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00:00 Siddharth, a big redo of sorts related to what happened yesterday.
00:08 Now my question is, what have you guys told clients today with this bounce coming in,
00:13 PM Modi taking the oath on June 8th, so on and so forth.
00:16 Have you told people to put in fresh money to work?
00:19 And if so, are the pockets different than what they have been in the last six months?
00:24 Yeah, good afternoon, Niranjan. So helping Ruler Kursala Rai in the last three days post the exit polls.
00:31 Monday we had a sharp rally, yesterday we saw the carnage, and again today I think there is a good relief rally after the
00:38 media reports suggesting that PM Modi could form the government and kind of
00:44 removing the concerns from a lot of angles of participants that he will form the government, how it will be.
00:53 It reduces the kind of noise. What we have been saying since yesterday is that the government formation will happen and most likely
01:00 the India government will form a government. So the policy continuity is something that we continue to hop on.
01:08 While the numbers will be lower for the India government, but the policy would continue and hence
01:15 more or less the sectors continue to remain the same. Yes, there has been a pocket of
01:23 we can say the PSU stocks which were overvalued and liquidity chasing them. Now we believe that that could kind of go into a
01:31 consolidation in the likes of defence, railways. While the long-term fundamentals don't change, the valuations does change and the
01:38 liquidity could change in the near term and that could lead to some consolidation in the near term.
01:43 We asked the banks to put in money yesterday also in the fall. We listened to a lot of talks in the
01:50 blue chips, in the mid-caps, where the fundamentals continue to remain strong. They are not dependent on
01:55 the government policies and if you look at some of the sectors, for example, banking, the credit lending,
02:00 that is something that we have been liking. The other sectors are the consumption space.
02:06 Monsoon is expected to be good. Rural recovery is something that we are hoping for.
02:12 We have a lot of management commentaries indicating that rural after almost two and a half years
02:19 is outpacing rural compared to urban which continues to remain steady.
02:24 And the election outcome, we believe that there could be an additional
02:28 impetus from the government in the upcoming budget towards rural side, towards increasing spending,
02:34 reducing some of the taxes that could help the government at least improve the
02:42 owner sentiments around them. The core theme of CAPEX, I think that will continue to do well
02:48 bearing the near term where volatility could continue and some consolidation. But again,
02:53 the budget will be presented in a month's time and again those themes, the PET, CAPEX theme
02:59 would again be back into action. All right, Siddharth, an interesting take over there on a day of
03:09 a massive recovery. Just want to get your take on how much of more upside you see because a lot of
03:16 what we're seeing in the market over the last couple of days is linked to all of the political
03:20 action. And the next two days of this trading week also become crucial because if you're going to be
03:26 seeing a swearing-in ceremony by Saturday, you will have by Friday a fairly clear picture of
03:31 the composition of this government, what ministries possibly allies are getting, etc.
03:35 Are we looking at maybe ending the week in quite a robust fashion after the Tuesday knock?
03:42 Yeah, Siddharth, I think that is what should be the case over the next few days. The market will
03:50 be focusing on the government formation, what ministries, which party gets or who becomes the
03:55 minister for some of the key portfolios, be it Home, Defence, Railways and the most surprised
04:02 defence which is very important for the market. And after that, we also have the RBI policy outcome
04:10 on Friday, the commentaries regarding that will also kind of be in focus. So what we expect next
04:18 two days is the improvement in the overall market sentiments that should lead to some more upside,
04:24 at least in the near term.
04:25 Alright, now even as we're talking about all of the political action, it's not
04:31 like specific stocks aren't running related to this. And Neeraj, I'm going to come to you for
04:36 this very interesting piece that you've got about the Chandrababu Naidu effect or the TDP factor,
04:41 as you're calling it.
