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00:00 Siddharth Khemka is joining us now of Motilal Uswal Financial Services.
00:04 And Siddharth, great to have you on the show.
00:06 You know, this is a time when the markets are also wondering what is happening next.
00:12 And you reckon that the primary driver of that uncertainty, perhaps,
00:17 is the way that FIIs have been behaving.
00:20 If you pull up data and if you look at the kind of FII fund flows over the last 8-10 days,
00:25 especially in May, they have been triggering the sort of sell button.
00:31 And do you think that's the primary concern right now?
00:33 Yeah, very good afternoon, Tamanna.
00:36 So I think, yes, that is one of the concerns that the market is definitely witnessing.
00:41 If you look at FII selling was there in the previous month,
00:46 entire month of April, we have seen consistent selling by FIIs.
00:50 And we saw in between the weeks falling to as low as 10 and now top jump towards 18.
00:59 Clearly, there are two major events that Indian investors are looking at.
01:04 A was the what was the Fed commentary and outlook in terms of the interest rate cut,
01:10 which unfortunately is getting delayed every meeting.
01:16 And then you have the ongoing elections and the news flows regarding the
01:21 voters turnout and the likely outcome based on certain predictions.
01:27 So I think these two major factors are driving investor sentiments in India.
01:31 FIIs definitely, I think the delay in rate cut is making them book profits,
01:38 A, because of the delayed rate cut and B, because of the big event
01:42 which I think there is some lightening of positions that they are doing in the Indian markets.
01:46 Siddharth Khemka, I just wanted to get your view, not just on a Bank of Baroda,
01:50 but we've seen State Bank of India, Punjab National Bank,
01:53 you know, your PSU banks have been the darlings of the street.
01:58 Do you think the quarterly numbers have justified that prime position?
02:01 So Tamanna, I think if you look at some of the other numbers as well,
02:06 maybe if you also include Canbank in the list,
02:10 there has been definitely a dismal number that has come in,
02:13 especially on the front of the slippages and the provisions.
02:17 Luckily, SBI, which is the largest, had lower provisions compared to expectations.
02:23 And hence, I would say that clearly among the lot was much better numbers
02:30 compared to PMB, Canbank, now Bank of Baroda.
02:34 And so we have seen a lot of delineating that has happened.
02:39 And a lot of improvement in the quality of earnings
02:43 for the PSU banks over the last one and a half, two years,
02:46 and that has led to the re-rating.
02:48 So there could be one or two quarters of blip,
02:50 but I believe with the economic growth and the focus of these banks
02:55 to improve the operational performance,
02:58 the overall view on PSU banks continues to remain positive.
03:02 And again, I said there could be one or two quarters of blip in the reporting,
03:07 but overall view is positive.
03:09 We prefer SBI, which is the largest of the one,
03:11 very strong numbers, the report and the outlook is decent and positive.
03:18 And even internally, we were discussing in the morning meeting
03:22 why SBI cannot trade at a valuation which an Axis bank does.
03:27 Definitely ICICI and HDFCs of the world trade at a very high premium,
03:31 but an Axis at two times and SBI at one and a half times,
03:36 given similar growth and similar return profile,
03:40 the discount is no longer warranted is what we believe.
03:43 And we believe over the next two, three years with the improvement
03:46 and consistent delivery and growth,
03:48 and SBI could also command such kind of valuations going forward.
03:52 Okay. Well, that's SBI, PNB, BOB and a clutch of those names.
04:01 You know, today what has recovered remarkably is Asian Pains.
04:05 For all the brick bags that is received from brokerages,
04:10 the stock has certainly gone up in trade two and a half percent.
04:13 So some semblance of sanity after the massive gashes that we saw yesterday
04:17 and day before as well about a couple of percentage points off then too.
04:21 But in today's session has recovered.
04:23 Siddharth, you would use this opportunity to buy into an Asian Pains
04:26 or you believe there's some pain there?
04:28 Yeah, Neeraj, we would definitely avoid Asian Pains.
04:33 We believe there is a near-term pain.
04:36 The numbers were clearly a miss.
04:38 We see margins pressure in FY25 going forward as well.
04:43 There has been price cut.
04:45 There have been demand pressures because of down trading and competitive pressures.
04:49 And we believe that the current elevated margins may not sustain in the near term.
