India Set To Become The Largest EM: Morgan Stanley | NDTV Profit
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00:00Neerav Akshar joining us now. He's head equity research analyst at Manharlal Securities.
00:04Neerav, very good morning to you and great to have you on the show as always.
00:08Now, just look at the implied open this morning and we're looking like we're set for a good start.
00:14Maybe a whole set of factors, maybe that Morgan Stanley note has also boosted sentiment.
00:18But where do you see the most upside coming in, Neerav? Will it be some of the laggards
00:24which haven't really moved so far, like the banks and the autos as well, which have been quite quiet?
00:30Yeah, good morning and thank you for having me on your show. As you rightly pointed out,
00:35I think markets have shown a lot of resilience. And even yesterday, when there was a bit of
00:43turmoil in the global markets, we've seen the domestic markets hold out quite well.
00:49One of the important factors which is going to influence the markets is the fall, is the sharp
00:54fall in the crude oil prices. So, I think this augurs extremely well for various sectors like
01:00paints, tyres, plastic, chemicals, petrochemicals, aviation sector, etc. And I think we're likely to
01:08see a positive effect of this even on the FMCG sector. Yesterday, if you recall, HUL has hit a
01:1552-week high. So, it's a benefit which arises on account of the comeback in the global demand,
01:22the lowering of the crude oil prices because 51% of their portfolio is soaps and detergents. So,
01:29I think that could have a positive bearing over there. And overall, I think the auto sector,
01:37if one were to look at the auto sector, then I think the two-wheeler space still looks quite
01:41attractive despite the fact that most of the two-wheeler stocks have doubled in the last
01:47one year. Apart from this, I think IT space has been holding out quite well despite the fact
01:53that the global scenario continues to be a bit volatile. And we have banks which continue to
02:03be the sore point as far as the markets are concerned. We have with us Shrikant Chauhan
02:07as well of Cortex Securities joining in with his view on the markets. Shrikant,
02:12yesterday, the index looked nervous. But by the time we closed shop, we closed just shy of 25,200.
02:20I mean, it's almost compelling to go long on the index. Would you agree with me or would
02:24you still be circumspect and avoid any long trades on the Nifty for now?
02:32Good morning, Sumedha. Good morning, everyone. I think markets are going to consolidate at higher
02:39levels. Even if we go through with the trend of last 10-12 days, when it was going up gradually,
02:45there was hardly any major gains on a day-to-day basis that we saw. Yes, eventually, like in 10
02:50days, we saw the markets crossing the level of 25,000. But otherwise, the market was more
02:56towards stock-specific activity. And I think now the way there are developments, the 10-year bond
03:04yield is quoting above the levels of 2-year bond yield. It's certainly not positive for equities.
03:12That means that we can see some recessionary sort of activity in the US market, at least in the
03:17short term. So that will actually going to keep pressure on the equities. And that is the reason
03:23I'm of the view that till the markets are not crossing 25,350, which is the highest high level
03:30of Nifty, I think we are going to see sideways sort of activity in this market.
03:34As it's a weekly expiry day, if we see the market is crossing 25,350, then there is a possibility
03:40that we could see some more shortcoming. Otherwise, I'm of the view that we need to
03:44be more and more stock-specific. In fact, we should look for taking some profit on long
03:48positions or reducing long positions if the markets are really opening with a gap of 100 points.
03:55If it is going to be a range bond market, it's going to be all about individual stocks, right?
03:59So if you're going to avoid the index, what are the individual top trades that you're
04:03recommending to our viewers this morning? Yeah, I think there are a number of stocks
04:09which are really doing well. They are very close to their important breakout levels.
04:13Most of these stocks are crossing their levels. And after crossing that particular level,
04:18we are seeing a good amount of activity. So yes, there is a buying interest in specific stocks.
04:24In that, we like Grasim, which is currently around some 27,50-55.
04:30There, I'm expecting stock to move towards 28,50-29,50 in the next few days. It's a positional
04:36call because it is very close to its important support levels. At the same time, I'm not
04:41expecting any major firework in the market. So it's a positional buy with a stop loss at 26,40.
04:48We can expect 28,50-29,50 on the higher side on Grasim. The other stock which we like is
04:55Biopon. And almost three months, the stock was below the levels of 375. Whenever we saw the
05:01levels of 375, we saw some good amount of profit taking and all the way the stock came back to the
05:06levels of 330. But yesterday's trading session clearly indicates that something is really going
05:11positive for the stock. It has managed to cross the level of 375 close about the same. So based
05:17on its technical formation, I'm expecting stock to move towards 415 and we can keep a stop loss
05:22around 365 for buying Biopon at current levels. Shikant, let's look at some of the big movers
05:33over the last couple of days and largely I think on technicals. And I want to just pull up the
05:38Godrej Industries and your view there. Because no real fundamental reason I think is moving on
05:44the charts and has been seen quite a bit of an upside. Let's see yesterday's chart,
05:49the intraday chart over a month, still fairly good. Do you think that there is more steam left here?
05:58See, I think I cannot give my comments on entire Godrej group because
06:05all these Godrej stocks are in compliance list. So I cannot share my views.
