 So what did miss the expectation was net profit, which saw about a 71% increase to 2,331 crore, but it is to be noted that this was on the back of a higher impairment loss of about 171 crore, which took place in this quarter compared to impairment loss of about 6 crore in the previous years Q3 of FY23.
00:16:28 So this is all the scene that is going on Hindalco today.
00:16:31 Understood Anushi, thank you for that. You know, Tamanna, the other piece also is with regard to how CLSA is viewing this.
00:16:40 You know, the guidance that came through from Novelis is they reduced their IRR on the project from mid-teens to double digit, right, which also what CLSA believes is going to be a tough ask.
00:16:54 That's what I highlighted. So your returns are less, your project is delayed and is going to cost more. But having said that, the point that Dharmesh was making, it's an important project.
00:17:04 And once it's done, the initial hiccups are done, it will start bearing fruit. But the question is, are you willing to wait three years?
00:17:11 Absolutely. Dharmesh, give us some more insights on this three year piece that you're talking about. So the CAPEX will probably take a year or two for it to start bearing fruit.
00:17:23 So how should a holder of Hindalco approach this from a three year horizon perspective? Should one wait for a larger correction to come within the benchmark as well as in Hindalco before they move in? Or should you buy at this point and be a three year holder?
00:17:44 I think if you break it into the parts, I mean, Hindalco is a standalone business plus the Novelis business. And this is an addition to the Novelis business, which is likely to be a three year time period horizon because of its full capacity utilization when it will come into play.
00:18:01 So the project is already being delayed. And now this CLSA call is one of a subjective call. So they are viewing it that, I mean, double digit growth may not be there after three years time frame, which is, I mean, it's an opinionated call.
00:18:15 We all have our opinions. So they are, you know, full light to do that. But I don't think so. It will be the scenario. And eventually the profits are going to come on the table. And if you are having that positivity and that aspect in mind, my own sense is, that's why at the beginning I said 5-7% more price correction from here would be an ideal opportunity to get into it.
00:18:39 Because all other factors are playing out. There's no wrong or, I mean, there's no deficiency or no discrepancy out there. So those businesses will continue to do better and better as the time goes by.
00:18:52 And commodity price internationally, if you look at it, last year it was a negative year for all the best metals. And this year so far it has been a negative year, which comes to the benefit of a company like Hindalco, which is not the miners, but the, you know, producers of B2B segment.
00:19:07 So that was the reason why I'm pretty bullish on Hindalco from a long-term perspective. So if you are a holder, keep on holding it. If you want to buy, you can buy now. Why do you even wait for 5-7% or 10% more of a correction if you are looking for a period of 2-3 years kind of a time frame. So long term, I think it's a solid bet.
00:19:24 Right. So yeah, Hindalco from a long-term view might still be an option you need to look at. Meanwhile, you're seeing BHEL numbers on your screen. The first cut looks like not a very great quarter for the PSU, down 6% already. We're going to take a very short break. But when we come back, we're addressing this slicing that we're seeing in PSU stocks. Will it continue? Can we see some recovery? And what's the road ahead? We're back on all of that after this short break.
00:19:53 [MUSIC]
00:20:06 [MUSIC]
00:20:16 [MUSIC]
00:20:26 [MUSIC]
00:20:36 [MUSIC]
00:20:46 [MUSIC]
00:20:56 [MUSIC]
00:21:06 [MUSIC]
00:21:16 [MUSIC]
00:21:26 [MUSIC]
00:21:36 [MUSIC]
00:21:46 [MUSIC]
00:21:56 [MUSIC]
00:22:06 [MUSIC]
00:22:16 [MUSIC]
00:22:26 [MUSIC]
00:22:36 [MUSIC]
00:22:46 [MUSIC]
00:22:56 [MUSIC]
00:23:06 [MUSIC]
00:23:16 [MUSIC]
00:23:26 [MUSIC]
00:23:39 All right. The last end of results season is on and you're seeing those numbers coming in. BHEL, we spoke about very, very briefly before the break and they're not looking pretty. Revenue, okay, seems fine, about 4.5% up. But EBITDA losses seem to have shrunk to some extent but not looking great.
00:24:02 Your net loss though has gone into 149 crores versus a profit of 42 crores year on year consolidated numbers. Agam is joining us now for a breakdown of the numbers. Where is the pain point coming from, Agam?
