Profit 360: Sensex Closes At Record High | NDTV Profit
- Sensex closes at record high
- Kalyani & Oberoi family feuds
Tune in to 'Profit 360' with Mallica Mishra for these and more top news of the day. #NDTVProfitLive
- Kalyani & Oberoi family feuds
Tune in to 'Profit 360' with Mallica Mishra for these and more top news of the day. #NDTVProfitLive
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00:30end marginally higher with the media index leading the games, FNCG plunges on policy changes.
00:38One of India's largest IPO so far, Bajaj Housing Finance marks a stellar listing on the bosses,
00:45debuts at a premium of 114% over its IPO price,
00:48but analysts don't expect the momentum to sustain for a prolonged period.
00:52Gold shoots to record highs of over Rs 75,000. This is on the back of a potential rate cut by
01:00the US. Two major business families are in court. Bharat Forge's Baba Kalyani and siblings in Pune
01:10and the Oberoi family in Delhi are locked in fights over wills.
01:16Maharashtra's Ratnagiri to get big Rs 10,000 crore defence project and Navi Mumbai to have
01:22the country's largest data centre, says State Industries Minister Uday Samant exclusively to
01:28NDTV. Boost to sugar stocks as government allows production of rectified spirit
01:36and extra-neutral alcohol from sugarcane juice and bee-heavy molasses.
01:43The time has not yet come for an EV in the light commercial vehicle segment,
01:47says M&M's Vijay Nakra at the launch of new mini-truck Vero.
01:55Two of the big four auditing firms are in trouble after Deloitte being banned from
01:59China for three months. PWC faces a six-month ban over accounting concerns.
02:08Shogun becomes the first non-English series to win the best drama at the 2024 Emmys.
02:13The Japanese historical epic won a total of 18 awards.
02:44Benchmarks have resumed its rally. Media emerges as a top sectoral gainer and FMCG takes a knock
02:51due to policy changes. My colleague Neeraj Shah is joining us for a quick market wrap.
03:14There was some action on the Bajaj twins salt in trade today with reason.
03:20This is post the listing of Bajaj housing finance. This is of course because of the edible oil and
03:26therefore Britannia etc all of them corrected. On the flip side, metals and economy facing
03:31stocks. So NTPC, JSW, Hindalco, L&T etc and banks did well in trade. But the big listing
03:38of Bajaj housing finance and that stock should come up on your screen next because on a remarkable
03:42day of trade for the new kid on the block. Arguably one of the finest listings of the year
03:47for a company of that size to have the kind of listing that it has had is quite stunning really.
03:52So good showing by Bajaj housing finance in the session today. What also did well,
03:57by the way, individual stocks first. Bombay stock exchange, hopes of the NSC IPO coming
04:02up sooner, the co-location case some relief there and Bombay stock exchange as a stock
04:06did remarkably well and had about 16 or 17% higher. 17.82, 3420 and counting for BSE. So
04:14this one did really well for itself in the session today as well. And if you just pull up the BSE
04:19finder, you will see a list of others. Adani Green, splendid show. Dixon, splendid show.
04:24Thermax went up about 6.5%. There was strength in KRBL because of that Basmati rice export ban
04:30removed. BCBL 5.5% higher and Godfrey Phillips about 10 odd percent. What did very well or what
04:36didn't do well. Stocks like PNB, LIC housing finance, so the housing finance names came off.
04:41Today IT took a bit of a stake. Birla Soft and KPIT, two within the same stable, if you will,
04:46or sister concerns of the past corrected a bit in trade today. But that notwithstanding,
04:52it belonged to Bajaj housing finance in the session today. Starting tomorrow, the Fed
04:58meet comes into focus. We get the decision on Wednesday and therefore it becomes extremely
05:03crucial to follow rate sensitives in particular and maybe the market just consolidates and we
05:10have individual movers ruling the roost. Well, thank you for that market rap,
05:14Neeraj. Now, if there's one listing that needs to be spoken about, that's Bajaj housing finances
05:20debuting at a premium of 114%. But what is driving these gains and how are the
05:25valuations like compared to its peers? Harsh joins us with an analysis.
05:30First off, I want to talk about what's standing out in Bajaj housing because that also has some
05:37amount of perspective as well as impact on how peers are really looking against or versus Bajaj
05:42finance. So first off, with regard to growth, this one, as we all have discussed multiple times,
05:48growth has been extremely strong. 72% loan book CAGR currently loan book at roughly one lakh
05:54crore, growing at 30% plus even now. Also, in terms of asset quality, the NPA's ratios are
06:01best in class. The net NPA ratio is just about 0.1% even now. Absolute best in class in terms of
06:08versus its peers as well as versus anything we've seen essentially in terms of NPA ratios.
