Citi downgrades MGL on regulatory margin risk.
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew on Ask Profit. #NDTVProfitLive
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew on Ask Profit. #NDTVProfitLive
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00:39 Good morning and thanks so much for tuning in. You're watching Ask Prophet on
00:42 NDTV Prophet. My name is Alex Mathew. We'll get you answers to all of your
00:46 stock related questions, whether they're short term or in fact long term on this
00:50 particular program. You see the number on your screen, that's where you can send
00:53 your questions to us or in fact on any one of our social media platforms. Without
00:58 further ado, let me take you through what's happening with the markets right
01:01 now and you're seeing quite a bit of a crack in the broader end of the markets.
01:04 But first, let's talk about the benchmark Nifty 50. It's trading with cuts of
01:07 about a third of a percent at this juncture and not too far away from the
01:11 low point of the day once again. Quite a bit of chop and churn. Of course, this is
01:15 pretty much the picture across the globe where you have risk assets that have
01:18 taken a bit of a backseat in trade today. But the selling is concentrated at the
01:24 broader end of the spectrum where you have the mid cap 150 index that's down
01:27 about a percent and a half at this point and very close again to the low point of
01:31 the day and the small cap index is losing 2.4%. So, very clearly the advance
01:37 decline ratio tilted very firmly in favor of the declines right now and quite a bit
01:42 of selling in the market right now. That's not how the session started today.
01:47 Among the key indices that you should focus in on, IT continues to lose ground
01:52 but media is the worst of the pack today losing over 3%. Realty also losing about
01:57 2% or thereabouts. Metals is down 1.8%. Pretty much all of the major indices
02:02 losing ground. Nifty Bank making a bit of a comeback and in fact trading with
02:07 gains of about 9/10 of a percent right now. A few of those names shrugging off
02:12 the action in the regulatory space. Of course a few of those names continue to
02:17 be in focus from the financial pack. IFL loses ground today as well and you have
02:22 JM Financial which has been one of the focus areas for us the day so far.
02:29 That's losing about 17% or thereabouts. But let's focus on a particular stock
02:35 and this is a segment that I like to call Ask Profit Focus. We are talking about
02:40 Mahanagar Gas today because it's also losing ground down about 15% as we speak.
02:45 The company has cut prices of CNG by about 2.5 rupees per kilogram in and
02:51 around Mumbai and there's also been a couple of brokerage notes on this
02:56 particular counter. Mihika is joining in to give you some perspective on that.
02:59 Mihika, quickly what are the key takeaways here?
03:02 Yes, so first one is CNG prices are cut by Mahanagar Gas in Mumbai by 2.5 rupees
03:07 per kg and they are now at 73.5 rupees per kg effective from today.
03:12 Second, we have a city note which has downgraded its rating on Mahanagar Gas
03:16 to a sell and cut the target price by 5% to 1,405 and this is mainly on
03:22 regulatory risk to its margins. Now the Oil Minister at the latest
03:25 industry event stated that the gas companies are not passing on the full
03:29 benefit of the reforms to the end consumers and they are willing to take
03:32 drastic steps in order to ensure full benefit. Additionally, the Petroleum and
03:36 Natural Gas Regulatory Board had also announced that they're going to set up
03:39 an expert level committee to look into the existing framework.
03:42 What this basically does is creates a potential overhang in terms of
03:46 sustainability of the company's margins. Why Mahanagar Gas has the most to lose
03:50 is because it is more susceptible to the regulatory framework because
03:54 per unit EBITDA trades at a premium. According to Citi, the current EBITDA
03:59 margins for Mahanagar Gas stand at 13 rupees per standard cubic of meter of
04:04 gas whereas Indraprastha Gas and Gujarat Gas peers stand at rupees 8 and rupees 5.
04:09 Thanks so much for laying the context for this chat, Meeka. We've got Saurabh Jain
04:14 of SMC Global Securities and Kunal Rambia from The Street joining in
04:18 on today's conversation. Gentlemen, thank you so much for taking the time.
04:22 Good morning to you. I'm going to start with you, Saurabh.
04:25 Question on MGL. It's down in the dumps today and in fact as you just heard
04:30 it's on account of that price cut. What do you make of the stock?
04:34 What would you do if you currently hold it and if you don't, would you buy into it?
04:38 Hi, good morning. See, in the last quarter also there was some kind of a pressure
04:44 on the margins with respect to the earnings of the MGL. There was lower APN gas
04:49 that was coming to the MGL and they also resorted to price cut in the month of October 2023.