06:10No issues, no issues. What about Cain's Tech? Is that something you're tracking and can talk about?
06:15Absolutely. This particular stock is showing a lot of momentum and it is
06:21just on the verge of crossing all important levels. Whenever the stock is correcting,
06:27it is finding support at important levels. This time also after hitting the levels of 45-4600
06:34levels, it recovered sharply and it was some 20-day simple moving average which was actually
06:39supporting to the stock. So what it means, it means that whenever there is a correction,
06:43someone is there to take buying interest or to invest in this particular stock,
06:48because it is crossing its previous height. So this time also, I think around 48-4900 levels,
06:53it survived with a stock loss close to 4600. I'm expecting stock to move towards at least 5200.
07:00But in the medium to long term, this stock can be around 6000 levels.
07:066000. By the way, the beauty about stocks like Cain's Tech is that at 2500, it was trading at
07:13a P multiple of 90. People found it expensive and it went on, earned earnings but has become
07:18even more expensive. The TTMP must be at least 120-130. But some of these stocks are growing
07:23at such a good clip that people are not seeing any reason to be negative out there.
07:28Okay. Nirav Asher, yesterday we saw a note from Morgan Stanley on how some of the chemical names
07:38have actually now disappointed with their earnings and the upgrades are some time away. So sure,
07:44Agrochem may be growing, but some of the others, they specifically highlighted Aarti,
07:48which they thought is missing a point or two or maybe the Dyson pigment segment is not doing well.
07:53What about this bucket? People have started getting constructive there.
07:57Is there anything you like here or are you taking money off the table?
08:02Oh, at least at this point of time, I think the recovery is some time away. And most of these
08:08companies have indicated that they expect recovery from the second half after the second half of the
08:16current year. So I think one should start looking at numbers from Q3 onwards, whether there is a
08:23signal of recovery. So having said that, I think we have not done any meaningful buying as such,
08:30but we do hold positions in a few stocks like Sudarshan Chemicals, etc., which we will continue
08:36to hold and maybe see how things pan out Q3 onwards. Sudarshan Chemicals, in fact, that's
08:44been in the news yesterday as well, the stock looking good with the 5% up move that we saw in
08:49trade. Well, in other space, Neeta, when you want to comment on this one for me, IT saw some profit
08:54taking yesterday. Some may argue because it's what happened on Wall Street, you know, when I trade.
09:00Others believe it could be healthy profit taking after the recent rally. Incremental money, would
09:05you still look at adding into IT stocks? And if yes, which ones would those be?
09:10Well, not at the moment, but I think IT stocks have seen a very good run up. So if one were to
09:16take into account stocks like Infosys, it's gone up by around 38% in the last three months. We've
09:22seen HCL Technologies up by around 36% in the last three months. TCS up by around 20% in the last
09:29three months. So I think it's a good opportunity to take some profit, to do some profit booking,
09:34and maybe enter, this is not the right time to enter, at least wait and watch would be the
09:41approach. Rekha, I just wanted your take on a few of the buzzers yesterday and one or two
09:47which might move today as well. Let's start with Mazgaon Docks and some of those defense names.
09:53Do you see a further upside? Mazgaon Docks was up over 7% yesterday. So what do you think about
09:59that? And let me add a Zomato for you. Zomato has already seen a slew of upgrades, very positive
10:05notes from across the scheme of brokerage houses. JP Morgan has now joined the list.
10:11Do you see that potential in the charts today, Srikanth?
10:16Yeah, I think after correcting for almost two, two and a half months, all these defense-related
10:22stocks are very close to their important support levels. And they are again rebounding from those
10:28levels. In fact, the rebound is much better than the expectations. Delivery-based volumes
10:35daily turnover is also increasing, which clearly indicates that all these stocks have now again
10:40started a pullback rally to their previous sell-off that we saw. Like Mazgaon Docks was
10:46around 5,800 levels from there, all the way it went to, it fall to 4,200 levels. And now again,
10:52it is rebounding. So we can see some, at least 5 to 10% sort of activity in the near term for
10:59all these different stocks. I'm not expecting stocks, all these stocks to cross their previous
11:03high. It is very difficult because the way they have fallen, I think they are going to take some
11:07more time to cross their previous highs. But yes, we are going to see some volatile activity and
11:11some range bound sort of activity in a very broader range. So for Mazgaon Docks, our target
11:16is around 5,400 based on its technical formation. We also like Hindustan Aeronetics, which is around
11:2348, 50, 4900 levels, but there also the stock can move to the levels of at least 5,300 or 5,400
11:30as compared to its previous high of 56, 5,700. So these two stocks are really showing a good
11:36amount of strength in this market. And for specifically Zemato, yes, it is correcting
11:42from the highs. Now the news flow is almost over. So we could see some more weakness in the near
11:48term, maybe 2, 30, 35 sort of levels we can see on the downside, but otherwise the broader trend
11:54of the stock is very strong. And at least in the next maybe few months, we can see the levels of
12:02270 or 275. So in the near term, I'm not expecting any major activity, but yes, if there is any
12:08furthermore correction or even at current levels, if there is a medium to long-term view, then look
12:12for taking long positions. So no firecracker kind of an opening like the implied was indicating.