00:24:17 Sure. So, Tamanna, two things that we need to keep an eye on when it comes to Bharat Heavy Electricals. One is that it's order book. Its order book is well over a lakh crore rupees but its execution has continued to see weakness and it's not just a one-off quarter. It's a little bit of a trend when it comes to BHEL. And because of that, its revenues, while they have risen 5% year on year, they are still below Bloomberg estimates of around 6,000 crores.
00:24:44 That has in fact led to weakness as far as its operations are concerned and thereby leading to an EBITDA loss of around 63 crores against a profit of 144 crores year on year. Well, no prizes for guessing then that the bottom line has also seen a net loss of around 149 crores year on year against a profit of 43 crores.
00:25:06 Now, do remember that off late, we have seen BHEL run up substantially. In fact, it has been one of the top gainers off late over the course of the last two to three weeks, largely on account of the several orders that it has got from other government entities. The question really is that while it continues to see its order book burgeon in terms of its execution, that's where there has been slackness and that is very evident in the numbers that you've seen in BHEL.
00:25:34 Also, the reason why we have started seeing that weakness come through, especially over the last couple of sessions. The real question is, can the company really pick up its execution? For now, that doesn't seem to be the case and that's very evident in the numbers too.
00:25:48 You know, what a succinct and perfect breakup of the problems with BHEL because it's talking and it's giving you a hint into what the bigger problem is when it comes to PSUs. And yes, you might have seen some recovery in some of those counters, but all right, you are getting the orders. Can you execute them? Can you execute them on time with efficiency? And that's where the whole question comes.
00:26:12 I'm coming very quickly to Dharmesh on this and let me get his view first on BHEL and this whole PSU PAC pain that we've been seeing.
00:26:22 Yeah, I mean, there cannot be a better way of highlighting this fact that execution is the thing. And the other companies from the PSU PAC like Hindustan Aeronautics or Bharat Electronics, they have demonstrated the execution capability.
00:26:35 And that is why the premium valuation has come through. BHEL, though it's having an order book of more than 1 lakh crore rupees, that is almost 5x of their current run rate. But I mean, operating loss is something which should not have been there.
00:26:48 I can understand lesser operating profit or operating margins being lower, but operating loss is something which is definitely not negotiable. And the entire run up to BHEL was on only two counts. One was a healthy order book and increasingly growing order book.
00:27:04 And the second was that this company has transformed into a more of a private sector payable execution is picking up in a better way. So that doesn't look to be the case. I have to look more into the details of it.
00:27:18 But definitely this is not a thing which will go down well with the investors and traders who are holding BHEL.
00:27:27 Sure. Thanks for that, Dharmesh. Before I come back to you, let me go to Soni. Soni, your views, especially with regard to some of these, the broader PSU PAC, how are they looking on charts, but specifically on BHEL? What's your view at this particular price point?
00:27:47 Harsh, if we just talk about BHEL, then from the options data, I can see that 200 holds out to be a very strong support. Even on charts, it was indicating because earlier it was a very strong breakout above 200. And the entire of Jan and Feb series, we've seen it continuously holding above 200.
00:28:04 There's a lot of aggressive put writing also at 200, even when the result impact has been seen and the stock has seen a sizable fall. So I believe that, you know, with this support, it can definitely bounce back and head towards 220-225 odd levels in the coming days.
00:28:21 200 holds a very crucial support, but any break or close below this level can cause some profit booking on a charts basis and it can see 190-188 odd levels also. But as of now, the stock is a good buy from dips, keeping a 200 as a stop loss and look for targets of 220. I think that's how it can bounce back.
00:28:43 And speaking about the broader PSU space, we've seen some volatility in this entire space where, you know, last two days, some profit booking has taken place. But obviously, you know, the correction that has happened has also given a very good buy on dip sort of a strategy, especially in stocks like NTPC, ONG, SEC, All India that you can see. So I think these stocks have just come to the level where one can re-initiate the longs and ride the momentum again for another 5-6% upside.
00:29:12 Wow, very interesting there. You know, possibility of riding that momentum still on some of those PSU names. But Dharmesh, if I can come back to you with regard to just valuation and comfort, some of these have run up substantially, you know, thereby somewhere signaling that the market seems to suggest that there is a fundamental shift with regard to how PSUs can now execute or the perception of execution with regard to PSUs.
00:29:41 Now, outside of BHEL, which is, you've voiced your opinion very clearly, outside of BHEL, how do you like some of the other names, the likes of HAL, SAIL, NHPC, BEL? I've given you a mix, Power, Defence, maybe some Railway as well. How do you see valuations in some of these pockets?
