#ApolloTyres' profit falls in Q4, missing analysts' estimates.
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew and Smriti Chaudhary on Ask Profit. #NDTVProfitLive
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew and Smriti Chaudhary on Ask Profit. #NDTVProfitLive
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00:00Hello and welcome. You're tuned in to Ask Profit.
00:28I'm Smriti Chaudhary and with me is Alex Mathew and for the next 30 minutes, we'll take all
00:32your stock related queries. So write to us on any of our social media channels or on
00:37the WhatsApp number that is on your screen right now. You can also write to us through
00:42the YouTube live chat. We'll take your questions from there and get them answered by a fundamental
00:46and technical guest. But before that, let's take a quick look at where the markets are
00:50currently at. You have the benchmark that's close to the low point of the day trading
00:56below 22,200, well below 22,200 rather, as we speak. So a bit of a negative day for the
01:04markets today, down about three tenths of a percent. You look at some of the contributors
01:09of the Nifty Fifty and there's something like a Maruti Suzuki that's down over two and a
01:14half percent. There's Bajaj Auto down about 2 percent, Ayesha down. So a couple of auto
01:20names that are in the red today. But among the biggest weights that have in the Nifty
01:28Fifty, there's something like ICICI Bank dragging, SBI dragging, RIL dragging. On the other hand,
01:34you have Bharti gaining, Infosys, HDFC all in the green today. Let's look at the broader
01:39markets as well. Broader markets doing fairly well today compared to the benchmark, one
01:46mid-cap index up about half a percent and you have the small cap index as well doing
01:51well up half a percent in trade as well. Let's look at some of the counters that are moving.
01:58There's Hitachi Energy that's up over 9 percent in trade. You have Oberoi Realty continuing
02:03with gains for the second day after its fourth quarter earnings up about 8 percent in trade.
02:09You have NCC up 7.5 percent, Titagad Rail also post results up over 6.5 percent in trade. Now,
02:18for something like a Titagad, the results were okay. I mean, revenue up 8 percent,
02:24PAT up 63 percent, margin above estimate, but the PAT was up due to lower interest expenses and
02:34also a slightly higher operating income. So, that's where we're seeing largely the profit
02:42was up because of that. But the stock in focus today is Apollo Tyres that is also on the back
02:49of its fourth quarter numbers. It's up about over 2.5 percent. And to break down those numbers for
02:55us, we have my colleague Puneet joining in. Puneet, take it away. Yeah, thanks for that. So,
03:02it is although a little low from its intraday high of roughly 7 percent, but that's dragged
03:06down by the broader Nifty fall that we've seen today. Now, if you see the results,
03:11the results are largely flat compared to the previous year with revenue just growing 0.2
03:15percent while EBITDA margins came in at roughly 16.4 percent versus 16 percent in the previous
03:20year. Now, this was on strong operating leverage that the company has seen in this particular
03:24quarter. But on net profit basis also, the net profit was down 14 percent, coming in at roughly
03:30354 crores. Now, the major reasons for this particular fall was an EPR provision, which is
03:36the Extended Producer Responsibility Program, which is by the government. Now, what is actually
03:42this program is basically the Ministry of Environment, Forest as well as Climate Change
03:48has notified the companies to purchase certificates from recyclers. This is because they are selling
03:55a pollutant, as they call it, and they have to be fulfilled by purchasing these certificates.
04:00Now, for this particular financial year 2023, they recognize the one time impact of 31 crores,
04:06while for this financial year of financial year 24, they had an impact of 68 crores.
04:11But majorly, the stock is buzzing on good news that the management said as well as good commentary
04:17going forward for the financial year of 25. And we'll see what brokers have said also. So,
04:22key highlights, the international business has been led by strong growth seen in Europe versus
04:27a flat estimate for the industry. So, they're growing across the board and against the industry
04:33trends as well. The FY24 margins were up by roughly 404 basis points to come in at 17.5 percent. This
04:40level has not seen by the company over the last four to five years because the debt has been
04:45reduced and that's one of the key beneficiaries. The ultra-high performance tyres, which they sell,
04:50which has a higher average selling price, the mix has improved to now 47 percent, up from 43 percent.