04:54 About 3 rupees per ton. And after the statement of Petroleum Ministry that
05:00 these companies are making maximum benefit out of their reforms and after that
05:05 MGL cutting down the prices, it clearly shows that there is going to be a huge amount
05:10 of pressures on the margins and the margins which these companies were enjoying
05:14 will not be in the future. And that is what the market is reacting to.
05:18 If one is holding onto the stock at the current prices or making some profit
05:23 or even doing emotional loss, I think it is better to get rid of the stock.
05:26 So it's a clear sell.
05:28 Got it. Alright, it's time to jump into the queries and we've got several
05:33 that have already come through. I'm going to start with one from Hari.
05:37 He's writing in from Mumbai and he's asking about Persistent Systems
05:40 which he's holding 400 shares of which he's bought at levels of 4200
05:45 and he's wondering whether to continue holding. Kunal, I'll come to you on this one.
05:49 On the charts, how does it look?
05:51 Good morning Alex, good morning to everyone.
05:53 So if you look at the overall formation on the chart of the daily chart
05:56 of Persistent Systems, this counter is clearly making higher top,
05:59 higher bottom formation but here the specific observation is on the 23rd of June
06:04 this counter gave a gap of open and that gap is getting filled today
06:08 which is a very negative sign. So by any chance if the counter slips below
06:11 7900 to 7850, I think it's going to be a clear sell.
06:17 So for now one can hold on to the position with the stop loss of around 7900.
06:22 If the counter breaks below 7900, I think he should take the profit off daily.
06:27 Alright, let's talk about IRB Infra and this next question is coming in from
06:32 Prince Samson, he's writing in from Coimbatore in Tamil Nadu.
06:36 He's bought at levels of 61.99, nearly 62 rupees.
06:41 The stock is trading lower by about 3.5% in trade today and just about that 60 level mark.
06:46 So not too far away. He's looking to hold for at least a year.
06:51 So Saurabh, based on the fundamentals, would you hold on to this one?
06:55 I think all the infrastructure players will do good in the future,
06:59 especially after the election, centre election.
07:01 I mean there are few orders which are coming before the elections
07:04 and after that it is expected all the backlog will get compensated going forward.
07:10 So I think infrastructure players will make a decent amount of money going forward
07:15 and if you have a horizon of one year, I think it is a clear.
07:18 Alright, this next question is coming in from Germany.
07:24 We've got Abhishek who has joined in and he's asking about Baloo Forge.
07:31 Let's try and pull up this chart in fact and see where it's currently trading.
07:34 He's saying that he's bought at multiple levels and he's bought all the way from,
07:41 starting from levels of 50 and he's saying that the share went all the way up to 300.
07:45 He booked some profit. Now the price is corrected to around 200.
07:49 Let's see where it's currently trading.
07:51 Not too much in the way of volumes from what I can see, right?
07:55 He has 400 shares left. Kunal, what should his strategy be?
08:00 Alex, being very honest, I saw this chart itself for the very first time.
08:04 But if you look at the formation, the final rally I think started somewhere in August
08:09 when the counter gave a breakout of 195 and from there it went up to 310-320 levels.
08:14 It is off to those levels again. So the strong support which I can see on the chart is 195.
08:19 Though as you mentioned correctly, the volumes are very thin.
08:22 One needs to be a little cautious but I'm playing on the trend.
08:25 So far the trend is intact for the longer chart.
08:28 If the counter manages to break this 195 decisively,
08:32 then I think he should take the complete profit from the counter.
08:36 But if the counter manages to hold 195 and consolidates at the present level
08:40 and if it continues or resumes its previous rally,
08:43 then I think one can hold on for a long period of time.
08:46 The next count is in Polycab. We're talking about Polycab.
08:50 We've got Shri Kishore Sharma from Motihari in Bihar who is also talking about HUL.
08:59 He's looking at two counters here. Polycab he's bought at levels of 4700 for a period of 3 years.
09:05 Hindustan Unilever he's bought at levels of 2400.
09:08 Again, the perspective is for 3 years.
09:11 He's holding a reasonable quantum of both of these.
09:15 Saurabh, on the fundamentals therefore, what is your view on Polycab as well as HUL?
09:20 I think a few days back we heard some corporate governance issues with respect to the Polycab.
09:24 It stopped and down below 4000. Now it is pretty close to 5000 only.
09:29 I think it is better to get exit whenever such news crops up.
09:33 With respect to the HUL, I think the earnings growth is quite meager with respect to the valuation.
09:40 I would rather suggest to shift money from the FMCG major to the banking major like ICICI or NCIS.
09:47 Alright, fair point. We've got several more. I'm going to pull up the next one.