00:30:02 I mean, these are the sectors which have seen the maximum traction, the Power sector, the Defence sector and the Railway infrastructure segment. So all these sectors seem pretty well poised for further growth. I mean, there is no question mark raised as far as business or execution of the order in hand is concerned.
00:30:21 The results which I have seen so far for Q3 has been a very good set of numbers, be it HAL. The numbers were good in line with what the expectation was. And so was the case with, say, I mean, in Defence, if you look at shipbuilders like Bajgaon Dock or Kochinsky Pyre, they have also come out with a good set of numbers.
00:30:38 RVNL, the case was the stock price has gone up too fast, too soon. So that discounting has taken place. I think the correction has been there. I won't be surprised if some more correction is in store for the Railway infrastructure stock like RVNL.
00:30:54 If it comes to around 200 kind of a level, it would be again a really good and a screaming buy out there. So if I want to place my bets, it would be like this RVNL, Aircon from the Railway space. IRFC also merits the bet out there.
00:31:11 These three counter from the Railway side. In Defence, it's HAL, BEL and Majbound. These are the three companies which look pretty attractive. Power sector, NTPC is there. It's already has done good.
00:31:25 NTPC and Power Grid are already there. But apart from that, from private sector pay like JSW Energy, one can go into and Metal and Mining Coal India is still very cheap. I mean, it's available at less than 10 times of the pay multiple based on the TDA basis and with ROE more than 56%.
00:31:41 So it's very hard. You can go wrong. And this you put in context with the thermal power generation capacity expansion, which Government of India is planning. It's almost 80 gigawatt. And we have seen the volume of take coming from Coal India.
00:31:56 So this trajectory is likely to continue. The profitability has compounded over 30% for the last five years. So this is again a good space to be and maybe INMDC again.
00:32:07 So these are the few companies which looks very attractive. If you are a holder for long term, no problems out there. But if you are looking for some short term kind of an adjustment, then I do think Railway Infra can come in for some profit taking.
00:32:19 Though today the day has been good, but going forward for one month, you can get a better entry point.
00:32:25 Understood. Thanks so much for that comprehensive view with regard to PSUs. Let me also quickly mark out Paytm. At lower circuit since the last 15 minutes now, it's sitting 10% lower.
00:32:39 We'll speak more about that after this very short break. On the other side, we'll continue to get you specific names and advice and of course, top buy sell recommendations today.
00:32:49 [MUSIC]
00:33:03 [MUSIC]
00:33:13 [MUSIC]
00:33:23 [MUSIC]
00:33:33 [MUSIC]
00:33:43 [MUSIC]
00:33:53 [MUSIC]
00:34:03 [MUSIC]
00:34:13 [MUSIC]
00:34:23 [MUSIC]
00:34:33 [MUSIC]
00:34:43 [MUSIC]
00:34:53 [MUSIC]
00:35:03 [MUSIC]
00:35:13 [MUSIC]
00:35:23 [MUSIC]
00:35:33 [MUSIC]
00:35:43 [MUSIC]
00:35:53 [MUSIC]
00:36:03 [MUSIC]
00:36:13 [MUSIC]
00:36:23 [MUSIC]
00:36:33 [MUSIC]
00:36:43 [MUSIC]
00:36:45 All right, markets continue to be in recovery mode, but I'm going across to Agam now, who's tracking what's happening in the F&O space on the day of Finn Nifty expiry. Agam, are you seeing that same choppiness and volatility?
00:36:59 We most certainly are seeing a lot of choppiness and while the day may not be focused as much on the benchmarks, we certainly have seen their ups and downs coming through.
00:37:11 And that in fact has led to a lot of volatility as far as the Finn Nifty options market is concerned, considering it's a weekly options expiry.
00:37:20 But I'll come to that in just a bit to address how the Nifty is panning out. We are seeing longs coming through even as we see an open interest increase of around 4%.
00:37:29 Moving on to the Bank Nifty futures, that's where once again we're seeing a little bit of strength resume.
00:37:34 And now we have taken out all the weakness that we saw last Thursday.
00:37:38 The reason why that's important is because last Thursday was where we saw, well, we dropped off from your near-term highs.
00:37:46 For now, looking at longs coming in. Pardon me. Of course, this is the option open interest change as far as the Nifty goes.
00:37:54 This will take a little more in terms of traction tomorrow and day after, but let's pull up the overall open interest distribution.