04:57So, what are the brokers are saying? MT has a buy call with a target price of roughly 600 rupees,
05:02which is 26 percent upside from the current levels. They have said that the replacement
05:07exports as well as Europe demand is one of the key positives for the company. Nomura has also
05:12upgraded the stock from a reduce to a buy with a target price of roughly 515 and Citi has maintained
05:19a target price of roughly 570 rupees per share, which is a 21 percent upside from current levels.
05:24So, overall, decent set, flat set of numbers, but the commentary is what driving the stock price.
05:29Back to you. Thanks, Puneet, for getting us those details. Yeah, well, Puneet pointed out,
05:34it is off the high point of the day and trading with gains of about 2.5 percent.
05:39We've got Osho Krishan joining in and we will soon have Shaheena Mukadam as well. We're trying
05:44to figure out certain issues with the line. But for now, let me go across to Osho just to get a
05:50sense of how you would trade the market right now. We have a few people that are looking for
05:57guidance on the trading strategy for the benchmark, Osho, for the Nifty 50. How would you trade it?
06:03And also, if you have any recommendations for stocks individually to look at for the short term.
06:09Very good morning to both of you. Well, now, coming to the query on Nifty,
06:14Nifty is basically decoupling with the global markets because in today's session,
06:18we have witnessed that the global markets were pretty positive and we opened also on a very
06:23decent note. But on the higher end, the 22,300 strike also is coinciding with the 20-day exponential
06:31moving average is being a very strong resilience for Nifty. So, I'm expecting that in the short
06:36term period, the higher thing has been made approximately 22,300, 320 on spot levels is a
06:42very strong resistance for Nifty. While on the lower end, I'm expecting a cushion around 22,120,
06:48which is the current levels where Nifty is treading around. So, this is the first cushion that one can
06:54expect for Nifty for intraday. And from here onwards, there can be some marginal up move that
06:59can be seen near about 22,200, 220 to 240 odd levels. But the broader perspective for Nifty
07:05lies in a 300 kind of a range from 22,000 to 22,300. So, one have to follow a pragmatic view
07:14with buy on the dips and sell on the rise until we see a decisive closer above the 20-day exponential
07:20moving average, which is approximately around 20 to 320 odd levels. So, until that time, one should
07:26not be very much bullish or very much aggressive in their long bids. Yes, but definitely try to
07:31utilise the lower ends like 22,120 or 22,100 as a buying opportunity for 50 to 60 odd points.
07:40Okay. All right. We'll get your individual recommendations in just a bit. We're joined
07:45by Shaheena. Shaheena, good morning to you. We were discussing Apollo tyres and unfortunately,
07:50I don't think you would have been able to hear what my research analyst had to say. But
07:55PAT declined in the quarter gone by of as much as 14%. But there was some positivity that was taken,
08:04I believe, from the conference call. What do you make of the results? And would you buy the stock
08:09right now? Yeah, I think it is an interesting buy, couple of things. Yeah, I agree the PAT on
08:15a quarter basis was lower. But if you look at it on an annualised basis, you know, profits were up
08:21by almost, you know, 55% on a console basis. And if you actually analyse it, basically,
08:28the EBITDA margins, now let's look at it on an annualised basis, the EBITDA margins were up
08:34sharply, you know, if you look at FY23, they were just about something like 8%. And now it's more,
08:41it's around 12%, 12% plus EBITDA margins. So, and the raw material costs, actually,
08:47if you see going forward, also, are likely to remain well under control, because you have
08:52rubber prices, you have carbon black prices, all everything is, you know, subdued, the price are
09:00soft. And this is likely to continue for a couple of quarters going forward. Also, in terms of
09:06demand, if you see the tyre demand in India, actually, it's growing on a high single digit,
09:12expected to grow in these levels over the next couple of years, two, three years,
09:17and Apollo Tyres is likely to actually gain in terms of market share. Demand remains robust.
09:24Profits, I think, will continue to show a robust growth on a yy basis, international exports also
09:30picking up. So, I think to that extent, Apollo Tyres in valuation also is looking much better
09:36than its peers. And EBITDA is just about seven times. So, I think, you know, if you look at it
09:43from a medium to longer term basis, it would be an interesting investment. Of course, you need
09:49to keep a stop loss, maybe close to about 450 and odds, because the overall market is, you know,
09:55volatile. But I see you can reach a price of about 550 in a year's time.