04:42 Yeah, well, not as much of data, but off my hat from whatever little I remember,
04:47 Tamannaah, I'll put it out so we may not have graphics for the same,
04:50 but some of the reasons why some of these stocks might be active, right? So, okay,
04:55 let's start with cement and both Ramco Cements and KCP are active. Now keep in mind that Chandrababu
05:01 Naidu had this Dream City project, which was shelved under the previous regime. Now that he's
05:07 back in the fold, the belief is that the Dream City project will again restart and therefore to
05:13 build out a city of sorts, right? You need amongst everything else, resources like cement and steel.
05:19 Now, why are these two stocks in focus? Because Ramco Cements facilities, and it's one of the
05:25 larger players in that region, will actually see some bit of cement output uptake there.
05:31 The reason why this small stock, KCP, which is a mix of cement, sugar and some others,
05:37 is because KCP has a cement plant, which is across the river from the site of the Dream City.
05:43 Imagine having a cement plant within kissing distance of a new city being built, the belief
05:50 would, and the markets would be, we do not know this, we do not know if this is how it will
05:54 fructify, but I can tell you this is what the markets are thinking, that the cement from this
05:59 plant of a 3 million ton plant, if I'm not wrong, that KCP has, will cross the river and be available
06:05 for construction out there, and which is why KCP has gained quite significantly in trade today. So,
06:10 both of these stocks, very active today. Beyond that, we've all spoken about Heritage Foods and
06:15 how Chandrababu Naidu's wife is, possibly if I'm not wrong, still a 24% shareholder here,
06:22 and which is why this stock, and by the way, we marked this stock yesterday on the trade setup,
06:27 if viewers would remember. It's up 20% today, this is after an up move in trade yesterday as well.
06:34 In the last three days, Heritage Foods has arguably been one of the best performing stocks.
06:40 So, weak to date, I don't think there's a better performing stock than Heritage Foods.
06:44 And then Amararaja, again, a company belaying to Jaydev Gala, a former TDP MP, and therefore,
06:52 no current connection, but obviously, if you have been in the same party for years,
06:58 people would want to put one and, you know, one plus one is equal to three,
07:01 and try and second guess, etc. So, a lot of this right now is the market's
07:05 belief or hypothesis about good times ahead for these companies. There's nothing to suggest that
07:12 orders are given or stuff is happening or so on and so forth. But I'm just telling you the reason
07:18 why this is happening. And Tamanna, at times, it is not about earnings coming in, but just
07:24 the sentiment changing and boy, has that sentiment changed for these stocks.
07:28 You know, Neeraj, I often say this, that the invisible threads that link companies,
07:33 performances, the markets, business and politics are so ever present, that it's interesting when
07:42 you see some light shed on them once in a while. But the fact is that nothing happens in isolation.
07:48 And, you know, these could be fundamentally good companies, not saying they're not,
07:52 but this is the key reason why they're buzzing today.
07:56 Himen, any of these that you track on the charts?
07:58 But while Neeraj was mentioning, I looked at every stock that he mentioned.
08:05 KCP looks very interesting. It's formed a base, it's given a breakout from a
08:09 rectangle pattern on the weekly chart. So that looks interesting. I'm seeing this weekly chart
08:15 because the week is not yet over, we have two trading sessions left. But if these levels
08:19 sustain till Friday, probably looks like, I think there's a breakout coming in. And the
08:24 dark horse would be Ramco Cement that you mentioned. So Tamannaah keeping down for 1,
08:28 2, 3, 4, 5, 6, this is the seventh month in a row. Okay, this month is not counted here,
08:33 only just five days. And so six months we've been down. And now it's getting oversold,
08:38 deeply oversold. The second round of positive divergence, a weekly upward KBS,
08:44 will simply put, I think Ramco Cement less to lose chances of a recovery seem bright.