09:52 This one is from Karthik. He's writing in from Visakhapatnam.
09:55 He's asking about Scient and whether or not it can be bought at the current price.
10:01 Let's pull up the chart and see where it is currently trading.
10:04 It's down about 2% in trade. Let's pull up the slightly longer term charts and see how the trend has been.
10:09 It's about 1,915. Kunal, on the charts, what does it look like?
10:14 What are the key levels to watch out for and would you buy the current market price?
10:17 So, Alex, the high of September 2023 was 1900.
10:21 This counter managed to cross that 1900 mark somewhere in November.
10:25 And it made a high of around 23-2400, retesting the same level again twice after getting the breakout.
10:32 Now, this seems to be like a distribution.
10:34 So, by any chance, if the counter breaks this 1900 mark on the lower side, I'll turn extremely cautious.
10:39 In fact, that would be the time to short such kind of formations.
10:42 So, for now, I'll stay cautious. I'll advise him to keep an eye on 1900 marks.
10:47 If the 1900 is taken out, decisively it's a sell.
10:50 But by any chance, again, it consolidates and resumes its previous rally, then yes, one can hold on and add even more.
10:56 All right. The next question is coming in from Mohit.
10:59 He's writing in from Ludhiana and he's asking about shipping corporation of India, which is about a level of 39.4.
11:06 And he's wondering about this SCI land and assets development, the disinvestment and the value unlocking that has been planned.
11:16 He's been holding for quite some time seemingly and he's planning to hold this particular shipping corporation of India for the next couple of years.
11:23 What should his strategy be? He's making quite a bit of a sum on this particular, I don't want to call it trade, on this investment, Saurabh.
11:32 I don't think that he's in a hurry to sell. So, what should he bear in mind?
11:36 If you have such a long period in mind, like you can hold in for the next two, three years, I think you can certainly hold it.
11:44 A lot of factors have already been, I mean factors like monetization of the land bank and all things have already been discounted in the stock price also.
11:53 But I think, but still money is to be made for the next two, three years. So, it's a hold for the time being.
12:00 Got it. All right. We've got Sudarshan. Oh, he's asking about, I believe the question is, yeah, Rolta.
12:07 Let's pull up Rolta and let's see where it's currently trading. He's asking whether or not it can be bought at the current,
12:16 no, he's holding 200 but he's not given us what level he's bought at. Let's pull up the chart and see where it's currently, oh, okay.
12:22 I'm guessing, gentlemen, the advice would be to get out of this if you possibly can.
12:26 Right now, I don't think that there are any buyers in the stock. What's the advice? Saurabh, I'll come to you.
12:33 Not in coverage. Not in coverage. Kunal, any advice that you can give the gentleman here?
12:40 So, even I'm seeing this chart after a pretty long period of time. I think it's in upper circuit right now, showing us the 4% upper circuit.
12:46 But the problem is going to be how to exit even if it's in down circuit. So, take an exit from this counter.
12:51 Sit on cash. I think good opportunities will be available very soon when we see some kind of correction.
12:56 Reinvest at that point of time after taking the advice on NDTV again.
13:00 Yeah, fair point. I misread the flat line. I looked at it as a lower circuit. Apologies.
13:06 Jayakrishnan from Coricode is asking about Ultratech Cement and whether or not it can be bought for the medium term and whether it should be bought today.
13:13 Kunal, I'll come to you on this one. And I would also like to get a view from Saurabh on the fundamentals because it's an interesting play.
13:20 Kunal, first on the charts, how does it look?
13:23 So, from December so far, this counter was consistently taking support of 9700 and today is the day where it's the first time it has given a breakdown just before the show itself.
13:32 It gave a breakdown. So, I have also shortlisted this counter from shorting point of view from this level.
13:37 So, certainly it's a no to buy at this level. By any chance, in next two to three days, counter manages to reclaim 9700 mark, then yes, it can be bought with the recently made low as a support, as a stop loss.
13:49 And then the target can again be, you know, those 10,000 marks. But otherwise, I would avoid this counter for now.
13:54 Got it. All right, gentlemen, do stay with us, viewers as well. We have to slip into a very quick break, but we've got more time on the other side to take your questions.
14:04 We'll be back before you know it.
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17:06 Welcome back. You're watching Ask Profit. And we're in the midst of the query segment. We're taking the next question from Pranav Singh. And he's asking about Coal India.
17:16 He's wondering whether to buy at the current market price for the next couple of months, one to two months, in fact. Kunal, what's the view on the charts?
17:26 See, again, Alex, the trend is very much in tact and the counter has sustained nearly above 435, which seems to be a good support since last two to three months.