10:00Right. Okay. Let's start off with the queries now. And the first question is on a counter,
10:06Picardly Agro. What a counter this has been. Luhana, I'm going to come, this is, this one's
10:12from Luhana. And this from a longer term perspective, they bought the share at a price of
10:16Rs. 125. It's currently trading above Rs. 740. And you look at the fourth quarter numbers,
10:23you look at the yearly update, earnings update, Shaheena, and you look at the stock performance,
10:30it's gained over 1500% in the last one year itself. It's locked at upper circuit today as
10:37well. For a stock like this, the commentary, management commentary also seems to be extremely
10:44positive from here on. But for somebody who's put in this money and is sitting on a considerable
10:49profit, would you suggest taking some money off the table? No, I don't think so. Of course,
10:55I wouldn't suggest an immediate buy also for today because of course, the stock price has
10:59rallied substantially. So one needs to, if you want to enter, yeah, you should look at dips.
11:05But I think, you know, the overall, the product launches that they are doing are very interesting.
11:10Also, in terms of their profitability, while it has been subdued for the annual basis,
11:15I think things are improving if you look at it on a quarter by quarter basis. Also, in terms of
11:20revenue, the revenue growth has been strong, new product launches. It's a good stock to be in. I
11:24would suggest, if you're invested, continue to remain there and you can add it dips.
11:30Dips or add when the circuit opens, when you're able to, because right now there's no possibility
11:36of buying it in any case. The next question is on HDFC Life and we've got a question from Anuj
11:43Dhameja, who's writing in from Saket in New Delhi and he's bought at levels of 578 Osho.
11:49He's wondering what his short term strategy should be on this counter.
11:55See, overall HDFC Life has been into a very corrective phase from the zone of approximately
12:00640 and is now hovering around 550. But looking at the overall perspective or overall technical
12:06developments, then from here onwards, the downside is very much limited near about 520-530
12:13is the downside that one can see in a coming future. So I'm expecting that post it testing
12:18the zone of 530-520, there can be a decent up move. I'm not very much aggressive with the
12:23upside targets, but there can be a gradual up move specifically towards the reclaiming the
12:29previous swing high of 640 in the short term period. So one should stay invested in this
12:33counter. Short to medium term perspective, you can see a decent jump towards 640 and once the
12:38counter reaches the zone of 640, then again, we need to review the counter.
12:42All right. Next counter is Wipro and this is from a shorter term perspective. The question
12:48is from Siva. They say they bought the counter at a price of 465. It's currently trading below
12:55that price. Osho, a little bit of gains in the overall IT space today. But from a short term
13:00perspective, what would you suggest Siva to do with a counter that's been bought at a slightly
13:06higher price? See, overall, the prices are near about the same zone. 660 is approximately the
13:15same zone. But looking at the overall technical setup, the counter has seen a decent rally from
13:19the zone of 380 towards 540-550 odd levels. Post that, there has been some correction and overall
13:26IT space has not performed well in the past few months. But overall, I can expect that from here
13:32there can be a decent upmove, a gradual upmove for Wipro. And for immediate basis,
13:37the one can target for 490-495. Once it reaches the zone of 495-500, then from there onwards,
13:45we need to review that whether it is going to breach the zone of 500 or not. But right now,
13:51the counter is at a very comfortable position around the zone of 200 days on the technical
13:56charts. All right. We've got a question from Prasad and he's asking about Midhani. He's
14:01bought 1000 shares. I do not know. Oh, he said that he's bought at levels of 360 per share.
14:07And he's wondering whether he can hold for the long term what the prospects are for the growth
14:13of this particular company and the counter. Any coverage, Shaini? Any advice that you can give him?
14:20I think Midhani is a good public sector unit and it's got the benefit of being part of
14:27supplier to defence. I think to that extent, defence, the orders from defence and they supply
14:33to some of the components for rockets also. I think the demand is very good. So one needs to
14:39be invested. I think metal prices, the raw material prices also should remain soft over
14:46the next couple of quarters. So I think to that extent, it's a good bet. PSU bet.
14:51All right. It's time to slip into a short break, but we'll be back and we'll take more
14:55questions on the other side. Stay tuned.