00:38:01 And for now, we're still looking at a 500-point range between 22,000 and 21,500 on the lower end, based on Max OI.
00:38:09 Moving on to the Finn Nifty expiry. Now, that's where things have become a little bit more interesting because we're currently looking at 20,200.
00:38:19 And remember that because of a significant amount of calls being written there and that's been taken out,
00:38:25 and now there's a likelihood that we will in fact close somewhere around that mark is the reason why there has been choppiness.
00:38:32 Do remember that somewhere in the middle of the day, we had in fact seen a very, very sharp cut as well.
00:38:37 That said, overall, it does seem like it's turned out to be a good day at least for positionally long participants.
00:38:45 But when it comes to your open interest gainers, we're looking at shots across at least in the top five open interest movers.
00:38:52 Hindalco, MCX, BHEL, IPCA, Labs and Bharat Forge, all of them under pressure and looking at shots.
00:38:57 And on the other hand, among stocks which are seeing unwinding in trade, we're looking at shot covering for PI Industries,
00:39:03 Canfin Homes, Zyrus Life and City Union Bank. Keep an eye on these counters.
00:39:07 But as we move into trade tomorrow and day after, I reckon all eyes will now be on the Bank Nifty,
00:39:13 considering the weekly options expiry, but also the fact that we have recovered a lot of the losses
00:39:18 which were made over the course of the last three to four sessions.
00:39:21 Yeah, Bank Nifty definitely in recovery mode and you're seeing that in the entire BFSI pack as well.
00:39:29 Just highlighting an important tweet from Prime Minister Modi on the solar energy scheme.
00:39:37 Now, a few weeks ago, he had spoken about, in fact, in late Jan,
00:39:43 Prime Minister has spoken about this scheme, which is essentially to give solar energy on rooftops to one crore homes.
00:39:53 Now, in this series of tweets, he's detailing how this will happen. And important thing is, it's the PM Surya Ghar Muft Bijli Yojana.
00:40:03 This is the key factor because that means no one is paying, at least the end user is not paying for this Bijli.
00:40:08 This project will have an investment of over 75,000 crores and aims to light up one crore households
00:40:14 by providing up to 300 units of free electricity every month.
00:40:19 So in order to popularize this scheme, local bodies will be incentivized to promote rooftop solar systems.
00:40:27 At the same time, the scheme will lead to more income, less power bills and employment generation.
00:40:33 So this is going to be the big one to watch out for. Let's see what some of those renewables are doing.
00:40:39 And yes, some of them are, you know, everyone's in their own different story because Borosol Renew,
00:40:45 as Harsh was also pointing out, has had generally a good day, though it has spiked over an hour ago, Harsh, when that tweet came out.
00:40:53 Suzlon has now, you know, come off. But you are maybe going to see a return to some interest in the renewables space
00:41:04 because now it's very clear that it's not just one of those schemes. There is an allocation.
00:41:10 You're saying the government is going to spend 75,000 crores on this.
00:41:13 Yes, absolutely. And that, of course, I'm not sure how much of that is factored and how much of that continues to trickle through incrementally.
00:41:24 This is, of course, a positive.
00:41:25 Are you saying the stock prices?
00:41:26 Yes.
00:41:27 That nobody knows.
00:41:30 Yes, absolutely. So that's that's something to think of. But let me take it across to Dharmesh, take some of his views on this one.
00:41:36 Dharmesh, what's your sense? Has the run up in some of these stocks already?
00:41:43 Are we are we late to this particular party or do you think that there is still some juice left in some of these?
00:41:50 I firmly believe that we are late to this party and we see how this 75,000 crores over a period of time frame will be allocated is to be seen.
00:42:00 I think a strong contender for this, the largest share by will be BHG again, maybe NDPC to a bigger extent.
00:42:08 But I don't think this larger share will come to the private sector place.
00:42:13 Plus, it will since it's a welfare scheme.
00:42:16 So there are hardly government of India will leave any margins for the players to make a decent profit out of it.
00:42:23 It will be a very minimal margin kind of scheme.
00:42:27 Secondly, what I'm worried about is one is a solar panels.
00:42:30 The second is the per month electricity consumption that is also to be given free to most of these players.
00:42:36 So that how it plays out over a period of time has to be seen.
00:42:41 But as of now, I think the two biggest benefices to my mind is one is BHG and the other one will be through NDPC.