17:34 So till the time this counter is above 430, I think one can keep on initiating a buy with a buy on dip kind of strategy. Not at the present level, I would really advise him to buy.
17:43 If the counter to reach 440 with the stop loss of 430, then one can initiate a buy. And I think the trend might just continue even longer.
17:50 But by any chance, if the support is taken out, take an exit because that might turn out to be like a distribution pattern and we might see a sharper connection.
17:57 Got it. All right. We've got Shraboni, who's writing in from Kolkata and asking about CIE India. And that's been bought at levels of 487.
18:08 Let's try and pull up the chart and see where it's currently trading. It's CIE Automotive and it's trading at about 442.
18:15 So lower than the buy price. They haven't given us the time frame.
18:20 So Saurabh, assuming that this is not necessarily a short term trade, what would you do with this one?
18:28 I think all the OEMs are doing very good and the auto insularities are expected to do even well.
18:33 CIE is a good play, is a good proxy for the auto insularity. I think one should hold this stock.
18:39 All right. We've got Sagar, who's asking this question and he's asking about a combination view on TVRI NOX.
18:49 He's, okay, this is an interesting one. So this one's for you, Kunal. I'm going to read this out.
18:54 So this is for you, Kunal. So this is for you, Kunal. I'm going to read this out.
19:14 So the first question is on the F&O space, Kunal, on the strategy there.
19:19 And then I'll come to you, Saurabh, on the fundamentals of PVRI NOX. So first on the F&O.
19:25 See Alex, this counter is near to 52 weeks low. If you look at the historical data, May 2023, the counter made bottom at around 1350.
19:33 After that we had July 2023, where again the bottom was 1350. And it's been now almost a month.
19:39 This counter is consistently above 1350. So for now, if he's already shorted at a very good levels,
19:45 I think this is a time to cover the shorts and wait for the breakdown. If the counter manages to break below 1350 decisively,
19:52 I think definitely one can further short the counter with the stop-loss of 1450.
19:57 But for now, because it's struggling to break that low and the volumes are also now very low at the extreme low end,
20:03 I think this is a time to book the profits, sit on cash. And if there is a further decline, one can short.
20:08 Understood. Saurabh, PVRI NOX, interestingly, over the last few months, we've had several hits and box office collections have been nothing to sneeze at.
20:18 So there seems to be a bit of a recovery, at least in terms of the offerings available.
20:22 Is that argument of, you know, traction moving away from the screens to the home viewing still ongoing?
20:30 Or do you think that there is still scope for these, for PVRI NOX?
20:35 I think after the merger, there was a buzz that this company will surely make a killing in the market.
20:41 I mean, growing in terms of revenue and profitability. But the attraction to the OTT is actually making an input.
20:47 If you see the December numbers, December earnings, they were really, they disappointed the street.
20:53 And after that, also, I think from the next few quarters, the current pipeline of the movies doesn't seem to be too strong.
21:03 So in that sense, I think the stock is, you know, seeing consistent selling and is underperforming the burses.
21:11 So I think it will continue to happen in this fashion.
21:16 Fair point. All right. The next question is from a viewer that hasn't shared their name.
21:21 So just a quick reminder, if you're writing to us to let us know what your name is, ideally where you're tuning in from.
21:27 It's always good to hear the various places that this show is reaching.
21:31 The question is on JM Financial and arguably one of the stocks of the day because it's down quite significantly on the back of that RBI action.
21:39 The viewers bought at levels of 92 and asking whether they should book losses at this particular juncture.
21:45 Saurabh, you've probably seen the regulatory action. You've seen the response from the company.
21:50 You've seen this stock reaction. What's the view on this particular one on the basis of fund metals?
21:55 Should you exit? I think the action has come on the 30 percent of the profitability from the segment from where the company was getting 30 percent of the profitability, if I am correct.
22:07 So I think it is a bad news for the companies and the operations.
22:11 So in my sense, I think it is better to exit. All right.
22:15 Srinu from Vijayawada has got the next question asking about Reeves Cotton.
22:19 He's got 300 shares at levels of 162. Can he hold and add more the current market price?
22:24 Kunal, what's the view on the charts?
22:26 Well, it's certainly no. This counter has not done much since May 2022. It's been almost two years.
22:32 This country is going in the zone of around 130 to 170. In fact, right now it's in between, which is at 143.
22:38 Let's not try to catch the falling knife. Let it settle on somewhere near to 120 where the risk reward ratio would be favorable.
22:44 Advice would be to revisit and approach the counter again when it reaches that 130, 125 kind of mark where the risk reward ratio would be favorable for longs.