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17:57Welcome back. You're watching Ask Profit. And in case you're just tuning in, you should see
18:02a number on your screen. I'm going to request. Yes, there you go. That number is where you send
18:06all your WhatsApp queries to us. And remember to tell us the name, your name, as well as the place
18:12that you're logging in from or tuning in from. The next question I'm taking is from Naman Deora
18:18and he's writing in from Kolkata. He's asking about three particular stocks and this is Capacity
18:23as well as HG Infra and ITD Cementation. Osho, he's wondering which out of these three he should
18:30get into from the perspective of the next 15 to 20 trading sessions. So basically about a month's
18:36view. See, overall, firstly, going with the Capacite. Capacite has been into the cycle of
18:43higher highs, higher lows from the last financial year, from April 2023. And from that time,
18:48it has been hovering or taking support from the 100 exponential moving average. In the last three
18:53sessions also, there has been a strong resurgence in this counter. So I'm expecting this counter
18:58has the potential to retest the zone of 320 on immediate basis. And once we see a breakout from
19:04the 320 zone, then another 60 or 40 odd points of rally can be seen in Capacite. The other counter,
19:11HG Infra, again, has given a very tremendous return in the last three months. But overall,
19:17the risk reward ratio for this counter does not suit as of now. So if one is having a position
19:23or holding a position, they should certainly hold with a trailing stop loss around the zone of 1300.
19:28But fresh accumulation in this counter is not advisable at current levels. And the third
19:34counter you have mentioned was? So I just wanted you to pick one of the three. I'm guessing it is
19:40the first one. Capacite is, yes, Capacite is looking more promising as compared to HG Infra.
19:48Let's take the next one. The next counter that we're talking about is Bharat Electronics. This
19:53one's from Jeeth. They say they bought the counter at a price of Rs. 170. It's currently trading
20:00above Rs. 230. Shaheena, a bit of a profit there for the viewer. Would you suggest holding onto it
20:07from a point of view of two years? Absolutely. This is another stock which will benefit from
20:13defence. And a two-year holding is definitely recommended. You can easily look for a target of
20:20about Rs. 280 to Rs. 300. Got it. All right. The next one, I'm hoping that you can get us a view,
20:27Osho. And this is on Info Beans. Info Beans, which is currently trading at just about Rs. 418.
20:34It's got a market capitalisation of just over Rs. 1000 crore from what I can see. And we've got
20:39Anupam, who's writing in again from Kolkata. He's looking at the next 6 to 12 months.
20:43He's bought at levels of Rs. 435, which is slightly higher than the current market price.
20:49See, overall, this counter is into a corrective phase and there has been no signal or sign of any
20:53kind of reversal in this counter. So I would better say to stay sidelined from this counter
20:59because it has not been able to sustain above the 200-day SMA on the daily front. So the time
21:05it surpasses the zone of Rs. 445 and sustains above the same, then one can see some kind of
21:11traction. But looking at the overall trend, it's very weak, better to stay sidelined. If you have
21:15positions, keep a strict stop loss of Rs. 395 and try to exit on any bounce. All right. Got it.
21:23Next counter we're talking about is Canra Bank. This question is from Geeta, who's writing in
21:27from Mumbai. They say they bought the shares at a price of Rs. 110, just slightly below what
21:37it's currently trading at. The question is, should you accumulate the counter at today's
21:42price? And this is from a longer-term perspective. Shaheena, would you suggest
21:46buying today from a longer-term perspective? I would prefer buying it at dips, not at current
21:52levels. It would be better to buy it, say, maybe closer to about Rs. 105-108. The thing is,
21:59actually, after the results, the stock has seen a bit of correction. But in terms of valuation,
22:03at less than 0.5 times book, it's still interesting from the long-term holding perspective.
22:09And it is one of the better-managed PSU banks, smaller than, of course, SBI, second after SBI.
22:16So one can add, but add it at dips. Gokhaldas Exports is the next counter that
22:21we're taking. This is a question from Jai Mathew. He's writing in from Bengaluru,
22:26from Whitefield in Bengaluru. And he's got 125 shares, which he's bought at levels of 364.