04:55 And given the low growth that the company is reporting
05:00 and the high valuations, historical high valuations,
05:02 clearly it's an avoid at current juncture.
05:05 Okay.
05:07 Kunal, quick word here.
05:10 Asian Pains, there is also some gains, for example, today in a Hindalco,
05:16 which has recovered a little bit of lost ground.
05:18 So some of these stocks are doing well today.
05:20 Any thoughts?
05:21 Asian Pains in particular?
05:23 I think on Asian Pains, if I talk about,
05:25 I think the stock is on the verge of a near-critical support, 2700.
05:30 And we have seen the stock on a weekly chart bouncing from those levels.
05:34 But looking at the overall trend for the stock, they're still trading in a downtrend.
05:38 So for me, if the stock has to turn bullish, it has to surpass again 3000 decisively.
05:43 If that is taken out, you can see momentum building up towards 3200 mark.
05:48 At the current level, I will not be a buyer.
05:50 I'll wait for the breakout above 3000.
05:52 That will negate the entire downtrend.
05:54 And then we'll see the up-no-coming.
05:56 Okay.
05:58 Speaking of Asian Pains, by the way, Amit Singhal,
06:00 we'll try and hear from Amit Singhal as well.
06:05 He spoke to my colleague, Agam, and spoke about what's happening there.
06:08 But I buy Tamannaah's point on what has really gone berserk, and that's Hinzinc.
06:14 That's up 17% now.
06:16 It's hit a fresh 52-week high of 533.7.
06:19 Also, also all-time high, by the way.
06:21 Also all-time high.
06:22 Similarly for Zomato, all-time highs.
06:25 And that stock is not up 16%, yes.
06:27 But it's done really well for itself.
06:29 So Zomato is doing well.
06:31 And by the way, what has also hit the highs today are gold and silver.
06:35 You know, so my theory this morning, I don't know.
06:39 I will probably see a tweet at some point from the Blinkit management.
06:43 They usually do about how many XYZ gold coins they, you know, have sold online.
06:49 But 10-minute deliveries for Akshaya Trithya,
06:52 for gold coins on Blinkit.
06:55 And of course, all the others are doing it.
06:57 They're not all listed, though.
06:58 So I wonder, I wonder if people are really using this opportunity.
07:02 I mean, the variety of things you can buy in 10 minutes now is insane.
07:06 So maybe that's, you know, doing well for Zomato.
07:10 Siddharth, something that you track, Zomato?
07:14 Any views there?
07:14 Yeah, Daman, so we definitely track Zomato.
07:20 It is one of our preferred picks within the mid-cap space and has done quite well.
07:23 I think the road to profitability is something that clearly was liked by the market.
07:27 And off late, what has been, what the investors have been liking is the sharp
07:33 improvement in the operating metrics for Blinkit.
07:35 This was one acquisition sometime back.
07:37 People were very negative about investors specifically,
07:41 about Zomato going and buying stake in it.
07:44 But now the private equity valuations for Blinkit
07:48 shows that it is valued much higher than the Zomato itself.
07:52 And the profits from Blinkit could be much higher than,
07:56 the contribution to profit could be much higher than the Zomato's food delivery business.
08:00 So the quick commerce business is something that is really picking up
08:04 with the company increasing the platform fees and which is well accepted by the market.
08:10 I think that is a sustainable way of growing the delivery business in India.
08:15 And definitely it fascinates how these companies are able to deliver
08:20 within 10 minutes in large cities like Mumbai, Bangalore, Hyderabad and the like.
08:25 So overall business-wise, I think...
08:28 Siddharth, did you order gold coins online today?
08:31 I don't know about that.
08:34 I just heard from you.
08:35 I will definitely ask my wife to go and deliver right away.
08:40 Yeah, I mean, why not?
08:42 Because if you want to follow that tradition and you don't have time in a workday,
08:48 then definitely it's an option.
08:51 All right, it's going to be an exciting sort of Friday evening.
08:54 That's the kind of thing that you want to spot as well,
08:58 because auto majors Tata Motors and iShare are set to report their Q4 numbers today.
09:03 Definitely exciting evening for Puneet, who tracks that sector.
09:06 Puneet, what's the preview?
09:08 Yeah, exactly.
09:09 A lot of action today on the auto side and both these results are expected to be positive.
09:16 Starting with Tata Motors, they're expecting a revenue growth of roughly 15%,
09:19 coming in at 1,20,000 crores.