22:53 Okay. Another question coming your way, Kunal. Heads up, this is in the future space. HDFC Life is one.
22:59 And by the way, this is a question coming from Harsha Vardhan.
23:02 He's asking about HDFC Life May future. The price is 619 and I believe this is one lot.
23:12 What's the strategy here?
23:14 Formations, the count is on the verge of doing breakout. In fact, we have also shortlisted this counter.
23:20 I'm just waiting for the counter to give a close. I'm talking about the present futures, which is trading at around 616 right now.
23:27 I'm waiting for the counter to give the breakout of 620. About this, the double bottom formation is getting activated.
23:33 So with the surplus of 600, one can expect the targets of 660 on HDFC.
23:38 And along with HDFC, ICICI Prudential is also looking equally good.
23:41 So this entire insurance space is showing good traction in this falling market.
23:46 So yes, it's a clear thumbs up on this counter too.
23:49 The second counter is Wipro. And he's looking to sell or he's selling April future at a price of 514.17.
23:57 And this is two lots. What strategy should he employ here?
24:01 With the surplus of 515, hold on to the shorts. I think this counter can again show us the levels of 475, 480 very soon.
24:08 So it's again a clear thumbs up on the short side for Wipro.
24:12 All right. We've got Lakshmi Narasimhan from Chennai who's asking about ITI.
24:17 Let's try and pull up the stock and see what it's currently doing.
24:20 He hasn't mentioned the time frame. And by the way, viewers, if you'd like to have a specific answer on this,
24:25 whether it's long term or short term, do specify what you intend to hold the stock for.
24:30 I'm going to assume that this is a fundamental question.
24:32 Saurabh, any view on ITI and would you suggest a fresh entry?
24:36 Would not be able to comment.
24:37 Okay, fair point. So that makes my job a little easier. Kunal, what's the view on the charts then?
24:42 Since October till now, this counter is clearly making higher top, higher bottom.
24:47 But it's the first time counter is reaching the previous bottom of February 2024, which is 280.
24:52 So by any chance if the counter slips below 280, which is just 4 rupees away from the present level,
24:56 I think one should take the profit off table again.
24:59 But if the view is pretty long, I would still suggest exit below 280.
25:03 And the view will get negated if the counter manages to cross 295 on the higher side.
25:08 Okay, Dr. Jamkar from Pune is asking this next question.
25:13 He's asking about Titagar Rail system or rather Titagar Wagons, right?
25:18 Titagar Rail. This is a counter of course that has seen a tremendous run up.
25:23 It's down in trade today. But the question I guess a lot of investors are asking is
25:28 what is the kind of upside based on the spending that the government has in the railway space?
25:32 Do you have specific coverage on this, Saurabh? And if so, what's the view?
25:36 I think the company has good order book and the government spending is even good in this industry, in the railway sector.
25:44 But most of the good news and the order book have already been priced.
25:49 Look at this stock, it is spreading at 12 times to book value.
25:52 I mean, the earnings have yet to follow, but the stock price have already gotten up.
25:56 I have already shoot up. So in my sense, I think it's better to take some money, some profit off the table.
26:03 All right. Take some money off the table as a view on Titagar Rail.
26:07 It's run up what 250 percent over the last one year or so.
26:12 Let's talk about Shivram's question. He's writing in from Hyderabad and he's asking about Jubilant Food.
26:18 And the price is 485 that he's bought at. So a little above his current, above the current market price.
26:28 The question is for you, Saurabh, on the fundamentals. I think a lot of people have spoken about the propensity in cities like Mumbai of people going beyond the brands that Jubilant is operating.
26:42 And maybe to a certain extent, the company seeing pressure on that end.
26:46 Is that any concern at all or would you say that you can hold this counter for the long term without any tension?
26:52 I think these concerns are very much, they can be easily seen on the operational side of the company.
26:58 I mean, on the operational side, you can be numbers and the company is finding very difficult to grow the revenue, the same share stores grow, the profitability and all.
27:06 And that is why I think the stock is standing. In my sense, I think it is a set.
27:11 All right. Gentlemen, on that note, that brings us to the end of this particular edition of Ask Profit.
27:16 It's been an absolute pleasure having you with us and answering all the questions that you did.
27:20 And viewers, it's been my absolute pleasure bringing you this show.
27:24 Hopefully, the answers that were discussed on this particular platform helped you even if your specific question was not answered.
27:31 We'll be back tomorrow at the same time to take your questions.
27:34 Do stay tuned. Lots more coming up on NDTV Profit.
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