22:32He's asking what his strategy should be. He's not really specified his time frame. But he's asking
22:38how long he should consider holding and what the next target would be. So I'm assuming, Osho,
22:43this is better suited for you. What is the strategy that you would employ on Gokhaldas?
22:49See, overall, this counter has been consolidating in a very broad range in the last 6-7 trading
22:55months. But overall, the positive development that we can witness that it is taking support
23:00of the 200-day SMA in the near period. So from here onwards, there can be some kind of traction
23:05that can be seen. On the lower end, the support lies around the zone of 780. On the higher end,
23:11the immediate hurdle is around 880-odd levels. The time it breaches the zone of 880,
23:16then from there onwards, we can see a movement of approximately 60-70-odd points in a short-term
23:22perspective. So one should definitely keep this counter in their investment portfolio and
23:27wait for some medium-term perspective to get a decent return.
23:31All right. The next counter is SRF. This one is from Rajesh Maheshwari,
23:35writing in from Singapore. They say they bought the counter at a price of Rs. 2,330. It's
23:42slightly elevated levels there, Osho. From a short-to-medium-term perspective,
23:47what key levels you should watch out for in this counter?
23:51This counter has been into a consolidation phase from a very longer duration in the zone of 2100
23:57to 2600 zone. So the time it breaches or the time it reaches the zone of 2100, one should definitely
24:04try to accumulate it because looking at the overall setup in the last two years, 2100 has
24:10acted as a very strong support. And on the higher end, one should try to book their profits around
24:152600-odd levels. And this is the range that the counter is hovering within. If there is any
24:20decisive breakthrough above or below the range, then we can witness 500 points of another set of
24:26rally in this count. We have a couple of minutes more. Let's try and fit in as many more as possible.
24:31Vinod from Chennai is asking about Power Grid Corporation of India, which he has bought at
24:34levels of 270. He can hold for the next two years. Shaina, the question is, should he?
24:40Yes, he should hold. There is definitely an increase in supply and demand for power
24:46and Power Grid is well-positioned.
24:49Next counter is Gland Pharma. This one is from Mr. G. C. Prakash. This is from a short-to-medium-term
24:55perspective. They bought the shares at a price of Rs. 1,410. And so, a considerable profit there,
25:03Osho. Would you suggest booking that profit or should you continue holding on to it?
25:08One should definitely hold to this counter for the timing. We can expect a decent run once it
25:13surpasses the zone of nearly 1,820-1,840 in the short run. So, keep a structure stop-loss around
25:19the zone of 1,650 and hold this counter for short-to-medium-term.
25:23Ease my trip very quickly. 1,000 shares, I do not know the buy price. But Mr. Redaiah from
25:28Tirupati is asking about what he should do. Should he hold on?
25:33See, there has been no significant development in this counter. But overall,
25:36the technical setup is very much conservative. So, one can have or hold this counter on the
25:42lower end, 38 or 40 odd zone is acting as a very strong support. On the higher end,
25:4854-55 is the zone where one should try to exit from the counter.
25:52So, short-term view on Tata Motors. They bought the counter. Okay, there is no name. They bought
25:57the counter at 980 levels. So, elevated levels from a short-to-medium-term perspective. Should
26:03you hold on? There can be some kind of further
26:07dip in this counter. But overall, 920-910 is the zone where I am expecting the sell-off to get
26:14halted. And from there onwards, the counter can definitely try to recoup the losses. So,
26:20I am expecting on the higher end, 980-990 should be seen from short-to-medium-term perspective.
26:25For now, 10-15 points of downward movement is still remaining in the counter.
26:31The very last question that I will slip in. Laxman from Jodhpur is asking about
26:35Dredging Corporation of India. Shaheena, if you have coverage,
26:37he has bought at levels of 750. He is looking for one year. Should he hold on?
26:42Yeah, he should hold on. It looks good at current levels.
26:45All right. Thank you so much for that short view, Shaheena, as well as Osho. Thank you so
26:48much for joining in as always and for answering all the questions that you did. Viewers, well,
26:53that brings us to the end of this edition of Ask Profit. Of course, we will be back tomorrow to
26:57take more of your questions. And there is lots more coming up over the course of the day. So,
27:01I would encourage you to stay tuned. This is NDTV Profit.
27:18Thank you.
27:48Thank you.
28:18Thank you.