00:42:51 How and which subsidiary it will be is hard to point out right now.
00:42:56 Other from the wholesale renewables or selling and sell and all.
00:43:00 I think the party is more or less done with that on this news flow.
00:43:04 So that's an interesting take. But think about it.
00:43:07 Your nodal agencies may be as ambitious in BHG and NDPC.
00:43:11 But you need the private sector to come and make the components which will translate into those large numbers.
00:43:17 We saw something similar in railways.
00:43:19 Maybe the heavy lifting came from government run companies, but then there was enough work for everyone.
00:43:25 Let me get the technical view from Soni.
00:43:28 Soni, any of these energy renewable names, despite the pain that a lot of them have been through in the last few sessions that you think you would like?
00:43:38 I think Tamanna, just the way I've mentioned NDPC, one can still look for, you know, look at this talk itself, because technically in derivatives data, it has reached a support.
00:43:48 The support is around 323.15 and it's closing also above it.
00:43:52 So I think it can bounce back above 333.35 on levels.
00:43:56 I think this is a stock that can be looked at because this reward is also quite favorable and there is a good call open interest and mining also seen at higher strike prices.
00:44:05 I think NDPC would be the pick from the best from this pack.
00:44:10 Sure. Understood. So let's also quickly have a look at what Paytm is up to.
00:44:18 Let's go to Paytm first, Tamanna, actually.
00:44:21 Let's have a look at what that one is up to, because, of course, there was a note by Macquarie.
00:44:28 And if we can pull up, because we spoke with Suresh Ganpati, who's obviously the author of that note, and he's downgraded Paytm quite sharply.
00:44:38 If we can pull up what he had to say with regard to Paytm.
00:44:42 But two key takeaways, at least from my side, with regard to Paytm.
00:44:45 One is that he's not really, basis his channel checks and basis Macquarie's channel checks.
00:44:51 They don't believe that the 33 crore customer base can be maintained by Paytm and thereby that will have a knock on effect on revenue.
00:44:59 Also, with regard to loans, they believe that distributors of loans and BFCs banks may not be willing to continue at the same clip at which they've been disbursing loans on Paytm.
00:45:11 Both of that will have a knock on effect on revenue.
00:45:14 They've downgraded the revenue estimate by 60%.
00:45:18 Let's go across, listen in to Suresh.
00:45:21 You know, you were speaking with my colleagues, Vishy and Samina earlier today.
00:45:26 Have a listen on that conversation.
00:45:30 So I think what we have always been telling you is that the most important business for Paytm continues to be its financial services business or its lending business.
00:45:40 That is the partnership that it has with all the lenders.
00:45:43 And they do have a great set of data, which and of course technology also, which they used to leverage and act like a good digital DSE.
00:45:52 And so are these customers and give it to the lenders and the lenders are happy paying them a certain day grade.
00:45:58 But the problem here is what's happened here is because the restrictions which are imposed, which have been imposed in the Paytm payments bank,
00:46:05 there is clearly a worry that there could be exodus of a lot of customers as well as the merchant ecosystem.
00:46:12 If that indeed happens, clearly the lenders will have to re-evaluate their decision or relationship with the, with 197,
00:46:21 which is the parent company of Paytm payments bank.
00:46:23 Now, our challenge takes reveal that that indeed is the case.
00:46:27 The lenders are re-evaluating their position with 197, could be for a variety of reasons.
00:46:33 One of the lenders, largest lenders has already reduced their exposure to Paytm by from 2000 crores at the peak down to 600 crores now.
00:46:42 So you have seen significant scale down by the lending partners and there is a possibility that there are more in the pipeline.
00:46:50 And at least some of them have obviously kept lending in a limbo for the time being.
00:46:54 So all that is actually will have a corresponding, you know, catalyst effect on the entire company and it's a business model of profitability model.
00:47:05 So the call that we have taken very clearly is the fact that there will be a significant reduction in the distribution business revenue.
00:47:12 And that remember is the highest EBITDA contributor in our view.
00:47:15 And in the issue of the fact that these numbers can come down quite significantly,
00:47:21 we of course have changed our view and accordingly cut our target price to 275 bucks.
00:47:26 So I would say that's one of two things that has soured the mood even further.
00:47:31 Not that it was very positive overall, but has soured the mood even further on Paytm.
00:47:35 The second one would be what Governor Shaktikanta Das said yesterday in a press conference when asked about the Paytm issue.
