Modi Sarkar Set For Hat-Trick | NDTV Profit
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00:00 Gurmeet Chaddha, Managing Partner in CIR, Complete Circle joins us on the show to talk
00:05 about the fundamentals on the technicals.
00:08 Rajat Bose joins in as well.
00:10 Gentlemen, both of you, thanks for joining in.
00:12 Gurmeet, are you dressed for the occasion because you're wearing red or do you believe
00:16 that you are anti what the market will show today?
00:18 You know, only I was being shamed in the studio, but Gurmeet, I'm thankful that you've joined in.
00:24 And I was just saying red is the color of energy, so it's absolutely fine.
00:29 No, I think it's more with the celebration of democracy rather than the color of nifty
00:35 of the markets, to be honest.
00:37 Okay, but be that as it may, Gurmeet, so assuming that, I mean, we are essentially asking the
00:41 same question to everybody, right?
00:43 That if you are indeed, if the verdict eventually is what the exit polls indicated, are you
00:50 putting cash to work in your PMS schemes or are you sitting on the sidelines waiting for
00:55 a correction?
00:57 No, there's no point sitting on sidelines.
00:59 People have been sitting on sidelines, have been on sidelines now a few years.
01:03 And you know, these are trades of a bull market.
01:05 First, you have to take a call whether you are in a bullish face or not.
01:08 And you know, markets are exuberant both sides.
01:11 We've seen fear also take over when things go the other way.
01:14 And just to give you a data, Neeraj, yesterday's move was, let's say, about 3.5%.
01:18 This has only happened 13 times in the last 14-15 years.
01:22 Now, if you keep missing out on these 3.5% returns, let's say, for a five-year period
01:26 or a six-year period, you lose half of your portfolio returns.
01:30 So, you know, if you're on the long side, if you're on the fundamental side, you can
01:34 recalibrate.
01:35 You can recalibrate in terms of balancing the portfolio, in terms of deciding where
01:39 there is, you know, euphoria.
01:40 Can you move from micro-cash to large-cash?
01:43 Can you rebalance a little bit from let's say, PSG and defense back to maybe financials?
01:48 So, I think the focus has to be rebalancing rather than taking, you know, these extreme
01:52 calls, let me wait in cash.
01:54 Markets are not going to knock you and tell you that, you know, now I'm, you know, reasonably
01:57 valued, please come in.
01:58 And I've seen that so many times and it will happen on both sides, I'm saying.
02:02 So, you know, we continue to be deployed.
02:04 We are rotating now.
02:05 We believe financials are sweetly positioned.
02:07 We also believe some of the places probably, you know, are now at the cyclical lows.
02:12 They might deserve a bit of a loop.
02:14 So, we are rebalancing.
02:15 We're not taking any timing call as far as our portfolios are concerned.
02:19 Rajat, very quickly, we are a little confused.
02:24 Implied Nifty started with an 80-point gap hour, went all the way to 140, now trades
02:28 negative.
02:29 Do we have any trading strategy on the index at 9.15 this morning or that would be very
02:35 unwise to do?
02:37 Right at the beginning, you don't take a trade.
02:41 Actually, in the first 15 minutes or rather, I would say about say half an hour or so,
02:49 professional traders do not jump in.
02:52 But what I would like to say here is that if you are looking at the exit poll results,
02:59 that is already discounted yesterday and the Nifty is at 23,263.
03:06 Now, suppose if it were to happen that for Charso Par becomes a reality, in that case
03:13 24,150 and max to max 24,700.
03:19 So, how much is left?
03:21 Say about 4% from the current levels.
03:24 Would you initiate fresh longs?
03:26 No.
03:27 I would say that if you have long positions, since you are gaining, you have gained so
03:32 much yesterday, hold on to it and use a stop loss that you are comfortable.
03:38 But fresh longs here is not really warranted.
03:42 And do not jump in to create short positions because you may get butchered by that.
03:50 Let the trend decide itself.
03:52 And once the trend comes in and the Nifty gets into, if it were to go for profit taking,
03:59 that is likely to happen.
04:01 Below, say, 22,800, only it will become weak.
04:06 So, considering all this, you have to calibrate your trade the way you want to play as the
04:13 market unfolds itself along with the election results.
04:17 And one thing I would say that this, I would still insist that this month will be pretty
04:25 volatile.
04:26 So, exposing yourself too much now would actually become counterproductive.