08:50 And this could probably be a two, three month recovery, Tamannaah. All right. So Ramco Cement
08:55 also could see a recovery. Siddharth Khemka, I won't ask you to talk about any of these specific
09:02 stocks unless you have a view when you track them. But just in terms of the kind of moves we might
09:09 see over the next few months, and the policy push which comes in, where would you look at the rail
09:15 space? And the reason I'm talking about the rail space is the buzz right now is that one of the
09:20 ministries that could go to alliance partners is railway ministry. Nitish Kumar has run the
09:25 railway ministry in the past. I mean, it could go either way. Do you think that the railway ministry
09:31 possibly being with an alliance partner and not the BJP dents the enthusiasm for the stocks or
09:38 there's going to be no real difference? So Tamannaah, if you see the name that is coming up,
09:44 he has been a great leader and in his state, a great administrator. So if someone like a
09:50 charismatic leader like him comes to a railway ministry, I think that will only bring in more
09:55 focus and efforts, especially from an alliance partner so that they can show to the country that
10:04 how much effort they have put in to improve the railway. So I think that is something
10:09 which will only go to become positive in the sector. And with the support from BJP, I think
10:16 the focus on the entire infrastructure, Capex team, that would continue. Some of the policies that the
10:23 previous regime has initiated, the NDA 2.0, I think that would continue with the focus on
10:30 manufacturing some of these wagons in-house in the country, expansion of the railway networks,
10:38 signalling system security, and that leads to a strong business opportunity for a lot of these
10:44 players, both in the public as well as in the private space, getting to the railway segments.
10:49 I think the demand for railways in a country like India would only go up and an able administration
10:56 would only help grow the opportunity size for the sector. Hemin, as we wind down last few minutes of
11:06 trade, what is your call for tomorrow? Buy today, sell tomorrow? And like Neeraj was saying, would
11:12 you want to sell today, buy tomorrow? Any of those strategies? No, no, no, no, STBT out of the window,
11:19 I reckon, looking at the market like this, don't you think? Yeah, but I don't know, you might want
11:22 to book some profits if you've played it smart. Let's see what Hemin has to say. I would do a
11:29 BTST, I agree. STBT, frankly speaking, doesn't quantify at this point in time. Something like
11:35 a Bharat Forge, I would say Maga Chugar, but it's not an F&O stock, so something like a Bharat Forge
11:41 on a BTST makes sense, but no, STBT, despite a little bit of heaviness in the 15-minute charts,
11:47 I don't know, we should get that minute, but I think a BTST on Bharat Forge.
11:51 BTST on Bharat Forge, 15-1-1, and what a change two quarters can make, from February when
11:59 they gave that negative commentary to what the stock has done now, quite fabulous, really. Okay,
12:04 so BTST on Bharat Forge giving there. Siddharth, come on, leave us with one name that the house
12:11 would have, one or two top names that the house would have recommended their clients to buy today.
12:17 So, Neeraj, we recommended two stocks today very aggressively. One is State Bank of India, SBI,
12:25 which got hammered sharply yesterday and which is still not recovered today even in the market
12:30 recovery. So, we believe the banking space would do well, the credit growth should be in the range
12:37 of 14-15% for the year, and SBI has been the leader of the pack with the strong credit growth
12:46 asset quality, and we expect the growth to sustain over the next two years, ROAs to sustain over the
12:52 1% and valuations still being comfortable. The other is more from the defensive space,
12:58 you can say the consumer space, which is DMART. We are seeing that DMART is witnessing a good
13:03 recovery in both revenue as well as some of its large store formats where it was seeing
13:09 declining profitably. That is also starting to improve. So, revenue per square feet and revenue
13:15 per store, they are all improving. And along with this, we are expecting that consumption demand
13:21 will improve going forward. The inflation is under control, that is also leading to some
13:27 cost moderation, and the stock has kind of consolidated in the last one and a half, two
13:32 years. So, that also brings in some comfort in terms of valuation. So, going forward, we are
13:37 expecting revenue CAGR of 23%, patch CAGR of 35%. So, that is something the growth we are looking
13:45 at in DMART and also gives a defensive addition to your portfolio in the current volatile environment.
13:53 Okay, Siddharth, thanks so much for joining and giving us that perspective.