00:47:42 He was very, very clear that those who are thinking there will be a review on the RBI's decision on Paytm are mistaken.
00:47:52 And as far as the Paytm related question you asked, we said that we will release a FAQ this week.
00:48:03 My request is that you wait for the FAQ.
00:48:06 And the decisions we take in Reserve Bank are very thoughtful.
00:48:11 For months, for one year, two years, we keep engaging any entity.
00:48:17 Be it a bank, a payment bank, an NBFC, a cooperative bank.
00:48:22 If we take action against anyone, I am not talking about Paytm, I am talking generally,
00:48:27 we interact with them for months, for years.
00:48:32 Sometimes we interact with them for two to three years.
00:48:35 When we don't see any effective action, we take action.
00:48:41 We have clarified this before.
00:48:44 So we have taken a decision after a lot of thinking.
00:48:47 And announcing, I mean, a review in 10-15 days,
00:48:51 what you said, the word review will not be appropriate here.
00:48:59 But I would also like to say that for the FAQ we are issuing,
00:49:04 you wait for it and then the difficulties for the customers.
00:49:11 Our priority is that the customers, the depositors,
00:49:16 they should not have any kind of inconvenience.
00:49:19 That is why we have given a month's time.
00:49:21 We took action on 31st January, 29th February, we have given a month's time.
00:49:26 The time has been given because the transition,
00:49:30 the customer interest, the depositor interest is always the uppermost.
00:49:36 So that is why we have given that time so that the customers and depositors
00:49:42 can take their decision and make the adjustment, the transition they want to make.
00:49:47 So very clear words over there reiterating that no deal or no laxity on Paytm.
00:49:54 Now, meanwhile, we'll talk about Aishwarya.
00:49:57 The Royal Enfield maker has announced its Q3 results.
00:50:01 Profits rose nearly 6% as compared to the expected 30%.
00:50:06 That is why you saw a bit of pressure coming in on Aishwarya.
00:50:09 It has recovered though from its dips.
00:50:11 Vinay joins us with more details.
00:50:13 Vinay, what has not worked for Aishwarya this quarter?
00:50:16 Yeah, Tamanna, so I would like to correct you a bit there
00:50:20 because the profit rose 34% on higher sales.
00:50:24 And this was driven by the higher sales of Royal Enfield
00:50:28 as well as the sales that they get through the VECV, that is the commercial vehicle arm.
00:50:33 So the commercial vehicle sales rose 14% to 20,000 units.
00:50:37 So if you look at the Royal Enfield sales, they rose just 3% in the quarter.
00:50:42 So if you can see, there was a contribution of price hikes as well in the revenue increase.
00:50:49 And as expected, the margin expanded because of the lower commodity costs.
00:50:53 And this could be a margin that could be high in terms of last three, four years
00:50:58 because 26% is a good margin for the company.
00:51:01 And if you look at the sales that I told you already, that 3% is a modest rise in sales.
00:51:07 And commodities are weighted on the demand for CVs and as well as the lower end motorcycles
00:51:12 that is down from 350cc for the company Royal Enfield that is there.
00:51:17 So analysts will await that what kind of demand outlook is there for the motorcycles
00:51:22 in the below 350cc segment and as well as in the commercial vehicle segment as well.
00:51:28 Understood, Vinay. Thank you for that.
00:51:31 Of course, Aishwarya coming out with a decent set, in fact,
00:51:34 a slightly better than what the street was pencilling in.
00:51:37 But the stock is trading lower, marginally lower now.
00:51:41 In fact, it was down 1% just a few minutes back.
00:51:44 But let me quickly take it to both our guests with regard to Oysher first.
00:51:51 And Soni, if you can give us your views with regard to Oysher on charts,
00:51:57 how are charts looking? What would you suggest to clients?
00:52:01 I think on charts, there was a resistance around 3950.
00:52:06 Today's high is also around that level. It was not able to cross.
00:52:10 So any fresh longs that has to be initiated must only happen above this level.
00:52:14 So above 3950, you can see some sizable short covering taking place up to 4020, 4050 odd levels.
00:52:20 On the downside, of course, the support was around 3800.
00:52:25 It has broken on intraday basis.
00:52:28 The closing is important. If it's able to close above 3800,
00:52:31 it can consolidate from this level to 3900, 3950 on a higher side.
00:52:36 So not a lot of movement can come, but until and unless either side of the range is not broken.
00:52:41 So just look forward to breaking above 3950, after which you can add your longs for targets of 4020, 4050 odd levels.