09:22 While on the EBITDA basis, we are expecting EBITDA to come in at roughly 17,400 crores.
09:28 Margins are going to be one of the key positives for Tata Motors today,
09:31 coming in at roughly 14.4%,
09:33 which is a rise of roughly 220 basis points compared to the previous year.
09:39 While on profitability, it's expected to come at close to roughly 7,000 crores,
09:44 which is a 25% gain from the previous year.
09:47 For iShare Motors as well, we're expecting strong results.
09:50 Revenue growth of roughly 13%,
09:52 while EBITDA is expected to rise to roughly 1139 crores,
09:56 with margins coming in close to 27%, which is also a 200 basis point rise.
10:02 For profitability, it is expected to rise 18% for iShare Motors,
10:07 coming in at roughly 1,068 crores.
10:09 We also looked at what brokerages are saying for both companies and things to look out for.
10:14 So for iShare Motors specifically,
10:17 Axis sees that revenues will rise on the back of strong volumes that the company has reported.
10:22 They also see that increase in average selling price
10:25 due to price increases taken in the last one year will aid margins.
10:29 While EBITDA, supported by a lower mix of Hunter, which is in the 350cc space,
10:35 as well as a higher mix of exports,
10:38 will kind of partly offset the higher advertisements that the company has taken.
10:43 While for Tata Motors, the total sales of JLRs have risen roughly 16%
10:48 for the quarter, coming in at roughly 1,10,000.
10:50 While Nomura is seeing that the PV growth will aid margins,
10:55 as well as revenue growth coming in at 23%.
10:57 While commercial vehicle growth for revenues is roughly seen at roughly 5.6%.
11:02 So overall, a decent set of, actually a really good set of numbers expected for both these counters.
11:08 We'll see what the management has to say in the conference calls as well.
11:11 Back to you.
11:12 Interesting Friday evening you have lined up for you, Puneet,
11:15 as you track what the management of Tata Motors say.
11:17 The stock is doing well.
11:18 And look at the entire auto pack.
11:21 I would say a bit of an outlier on an otherwise very tricky kind of a week,
11:27 completely.
11:28 And Hero Motor, really, top of the pack there.
11:31 Siddharth, your take on the auto pack, and especially at Tata Motors, ahead of the numbers.
11:36 Yeah, so Tamizh, I think if you look at the overall quarter,
11:41 we were expecting strong numbers from the auto pack.
11:43 Generally, we have seen the fourth quarter is usually the seasonally best quarter,
11:48 both on a YOY as well as on a QonQ basis.
11:51 For the quarter, the passenger vehicle segment had posted a healthy growth of about 19-20%.
11:57 Two wheelers was about 14% in terms of volumes.
12:01 We have seen some of the two-wheeler companies,
12:02 Hero Motor and TVS, coming out with very strong numbers out there.
12:08 So I think something that will continue for the auto numbers, the expectations is pretty strong.
12:15 For Aisher, we are expecting a 10% revenue growth on a consolidated basis,
12:19 while a 25% pad growth.
12:23 Definitely some margins improvement that we are seeing and sustaining at high levels
12:28 because of the mix.
12:29 Even for Tata Motors, I think the overall results expectation is pretty strong,
12:35 both in the domestic market as well as in the global JLR business.
12:40 So India business, we see that again, driven by the passenger vehicle segment,
12:45 the passenger vehicle volumes grew about 15%.
12:48 The CVs were kind of mixed.
12:53 However, margins, especially in the JLR, will drive the overall numbers.
13:00 For Tata Motors, we are expecting a 14.2% consolidated EBITDA margins,
13:07 which will be much higher both on a sequential as well as on a wire-on-wag basis.
13:10 So overall, expecting a 14% growth in net profit.
13:15 If you look at again, from the numbers that have come out,
13:18 Hero Motor has been something that we have been quite liking.
13:20 It is a preferred pick within the overall two-wheeler space.
13:24 A, volume recovery.
13:26 B, the monsoon, which is predicted to be healthy this time around.
13:30 A, should aid in the rural demand.
13:34 And Hero being largely domestic driven is most likely to benefit
13:39 and add to the valuation comfort that Hero has compared to some of the other two-wheeler stocks.
13:45 So that is our preferred pick within the two-wheeler space.
13:48 Hero Motor, we have a target price of 5320 on that.
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