06:15Third is with regard to one key aspect and possibly why the stock is on at least has listed
06:23in a very strong fashion. It's because of the free float on the stock. Now, currently,
06:30just about 11% is owned by non-Bajaj shareholders. And out of that, a large chunk, a majority of that
06:3811% is in lock-in. And therefore, a very small component of the capitalization is in free float.
06:47And therefore, your demand far exceeds supply. Likely over the next two to three months,
06:54that may unwind slowly. So keep an eye out on that. What the valuations look currently like
07:01at listing at 150, price to book was at 6.1 times forward. At 70, of course, it was sub three times
07:08price to book forward. At 165, which is where it is currently, it's at 6.7 times price to book.
07:16And at 146, which is the day's low, it was just at about six times price to book.
07:21Let's compare those valuations with peers. First off, Bajaj housing is currently at 6.7
07:27versus Awas at 3.1, Aptis at 3.6, which are some of the private ones. 2.9 is where Aadhaar is at.
07:34And PNB housing, which is the larger, slightly larger in size in terms of book is at 1.8 times
07:40price to book. Now, in terms of what has happened to some of these housing financiers, let's look
07:46at it in perspective. One month returns have been extremely strong. LIC housing has given a
07:5110% return over the last month. PNB housing, 38%. Aadhaar housing, 17% one month returns.
07:59Awas financiers, 10% and Canfin homes, almost 12% returns. Today, of course, you're seeing some bit
08:05of likely profit booking on some of these counters. Some of them really falling sharply,
08:11LIC and PNB in particular, seeing some bit of quite a sharp fall, both 6% and 5% respectively.
08:19So that's largely the context and the way in which things are evolving in a very interesting
08:24housing finance space. Thank you for breaking that down for us, Harsh. After the stellar listing,
08:30Sanjeev Bajaj spoke to the media and said that he sees a 12 to 15% credit growth in the housing
08:37finance industry. He added that investors should expect high quality growth for Bajaj housing.
08:43Here's a slice of that conversation. We've had very strong growth, but this is in the background
08:50of a very strong, consistently growing economy. And if you look at credit cycles in India,
08:57we expect steady credit growth at 12 to 15% in the housing industry. And on the back of that,
09:04we are enthused that we can continue to grow strongly. The economy is showing very strong
09:11tailwinds and that's what gives us this comfort. Shareholders should expect a business that grows
09:19with high quality, a high level of corporate governance that brings the right blend of
09:24technology in this particular business and sustainable sustained growth with high focus
09:33on quality of the business and a diversified book is what we look forward to building.
09:40But the question is that should you buy, hold or sell the Bajaj housing finance?
09:45Here are some expert views for you. Take a look.
09:47Obviously, there has been liking for such names where there is a pretty strong promoter
09:55background. Along with that, the quality of growth is pretty good and the compounding
10:03growth is also compounding in nature. Obviously, people are going to like it up.
10:06It's a little bit stretched for a while. I think a lot of people are right now in
10:13a kind of a happy mood right now. Gradually, we think there could be some
10:18consolation or correction is likely. But over a mid to long term period of time,
10:21we continue to like this name. I think they will look quite better just like the parrot.
10:29We certainly believe that this space is here to sustain. And there are two,
10:33three reasons if I could enlist here. One being the deep marketing strategy and penetration,
10:39especially in the non-home loans front. So, be it LRD portfolio, be it developer finance portfolio.
10:46So, BHFL is poised to go deeper markets, tap both internal as well as external sourcing
10:54through the enablers, through connectors, through their digital platforms, which they will be
10:59banking upon. So, there is a lot of scope there for increasing the AUM base right from the sourcing
11:06per se. If there's a good quality paper, good management, great business strength,
11:15you will start seeing the IPO listing well. And I think that's what's happened. The brand
11:21is fantastic to say the least. And just on the housing space for a minute, it's very interesting.
11:28If we got one thing positive in this budget, which the government came out in for F2 2024-25,
11:34it was the housing space. Please remember, PMAY or affordable housing has been pushed
11:41pretty much by the government. And that is the single most important core area for them. So,
11:46Bajaj housing may not be fitting into it, but the housing area is growing between 12% to 15% per annum.
11:55So, my idea here is not to accumulate at this point because it is commanding a strong premium.