04:32 So, the Nifty implied open has turned negative, nothing to do with my red blazer.
04:38 This is only, like me and Gurmeet have said, this is to celebrate the festival of democracy
04:44 and energy, etc.
04:45 But Kush, this is also an opportunity, boss, because look at it.
04:49 People yesterday were looking at this market and saying, "Acha toh lag raha hai screen,
04:52 but hum kya karein?
04:53 Aaj moka mil raha hai?"
04:55 You know, I am actually a little encouraged by the fact that the implied open has gone
04:59 negative.
05:00 If the results are in line with expectations and…
05:03 What is the expectation as per you?
05:05 The 320 to 350 mark.
05:07 I will take…
05:08 365?
05:09 Oh, yeah, yeah, I will take 320 as well.
05:10 365 is the pole of poles outcome.
05:12 So, if we get 365, the market could see further upside.
05:15 NDA.
05:16 Absolutely.
05:17 And this is creating an opportunity to go long at open as well.
05:19 I mean, assuming that, you know, the numbers do come in, but this has created an opportunity.
05:22 At 200 points up and 150 points up on the Nifty on the open, would you go long?
05:27 No, perhaps this is an opportunity.
05:29 Hmm, okay.
05:31 Bank Nifty too?
05:32 I am actually more constructive on the Bank Nifty.
05:34 You want to tell us if Bank Nifty gets a flat start this morning?
05:37 Oh, yeah, go long.
05:38 Go long.
05:39 You will have to have your risk managements in place.
05:40 We know that it is a high volatility.
05:41 It could be a high volatility day.
05:43 But if you get an opportunity, go long on the Bank Nifty.
05:45 And you do this with the option trade.
05:47 So, you would go covered, I am guessing.
05:49 Yeah, well, you know, actually the premiums will get crushed.
05:51 Exactly.
05:52 Correct.
05:53 It was a wick's will fold.
05:54 Yes, and you know, that's why on Friday, if you remember the conversation that we had,
05:56 it was very difficult to decipher how do we go long.
05:59 And the best way was to buy the futures and have a protective put.
06:02 I was glad to see that unit panned out very well on Monday.
06:05 I think that will still be the way to go about it.
06:08 But if you don't want to take too big a risk, then perhaps an option trade is something you would want to consider.
06:13 Gurmeet, Gurmeet, yesterday the main reward was for PSUs, right?
06:19 So, we were speaking to Aditya earlier who was saying that he will buy quality.
06:23 And PSUs, of course, have quality.
06:25 The question is, would you go out and buy into some of the PSUs, be it defense, be it even banks?
06:30 Yesterday, there was some serious delivery-based buying in an SBI, BOB, etc.
06:35 So, there may be the bulk of the returns probably played out in the last one year.
06:41 If you see the market cap, that was $200 billion at the low.
06:44 We already 4x of that in a year.
06:46 So, I think it's been a phenomenal move.
06:48 They have given a record dividend of 1.25 lakh crores.
06:52 Never seen that kind of dividends from PSUs along with growth in capital in a long, long time.
06:57 I think we ought to be selective here.
06:58 I think PSU banks still make sense.
07:00 I think after a lot of time, I've seen 1% ROA for some of the good banks, including PNB, including Bank of Baroda, including SBI, of course, has been more of a structural turnaround.
07:11 So, I will stick myself to tier 1 PSU banks because in some tier 2 banks, the ROA has been led more by treasury gains and recoveries rather than the core operating metrics.
07:21 So, yeah, I want to keep a watch on that.
07:23 And you know, with small banks, there could be some accidents here and there.
07:25 So, that can already derail stuff.
07:28 I'd be a little wary of PSU lenders and non-banks because they're already trading at 4-5 book value.
07:34 I'd probably prefer SDFC, ICICI access on that side in terms of my relative positioning.
07:41 And we are adding some NBFCs because as bond yields come below 7 and may drop another 10-15 bids, the cost of funds will come down.
07:48 And I think that's what NBFCs have been really struggling for last year, year and a half.
07:52 So, some of the marquee names like Poonawalla Ping Pop, you know, the Chola, the Bajaj Kanai, we also have the Bajaj Housing IPO, which is due.
07:59 So, I would be selectively positioned there.
08:02 So, I'd be happy with what PSUs have done.
08:05 But I agree that you've got to be selective.
08:07 Defense and railways, I'll be a little careful.
08:09 There's no harm in probably taking some money off the rail.
08:13 [Music]