12:18You've seen sort of a muted start. So let me first get your take on the indices, the Nifty and the
12:24Back Nifty. I'll start with Shrikant. Yeah, I think it is as per and on the expected lines,
12:32because I'm expecting market to remain in a range. I think till the announcement of this payroll
12:37comes, I'm going to say the data comes on the payroll on this Friday. I'm not seeing any major
12:42firework in the market. In fact, at higher levels, we need to be careful, but yes, it's an expiry day.
12:47And if we see the market is crossing 25,350, then only we can see trending activity in this market.
12:53Otherwise, I'm more on the stock specifics sort of trend to choose for. Bank Nifty, yes, there we
13:00are seeing some momentum, but HDFC Bank is the only stock which is actually helping the Bank Nifty
13:05to trade higher. But in case if we see the Bank Nifty is like starts trading above the levels of
13:1151,800, then there we can see good amount of shortcoming. So till the Bank Nifty is not
13:17crossing 51,800, I think we are going to see sideways activity. But broadly, I'm of the view
13:21that we need to be more and more stock specific, let the market trade around these levels.
13:27And till the markets are not crossing important levels, I think be more on to few stocks.
13:36Okay, Nirav, any stocks that you guys have researched recently, which even at these
13:42levels, you are be comfortable recommending is a great call that you'd given earlier on
13:46Deepak Fertilizers, I remember, fundamentally. Anything else that has caught your eye in recent
13:50times? Well, we've been looking at a couple of stocks, Philips Carbon Black and Himadri
13:57Speciality Chemicals. Philips Carbon Black has been in there traditionally in the carbon black
14:04business, but now they are entering into the specialty chemical space performance chemicals.
14:09They've recently done an acquisition of Aqua Farm for 3,800 crores. And the management is
14:16pretty confident that they will be able to grow five times in the next five years.
14:20So very, very optimistic outlook. And definitely this is a company to watch out for in the future.
14:26I think the same thing holds true in case of Himadri Speciality Chemicals,
14:30valuations are quite attractive. So we have started looking at these two stocks in a very
14:35serious way. No, sorry, I didn't get the rationale for Himadri, you're saying what?
14:41Himadri Speciality Chemicals, I think they are also moving up the value chain. So I think the
14:48valuations in both these companies are looking quite attractive. So we've started looking at
14:52both these stocks in a very serious way. Right. Well, that's Himadri Chemicals for
14:58you. The stock is seeing a big move of about 2% today. Nirav, did you track ECOS Mobility and
15:05the same Pradhan Guna Premier Energies as well and Style Bazaar tomorrow? Any of these
15:11IPOs, listings that have caught your attention for allocations?
15:18Oh, at this point of time, the frenzy is more towards listing gains. So I think most of the
15:23retail investors are just looking at applying with a listing gains on their mind. So I think
15:31not really seeing these companies in a very, very detailed manner.
15:36Shikant, Zomato 4% now. Brokerage upgrade came in on the counter and it's sprung up quite well.
15:44At 252, any trading strategy on Zomato?
15:50SILIC, now it is trading above its important resistance level of 245-247. And overall
15:57trend of the stock in last, if we see 10-15 days, then it is in the range of 240 and
16:04265-270 on the higher side. So max, we can see the levels of maybe 265-270 in the near term
16:12on the back of specific maybe reports or updates. Yes, the long term trend of the stock is very,
16:17very strong, I'm telling you. But in the near term, I'm expecting stock to remain in a range.
16:21But as it is rebounding from the lower boundary of the range, yes, we can again see some upside
16:26up to 265-270. So it's a buy, but with a stop loss at 240 for short term traders.
16:34You know, some of the pharma companies which are seeing a good run today as well. So Piramal,
16:40Pharma, Alembic, still Syngene, some of them. And we're speaking about the Biosphere Act and
16:49how that could have an impact. I want to see Biocorn has held on to its gains as well after
16:53yesterday. And yeah, Biocorn lost some of its gains. So it was up yesterday as well.
16:59Shikant, your take on some of these pharma counters that have been buzzing?
17:05Yeah, I think yes, most of the stock from the pharma space are really doing well. In fact,
17:10this particular sector is really doing much better than other indices. It is relatively doing
17:16outperforming to other space. And in that, if we go through with stocks, then
17:20stocks like Natco, Pharma, Biocorn, they are very close to their important resistance level.
17:26In fact, Biocorn yesterday broke the level of 375, which is positive. Based on its technical
17:32formation, it is heading for 410-415 in the near term. Natco also managed to cross the level of
17:401550-1575, which is positive. And here also, I'm expecting stock to move towards 1750 or
17:471800 sort of levels. But for other stocks, I think there is gradual upward activity that we
17:52are seeing. And in that, we like Mankind, which is around some 2400 levels. So from here, again,
18:01the stock can move to 2500. But in the long run, yes, Mankind can also do that.
18:06Well, thank you, Shikant. Thank you, Nirav. It's always good to talk to both of you
18:10and get perspective on the market.