12:01It is currently trading at 159. So, my idea is just those who didn't get any allotment,
12:09they can now buy the shares. Now, it is a secondary market listed already, we can say.
12:14So, they can buy the shares later on when the price comes somewhere near to 125 zone. But here,
12:22it is really highly priced because now it is commanding the price to book multiple of more than
12:27six times, five to six times. So, which seems to be higher.
12:32Well, we hope that views brought in some clarity on Bajaj housing finance. Now,
12:36the IPO buzz in the primary market is all set to continue. Also, with seven new issues and
12:4113 listings scheduled this week. This include two on the main board and five in the SME segment.
12:48The Arcade Developers IPO has begun today, and it will end on the 19th of September. The IPO
12:54is a book-to-build issue of 410 crore rupees. Another IPO on the list is Cross, which listed
13:01on NSC at 240 rupees per share. Meanwhile, Toll & Styles listed at a premium of close to 1% at 228
13:11rupees on NSC. Now, gold prices have soared to an all-time high, crossing 73,600 rupees. But
13:19what's driving the sudden rise? If we talk about India, then the biggest festive time is here.
13:24Ganpati festival is ongoing. We just celebrated Onam and Durga Puja, Dussehra, Diwali is around
13:29the corner. So, this has resulted in the price hike of gold. Now, if we talk about the global
13:35reasons that are driving the surge in gold prices, so far, one key factor could be the anticipation
13:40of interest rate cuts by the US Federal Reserve. If the Fed reduces rates by 50 basis points,
13:46it could give gold a significant boost. Now, a lower interest rate environment generally benefits
13:52gold. As a weaker dollar and reduced opportunity costs make the precious metal more attractive.
13:58Now, meanwhile, reports of a second assassination attempt on the Republican
14:03presidential nominee Donald Trump have also sparked increased demand for safe-having assets,
14:08despite Trump emerging unharmed and the suspect being apprehended. Additionally,
14:13the upcoming US election could play a role in gold's trajectory alongside ongoing
14:18central bank purchases and heightened demand due to geopolitical tensions in the Middle East
14:23and Ukraine. Coffee is set to become more expensive. The cost of the premium Arabica
14:31beans have soared to the highest in 13 years. This is on the back of persistent supply disruptions.
14:37The future surge by 2% to over $2.6 per pound in New York, which is the highest since 2011.
14:44The prices have increased around 40% this year due to shortage of the cheaper Robusta beans,
14:50which fuelled the demand for Arabica beans. The key reason for the surge in prices roots
14:55from concerns over the worst drought that the top coffee producer Brazil has seen in decades.
15:02Sugar stocks rallied today after a policy change. Now, the government has allowed rectified spirit
15:09and extra-neutral alcohol production from sugarcane juice and bee-heavy molasses.
15:14We spoke to Atul Chaturvedi of Shri Renuka Sugars earlier today about this and he emphasised that
15:20key focus should be on capacity utilisation rather than expanding production capacity.
15:4016 billion litres. So that is sufficient to take care of both total alcohol as well as rectified
15:49spirit and the government's target of 20% and more. So the government has also permitted about
15:562.3 million tonnes of rice to be diverted to ethanol. So I don't think there's any need for
16:05expanding the capacity. But what will actually happen is the capacity utilisation of the sugar
16:12industry, which has suffered big time, would definitely improve with this.
16:20Well, it's not just sugar stocks, but rice stocks are buzzing too. Stocks gained after the
16:26government scrapped minimum export price of basmati rice. My colleague Mahima joins us
16:32for more on this. Mahima, what are you picking up?
16:36The government has scrapped the minimum export price for basmati rice and this will benefit a
16:42lot of rice exporters. Now, prior to this, in October FY23, they had decreased the MEP from
16:521200 dollars per tonne to 950 dollars per tonne. And on the back of this, we are expecting that
16:58prices of basmati rice at wholesale level are expected to increase from 55 to 65 per kg.
17:03Now, this could possibly benefit and we are also seeing a significant up move in all of these
17:07stocks. This includes LTFoods, KRBL, Chamanlal Setia Exports and GRM Overseas Limited. Now,
17:13India is world's top rice shipper and the limiting sales on kheer rice variety
17:19had happened because of this MEP prices. But going forward, because of scrapping this MEP
17:26price for basmati rice exports, we'll see a significant upsurge when it comes to exports.
17:31In terms of LTFoods, LTFoods has reported a sales growth of 17% in the rice segment
17:35and the company is optimistic about achieving a double digit growth in the international markets.
