Smart Money Betting On Largecaps With Safe Valuations | Trade Setup: September 27
Trade Setup | #Nifty likely to track Asia peers lower again with software firms extending their slide thus far. #BQLive
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NewsTranscript
00:00 Good morning and thanks so much for tuning into the Trade Setup. I am Nidhi Acharya.
00:04 Let's take stock of the global news flow first. The US September consumer confidence fell
00:09 to 103. The estimate was 105.5. In fact, even in the Korea region or Korea as well, the
00:16 consumer confidence has slipped below 100 if I'm not wrong. So world over, consumers
00:22 are not exactly confident about the economies. US stocks declined, stock futures are little
00:27 changed after sharp losses yesterday. Oil prices edged higher as markets focused on
00:32 supply tightness as opposed to the demand weakness that could come about. And other
00:37 new CIs built artificial intelligence to end rivalry with China. So that battle continues.
00:45 But that notwithstanding, the US markets essentially had a rough day. 1.5% for the NASDAQ if I'm
00:50 not wrong. S&P to 1.47% higher. Yields at about 4.5 to 4.53 if I'm not wrong, the last
00:58 time that I checked. So northwards of 4.5% for the 10-year yield, 4.53 that is. The volatility
01:06 is at nearly 19 now and the dollar index at 106. So all cues largely stacked against risk
01:13 assets and which is why you see the kind of corrective moves that we're seeing in world
01:17 over. India is probably faring a bit better, you have to admit, because even in yesterday's
01:22 session, I mean, we ended reasonably flattish, if you will. So in some sense, we are doing
01:27 better. The GIFT Nifty today might be indicating a start which is maybe a third of a percent
01:32 lower or flat. OK, flat currently at 5.35 in the morning. It was about or whatever the
01:37 last time that I checked very early morning, it was down about a third of a percent. So
01:41 either or, but certainly looks a bit wobbly. Now, Indian stocks, to my mind, the trade
01:47 set up for the day to day Indian stocks are likely to track the Asian peers lower again
01:52 and software firms are extending the slight thus far. Can that reverse today? Maybe because
01:57 we are seeing rotation in select names, particularly the ones with reasonable valuations. And today,
02:02 for example, there is I think a Morgan Stanley note which has raised the target prices on
02:06 HCL tech and a few others. So maybe software gets a bit of a bottom. But let's wait and
02:12 watch. And when I speak to smart money viewers, it continues to bet on large caps with safe
02:18 valuations to protect downside. You know, frankly, the conversation with smart money
02:23 these days is not about where is it that the largest alpha will come about. Most people
02:31 are now talking about how markets are not likely to run away. And you would want to
02:37 ensure that if there is a downtick, then your portfolio doesn't get hurt too much. So, you
02:42 know, people looking at the likes of HDFC, Bandiz, Jefferies note today, we come to that
02:47 as well, or any of the large caps which have hitherto underperformed. So and which is why
02:52 I think IT becomes interesting simply because it's had a bit of a corrective move off late.
02:57 And if the commentary from the companies is, is okay, then you might well see that being
03:07 a place to hide or a cocoon to hide for most people. So watch out for IT today as well.
03:13 A couple of listings, not that they were really well subscribed, but Sysil or Signature Global,
03:19 a modest subscription relative to what we've seen off late, particularly in the SME side,
03:24 but even on the main board. So let's see how they list, maybe a Oham listing, maybe some
03:31 upticks there, because there was over subscription four times and 11 times if I'm not wrong,
03:36 for Sigh and Signature Global respectively. Let's see how it goes. Stocks to watch today.
03:41 I'll start off with Adani Ports. It's offered to buy back more of its 2024 dollar bond.
03:46 The 2024 notes have jumped the most since April after the tender notice. Very likely
03:51 that the stock may react to this as well. Standard Disclaimer Adani Ports is owned by
03:55 the Adani Group, which also owns 14% stake in Quintin Business Media, has entered into
04:01 MOU for the acquisition of the balance as well. And QBML owns VQ Prime, which is a platform
04:08 on which you're watching this coverage.