00:52:49 And once it has happened, I think if it just breaks above that level, then one can place a stop loss around 3900.
00:52:55 But as of now, it's just a wait and watch for the levels to come.
00:52:58 Right. Dharmesh, let me take it to you. Some amount of pressure forecasted with regard to CV.
00:53:05 Some commentary, of course, awaited. We'll have to wait and watch for that.
00:53:08 But Royal Enfield seem to be doing quite well. That's where a chunk of the margins come from.
00:53:13 Your views with regard to Ayesha?
00:53:16 Look at the quarterly numbers of Royal Enfield. That was not great as compared to say Bajaj Auto or Motor Power.
00:53:24 So the segments are not exactly comparable as of now.
00:53:27 But my own sense is Bajaj Auto looks to be a better option at the current market juncture because both the valuation wise, both are equally priced.
00:53:38 But the unwritten issues are also the same. The margin profiles are similar.
00:53:42 But Bajaj Auto has an advantage of overseas market picking up.
00:53:46 So if that picks up, it will definitely be in a better, in a sweet position.
00:53:50 Plus, there's a rollout of Triumph and Hero Motor Corp. Hyundai.
00:53:54 So that will definitely have some impact on the sales.
00:53:58 So 3% was what the quarterly run rate was there on the Royal Enfield.
00:54:03 And that for one or two quarters will be under some cloud.
00:54:06 The entire auto pack is enjoying the benefits of low commodity prices.
00:54:10 So the margins have been improving. That is likely to be seen.
00:54:13 Because this year also commodity prices are not going anywhere.
00:54:16 As of now, we're still at a year till date. They are down only.
00:54:19 So I think Bajaj Auto should be looked into rather than Aishwarya Motors on a relative scale basis.
00:54:25 Understood. Got it, Dharmesh.
00:54:29 Dharmesh, I also, while I have you, want to understand your views with regard to Paytm.
00:54:34 And how are you advising clients on their positions in Paytm from a slightly medium to longer term perspective?
00:54:41 How do you view the business on the back of recent developments that have happened?
00:54:45 Also, I want to try and also break down how you're looking at valuations.
00:54:49 Because Rs.130 in terms of cash that Paytm currently holds per share versus the Rs.380 stock price.
00:54:57 How should one look at this business now?
00:55:00 So I mean, Tamanna, maybe she remembers, last week, same day, we were having the same conversation.
00:55:08 When Paytm hit the low circuit and was recovering that day very fast.
00:55:13 So my take was, I was never a buyer in this business.
00:55:17 And whichever clients come for advice, we have said very clearly that this is not a sustainable business model.
00:55:25 And after the developments, which have happened, of course, this financial, but DSA was the thing which was being the turnaround for Paytm.
00:55:32 And that is where the maximum profit contribution was coming from.
00:55:37 And that has now gone for a toss.
00:55:40 I mean, if you hear Mr. RBI's governor, Mr. Siddiquanta Das, he was very clear in sounding out the word transition.
00:55:48 So the moment you said you are giving clients or customer a time period to transit yourself,
00:55:54 that means that business itself is likely to be locked down completely.
00:55:59 I mean, and they said that it's months and years of a procession which has happened over a period of time.
00:56:05 So again, this is too blatant noncompliance, which has happened over a period of time.
00:56:12 And I admire the courage for such kind of a noncompliance to be there for such a long period of time.
00:56:19 So this business is now on a shutdown space.
00:56:22 Coming on the valuation point, you pointed out right now that 130 rupees is the cash in the balance sheet.
00:56:28 To my mind, that's the valuation of the Paytm, which should be happening.
00:56:33 All right. Dharmesh, I do remember that conversation on Paytm.
00:56:37 And yes, you were absolutely very clear that you wouldn't go anywhere near it.
00:56:43 I mean, actually, I wouldn't even ask Soni her view on it because fundamentally it seems to be in trouble right now.
00:56:51 You would agree, Soni?
00:56:53 Absolutely, Tamana. I think white in sync with the technical and derivatives rules.
00:56:59 All right. Meanwhile, the story this afternoon is a recovery that we saw building up midday as well,
00:57:07 which is the one in public sector stocks.
00:57:10 And this has been a conversation we've been having on NDTV Profit.
00:57:15 In fact, if you tuned in this morning, we also saw how you will see perhaps some recovery.
00:57:21 Maybe we've gone into oversold territory.