17:39KRBL is a key player when it comes to basmati rice exports and it has maintained a 6% steady
17:45share in the US markets and it's also exploring into markets like Iran, Iraq and Saudi Arabia.
17:50Chamanlal Setia Exports on the other side, exports contributes roughly 89% of their total sales
17:56and GRM Overseas in FY23, roughly 76% of their total shares was exports. So,
18:01all of these four companies will stand to benefit post this.
18:05But as basmati rice catches attention, the Indian government has hiked customs duty on palm,
18:10soybean and sunflower oil from 12.5% to 32.5% and this change will come into effect
18:17from the 14th of September. Here again is Mahima with the impact on this decision.
18:26FMCT stocks and edible oil producer stocks are in focus after the government has hiked basic
18:31custom duty for refined palm oil, soybean oil and sunflower oil from 12.5% to 32.5%.
18:37Now, this is a significant uptick of 20% for custom duty when it comes to the edible oil
18:42prices. Well, when it comes to the import and export data for edible oil, India is a net
18:49importer and palm oil imports were around 1.2% of the total Indian imports between April to June
18:55and the top importer category was vegetable oil. Now, India as I mentioned is the largest
19:00importer of palm oil and it imports from countries like Malaysia, Indonesia and Singapore. Now,
19:05this could benefit the local edible oil producers like Godrej Agroway, Adani,
19:10Wilmar and Patanjali Foods. However, FMCT companies could get affected due to this because
19:15edible oil is a major raw material for FMCT companies. It is used in production of chocolates,
19:20biscuits, cakes, cosmetics, soap, shampoos and washing agents as well and palm oil can make up
19:26to 20% of weight of the total pack of instant noodles as well. Now, FMCT companies that import
19:33palm oil include HUL where it imports palm oil from its wholly owned subsidiary Unilever
19:38Oleochemical Indonesia and HUL is one of the largest end users of palm oil derivatives.
19:45Now, this could less impact companies like Nestle and Colgate because they usually source their palm
19:50oil locally. However, we are seeing significant impact in terms of Imami, Jyoti Labs, Godrej
19:55Consumer and Dabur as well. So, this is the major reason why FMCT stocks are under pressure today.
20:02Thank you for explaining that to us Mahima. Now, in an exclusive with NDTV, Maharashtra
20:08Industries Minister Uday Samant announced two big projects worth over 10,000 crore in Ratnagiri
20:14and Navi Mumbai. He says that these ambitious projects will bring the state on the global stage.
20:19Here's a slice of that conversation for you. Watch it.
20:49Moving on,
21:19the Kalyani family inheritance battle is continuing to gain headlines. Gauri Shankar
21:24Kalyani has filed to ratify his mother's new will. My colleague Vishwanath Nair now joins
21:29to explain this inheritance dispute and the latest set of developments in the story.
21:36Right. So, the debate between the Kalyani brothers as well as of course,
21:40sister Sugandha has taken a new turn now with Gauri Shankar Kalyani coming out with a new will
21:49by his mother, Sulochana Kalyani, who passed away last year. Now, according to this new will,
21:54certain portions of jewellery as well as land passes owned by the Kalyani family, by the Kalyani
22:01matriarch will pass on to Gauri Shankar Kalyani. That's what the new will states. Of course,
22:05this comes in at a time when there's already a case going on in the Pune district court
22:11to verify a 2012 will by Sulochana Kalyani, which is still not clarified yet.
22:18So, this new will will come into dispute. Of course, some claims have been made within this
22:23will where Sulochana Kalyani seems to be suggesting that she was instigated by Baba
22:28Kalyani to file certain cases against Gauri Shankar Kalyani, which the Baba Kalyani camp
22:33of course is debating. They are disputing this and they are saying that they were not responsible
22:38for any kind of issues between the mother and the youngest son of the family.
22:43Currently, of course, there is already an inheritance dispute going on between Baba
22:48Kalyani as well as Sugandha Hiramath's children, where both the nephew and niece of Baba Kalyani
22:55are seeking an equitable distribution of the family's assets. So, now it looks like there
23:01was a three-way battle between all three siblings and their children as to how exactly the Kalyani
23:06family wealth will be distributed amongst themselves.
23:11Well, thank you for explaining that to us, Vashi. Now, there's another dispute in the news as well.
23:16The Delhi High Court has stepped in amidst the ongoing Oberoi family dispute. The High Court has
23:22temporarily blocked the share transfer in EIH Limited Oberoi hotels and Oberoi properties
23:29that were owned by the late PRS Oberoi. We now have my colleague Charu Singh joining us with
23:36to explain the overall dispute and the Delhi High Court's recent decision on the matter.