04:11 Perhaps next, GST Authority has conducted search and seizure operations at the company's
04:16 Bengaluru manufacturing unit. Watch out for that one in case it reacts. Hindustan Zinc
04:21 and Vedanta Bodies has downgraded Vedanta Resources CFR to CAA2. So maybe these stocks
04:28 have a bit of a reaction. There could be interesting moves in Century Textiles. Mumbai spoke about
04:34 this yesterday as well, viewers, that they were expecting some very strong reactions
04:39 to Century Textiles Bengaluru unit. The stock didn't react too much yesterday. It started
04:45 off well, ended lower. Can it do different today? Because Birla Estates actually sold
04:50 out the phase one of that Birla Trimaya project that they launched. Within 36 hours of the
04:55 launch, 556 units booked, accounting for nearly 500 crores of booking value. So no doubt that
05:02 we've seen some serious traction in select real estate names. We've seen this happening
05:07 with some of the other real estate companies as well in the past, where their good properties
05:10 are getting lapped up, left, right, center. So maybe Century Textiles, which had an off
05:15 day yesterday, could have a good day today. Suzlon, well, difficult to factor what could
05:21 happen, but Dilip Sanghvi and Associates have terminated the shareholders agreement signed
05:30 in February 2020. So do watch out for Suzlon in case it reacts negatively. If it does,
05:38 I don't have an idea, but maybe. Then Healthcare Global Enterprises, CVC, set to explore a
05:42 sale of a controlling stake in the Indian hospital. Disaster of Bloomberg, note that
05:46 I saw. So watch out for Healthcare Global in case that reacts. NDTV has gotten the government
05:54 nod for three news and current affairs channels. Again, standard disclosure. I don't know about
05:59 the pricing. I think the pricing seems off, but let's get out of this plate. But NDTV
06:05 may react a little bit. Watch out for that one. IndusInd Bank has announced a multi-year
06:10 global partnership with ICC. The bank will have access to a suite of branding and content
06:15 assets. I don't know viewers how to read into this. I mean, it's an interesting tie-up.
06:21 I don't know if it's an exclusive or no, but it's an interesting tie-up for sure. And maybe
06:25 just maybe it helps us talk today. Who knows? Nothing dramatic, but well, ICC is hot. Cricket
06:32 World Cup coming around. Who knows? Maybe there's a bit of a reaction there. So do watch
06:36 out for that one.
06:42 Then there are a few other stocks that one should be mindful of. Excuse me for that phone
06:51 ring. But there are a few other stocks that one should be mindful of. One of them is HDFC
06:57 Bank. Jeffries has come out with a note on HDFC Bank with a buy and a target price of
07:02 2030, which is a 33% upside. They say it's a second dimension is taking shape due to
07:07 being the seventh largest bank by market cap. Investors may consider the stock as a part
07:12 of global portfolios, not just in emerging markets or being compared to Indian peers,
07:17 but a part of global portfolios. The track record of high growth and compounding that
07:22 we've seen in HDFC Bank helps. They see a 17% CAGR in earnings over three years and
07:29 an ROE of 17% from FY25, being well ahead of global banks, 3 to 7% CAGR. Valuations
07:36 look attractive at 2.2 times forward price to book. Well, multiple people, multiple times,
07:43 like I said, Smart Money also told me about HDFC Bank. Jeffries notes speaks about HDFC
07:47 Bank. Valuations are certainly attractive. Can we see some traction today? Well, time
07:52 will tell, but do watch out for HDFC Bank. Other brokerage recommendations include the
07:56 Tech Mahindra, which has been cut and underweighted Morgan Stanley. Price target of 1210 implies
08:01 a 5.6% discount from last price. Or Sign, which has been raised to overweight at Morgan
08:06 Stanley. Price target 2000 rupees implies a 20% increase from the last price. And Alitabella
08:12 Capital, a retail new buyer at Jeffries. Price target 215 rupees implies a 20% increase
08:17 from the last price. So those are two or three brokerage names. I think they've also, Morgan
08:22 Stanley is also up the target prices on HCL Tech, for example. So do watch out for IT,
08:27 might just get a bit of a breather because of this note today. And Nomura has raised
08:32 India to an overweight rating relative to the rest of the world. So be mindful of that.
08:37 Well, viewers, that's the long and short of the trade setup today. Thanks so much for
08:41 tuning in. A clutch of conversations including Devina Mehra. Do tune in for that.
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