00:57:23 There will still be pockets of pain. But, you know, even as we speak, the Nifty PSE not doing too badly at all.
00:57:32 NLLC is having a great day. NHPC, Cochin Shipyard, all of them doing fairly well this afternoon.
00:57:41 So that's one big theme that you're seeing. The other one would be banking.
00:57:46 Banking stocks also having a good day. The pain points, though, continue on metals.
00:57:52 And yes, the drag is coming from Hindalco. But even if you see a sale and NMDC and NALCO,
00:57:58 all of them showing that kind of listless day completely.
00:58:04 Soni, I just want your take on some of the metals names. And this has been an unclear territory so far.
00:58:12 Is there anything that you would pick at this point?
00:58:15 I think metals, you know, we've seen the stocks had actually picked out quite well, a lot of stocks,
00:58:22 but perhaps because of a peer impact like Hindalco's results, you know, we've seen some stocks coming out to a good correction.
00:58:28 So from the current level, Tata Steel is a very good pick. So Tata Steel, it has made a low of 134.
00:58:35 130 is its main support. So any small declines from current level till 136 can be bought.
00:58:42 Keep a surplus of 130. It should bounce towards 145, 148 once again.
00:58:48 So I think for a better pick would be Tata Steel for the pack.
00:58:52 Tata Steel is the pick of the pack for Soni. But thank you so much, both of you,
00:58:59 Soni, as well as Dharmesh, for giving us your views through the show today. Thank you for that.
00:59:05 We're very close to closing and let's quickly have a look at where markets are really settling at close today.
00:59:10 There you go. The Nifty Bank is leading the pack 1% higher, but the Nifty 50 up around three fifths of a percent or thereabouts.
00:59:18 We'll have that number shortly in front of you. And, you know, when I'm looking at the broader markets as well,
00:59:25 very little to complain about, especially where, you know, we're very close to close and there you go.
00:59:30 Broader markets too doing fairly well after a tough day.
00:59:34 It's been a bit of a flip flop, a third of a percent higher on both the Nifty mid cap as well as the Nifty small cap indices.
00:59:41 Let's have a look at the heat map to see where we're settling in and what the pockets see.
00:59:46 There you go. The breadth of the market, especially on the benchmark, looks quite good.
00:59:51 You're looking at just about 13 to 15 stocks in the decline.
00:59:55 But outside of that, it's led by Coal India UPL. Some of the stocks which have suffered both last week as well as this week.
01:00:02 ICICI Bank is doing fairly well in trade. There you go. Markets have closed.
01:00:07 We also have two banks, ICICI AXIS, which have done fairly well.
01:00:12 Let me also pull up the list of contributories to try and get more perspective as to where the gains have come from.
01:00:18 ICICI Bank, there you go. Reliance Industries has done fairly well, even though it's been in the green through the day.
01:00:25 Fairly decent day for Reliance as well and AXIS Bank and Coal India leading the pack.
01:00:30 Among the drags, Hindalco was the key drag. Drag markets by around 25 points out of 43.
01:00:36 That's a major chunk which Hindalco has taken. Let's also have sectoral indices to quickly get more perspective.
01:00:43 There you go. The FinNifty is what has driven markets higher and the Nifty PSE.
01:00:48 Let's mark out those two. Let me first pull up the Nifty Bank and its constituents, if we can do that very quickly.
01:00:56 There you go. You have PNB, AXIS, ICICI, all of which are in the green, only Bandhan and AU were in the red.
01:01:02 Now, if we can have the Nifty PSU Bank to give it more perspective and angle.
01:01:06 And what you'll realize is the Nifty PSU Bank was a shade of green today, except for probably Indian Bank and UBI,
01:01:13 who had pretty much all banks trading in the green, which is a positive again after what we saw yesterday.
01:01:19 That's definitely a positive. And last off, let me pull up the Nifty PSE basket to kind of highlight.
01:01:26 There you go. You have the likes of NHPC, Coal India, Engineers India, REC recovering very, very well.
01:01:31 Two and a half percent plus in terms of gains on all of those. NBCC sale, BHEL and sale on the back of numbers.
01:01:39 A bit jittery, but otherwise you've seen a decent day from the PSE pack.
01:01:43 But that's all that we have for you on India Market Close today. We'll see you tomorrow morning, of course, as markets open.
01:01:51 But for now, from all of us who put the show India Market Close together, Tamannah myself.
01:01:56 Thanks so much for watching.
01:01:57 [Music]