23:43Understand the dispute in a very easy way. We all know that the late PRS Oberoi owned the
23:49Oberoi properties and the hotels. Now, his daughter Anastasia Oberoi is on one side and
23:54her brothers and a cousin are on the other side. While she is saying that a will dated March 2021
24:01and a codicil of 2022 is the valid one which says that 50% of the shares or 50% of the stake in the
24:08properties are supposed to go to her and a trust of which she is the sole beneficiary. However,
24:13her brothers, her siblings and her cousins are saying that the will on which her case is relied
24:18upon is completely invalid because there is an oral will from the year 1992 which has something
24:24completely different in their favor to say. And that is why the Delhi High Court has said that
24:30till the time they come up with a new order or till the time they get to hear the case in its
24:34entirety, no shares will be transferred and has given out an interim that is a temporary order
24:40saying the same. Thank you for that Charu. Mahindra has unveiled the Vero range of
24:47light commercial vehicles priced from 7.99 lakh rupees targeting intracity cargo transport.
24:54The range is available with diesel and CNG engines in five variants. The company aims to
24:59offer the lowest total cost of ownership in the LCV segment. Adding to that in an exclusive
25:05interview with NDTV Profit, Vijay Nakhra, President of the Automotive Division at
25:11Mahindra and Mahindra said that the LCV segment is not yet ready for a transition to electric vehicles.
25:18In this segment right now for the kind of loading that gets done we will need a much larger battery.
25:25The overloading is higher in this segment which means the draw of power from the battery is going
25:30to be higher. That doesn't help with the economics in this segment. So I think EVs as far as the
25:36two to three and a half ton segment payload is concerned is going to take a little bit of time
25:41and hence the preferred fuel right now is going to be diesel, CNG and multi-fuel.
25:48Prime Minister Narendra Modi inaugurated the 20.8 kilometre long corridor of the second phase of
25:56Ahmedabad metro rail. This metro will run from Ahmedabad to Gandhinagar. The metro rail spans up
26:02to 21 kilometres covering a total of eight new metro stations and providing seamless and efficient
26:09transportation services. Soon after inaugurating the metro rail extension, Prime Minister Narendra
26:14Modi travelled on board the metro rail and interacted with passengers.
26:21Auditing firms continue to come under fire. Chinese authorities have banned accounting firm
26:27PWC for six months and slapped a fine of 441 million yuan over the firm's audit of a failed
26:36property development company. This has raised questions over the effectiveness of their audits
26:41and potential flaws within the industry itself. Here's the latest on that from Pallavi Nihata.
26:47Right, so Chinese authorities have banned PWC. This is for a period of six months and it has
26:52also been fined 400 million yuan or about 56.4 million dollars over its involvement in the audit
27:00of collapsed property developer Evergrande. Now this comes on the footsteps of China's finance
27:07ministry also having suspended Deloitte's Beijing office for a period of three months and this was
27:13in March citing serious audit deficiencies in its work with Huarong between 2014 and 2019.
27:21The firm was in fact fined 212 million yuan that's about 30.8 million dollars or more than 25 times
27:30the combined fines that had been meted out to accounting firms in inspection that year. The
27:36accounting firm had failed to properly look into the status of Huarong's underlying assets,
27:42ignored compliance approvals on major investments as well as failed to apply a sense of skepticism
27:49in its audit work on Huarong. That's what Chinese authorities had had to say. Globally as well
27:55Deloitte was under fire regarding the effectiveness of its audits when it missed a
28:01major fraud at Nigeria's Tingo group. Tingo's books that had been audited by Deloitte listed
28:08a cash balance of a staggering 462 million dollars but subsequent investigations by the SEC
28:16revealed that the company only had about 50 dollars in cash. Now the US security securities
28:23regulator had also charged Deloitte's China arm with falling woefully short by having clients
28:30complete their own audit tasks. Now this was in September 2022. Closer home in May 2023 as well
28:40the Supreme Court of India ruled against audit firm Deloitte Haskins and Sells LLP and BSR Associates
28:47LLP stating that an inquiry against an auditor cannot simply be terminated because the auditor
28:55had resigned. Such cases continue to raise a broader debate on whether auditors are prioritizing
29:02ticking boxes and simply matching up to technical standards over actively seeking out fraud.
29:10Well those were some really shocking revelations. Thank you for that Pallavi.
29:14That's all the time we had on this edition of Profit360.
29:17Stay tuned to NDTV Profit for more news and updates.
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