HDFC Bank, Wipro ADRs Plunge | India Market Open | NDTV Profit - video Dailymotion

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- Global news flow & cues - Stocks to watch, trade setup, F&O strategies - #HDFCBank ADR falls nearly 7%   Samina Nalwala and Tamanna Inamdar bring you all this and more as we head towards the 'India Market Open'. #NDTVProfitLive

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00:01:39 >> Hello and welcome to India Market Open.

00:01:41 Midweek, it's gonna be a morning of consolidation.

00:01:44 Maybe a little bit of pain, especially with counters like HDFC and

00:01:47 Wipro guys.

00:01:47 It was not a great quarter, I believe, for HDFC, Megan.

00:01:51 I think the markets will punish the stock.

00:01:54 >> Morning, Agam, morning, Samina.

00:01:56 And as you've been tracking and pointing out, overnight the ADR 7% down.

00:02:02 HDFC, the big story today on the show.

00:02:04 We're gonna be tracking it very, very closely.

00:02:07 And looking at the positions building up there as well, Agam.

00:02:11 >> 100%, so I'm gonna start by taking a very quick look at how things are panning

00:02:15 out when it comes to the benchmarks.

00:02:17 And maybe we can talk a little more about HDFC bank.

00:02:22 But for now, of course, there has been a little bit of weakness which has come off.

00:02:25 Yes. >> Yeah, but

00:02:26 we'll just start with the global flow.

00:02:28 >> Yes, yes, yes.

00:02:29 >> And look at what's happening overnight.

00:02:31 Simply because if HDFC is going to bring the mood down,

00:02:36 global cues aren't helping either.

00:02:38 It's been a tough kind of overnight trade in the US.

00:02:44 And it's all because of one gentleman called Christopher Wallen.

00:02:48 Let me place that in context for you.

00:02:50 So your Dow was down about 200 points overnight.

00:02:55 You've seen Europe also down in the dumps where a number of Fed officials have been

00:02:59 making comments at Davos.

00:03:01 And you saw the 10-year Treasury jump up back about over 4%,

00:03:08 up about 12 bits at one point.

00:03:10 So what has happened is that Governor Christopher J.

00:03:15 Waller has made a series of comments in a speech in Washington

00:03:20 about what he thinks is going to happen with interest rates.

00:03:23 These were echoed by other officials in Davos as well.

00:03:26 And I'll just go through the key points that have spooked the market.

00:03:29 Because he's saying rate cuts need to be methodical and careful when they begin.

00:03:34 No reason to move quickly and cut rates rapidly as we did in the past.

00:03:38 And this is the key sentence.

00:03:41 They say that Fed can cut rates this year if inflation doesn't rebound.

00:03:45 But you need more information to confirm if inflation is moving down to the 2%

00:03:50 target.

00:03:51 It's a mix because he also says that the data we're seeing right now is as good as

00:03:54 it gets.

00:03:55 But that has been the big overnight mover, so to speak.

00:04:00 Quick word on Brent, which continues to be under pressure with what's happening

00:04:05 in the Red Sea.

00:04:06 Must say that the dollar has rebounded, so that's balancing things when it comes

00:04:09 to crude.

00:04:10 On the one hand, you have the Red Sea issues.

00:04:13 On the other hand, you have a strong dollar.

00:04:15 But just to add to that, Shell has now suspended shipments through the Red Sea

00:04:20 indefinitely.

00:04:22 Asian markets, quick look at that as well.

00:04:24 And all down in the red, a slew of economic data has come up which is showing

00:04:29 that China economy is going to take longer to recover.

00:04:32 Look at the Hang Seng, down nearly 2.5%.

00:04:35 The only outlier being Japan, which is continuing to defy those trends and

00:04:40 showing a positive signal.

00:04:42 So that's the global sort of setup, Agam.

00:04:45 But domestically, the focus on HDFC and whether the Nifty can stay above that key

00:04:52 marker after a very, I would say, shaky day yesterday.

00:04:56 Yeah, yeah, yeah.

00:04:57 So the range has shifted slightly lower, but there hasn't been a big change as such.

00:05:02 Of course, we're keeping an eye on 22,000.

00:05:04 That's where the big resistance is, or pardon me, the support is.

00:05:08 On the higher end, of course, we're keeping an eye on 22,500.

00:05:11 The Bank Nifty, of course, will be in focus considering HDFC Bank has a 33%

00:05:15 weightage on the Bank Nifty.

00:05:17 That's significant as it is, which means that 47,500 on the lower end is what we

00:05:22 are keeping an eye on as far as the Bank Nifty is concerned.

00:05:25 Sure, the ADRs are lower by as much as 7%, but, well, you know, there are all sorts

00:05:30 of guesses.

00:05:32 And I reckon to a certain extent, I'm sure a lot of bulls would hope that HDFC Bank

00:05:38 doesn't fall by as much as 7% in Indian markets.

00:05:42 It's unlikely, but it's a possibility.

00:05:45 Before we talk about HDFC very quickly, currently, FIIs are 66% longs in

00:05:52 index futures, and this is on the higher end.

00:05:54 So if we do see some amount of weakness, there's a good chance that we could start

00:05:59 seeing unwinding and hence the precipitation downwards.

00:06:02 That is something of a possibility.

00:06:04 And the Nifty-Put card ratio has now edged lower from 1.4 to 1.2.

00:06:09 So that's pretty much on a neutral range, but I reckon that that particular number

00:06:13 will not be as consequential as the kind of implications that HDFC can have.

00:06:17 And just quickly on HDFC Bank, while I know we are hoping that we don't see a 7% cut,

00:06:23 but let's not forget that global cues are negative.

00:06:25 It's unfortunately a day when everything's looking a little more gloomy than usual.

00:06:29 A 7% cut on the ADR is the lowest or the biggest fall we've seen on that ADR since June 2022,

00:06:38 when things were very different today than they were then.

00:06:42 And while the numbers are largely getting a thumbs down, let's keep this in perspective.

00:06:47 They're not hugely disappointing.

00:06:48 And HDFC Bank always and always remains a buy on dip strategy.

00:06:53 So even if you get that big gap down, which could potentially be in the range of 4% to

00:06:57 5%, there's a very good possibility there could be some buying that could emerge and

00:07:01 that gap could get sort of squeezed.

00:07:03 But that's HDFC Bank.

00:07:04 Like Agam said, we will be discussing it in more detail in just a few minutes.

00:07:08 But another tool that I want to talk about, Agam, and they've been active in the F&O space

00:07:11 as well, is Asian paints.

00:07:13 Now this is the other big daddy that reports numbers today.

00:07:16 Growth is expected to come in.

00:07:18 Net profit growth is expected to come in 30% higher.

00:07:22 Volumes are expected to grow in the 11% to 13% range.

00:07:25 October and November were pretty good for Asian paints, but December, I believe, was

00:07:29 muted.

00:07:30 So there has been a pretty strong festive demand, but you could see that petering off

00:07:35 in the month of December.

00:07:37 Now the other thing that I noticed about a couple of brokerages have maintained, and

00:07:40 of course, you can come in on valuations as well, is the fact that margins may be under

00:07:45 pressure.

00:07:46 You know, the days of the likes of an Asian paints, you know, having a good run or being

00:07:50 the only player in the industry, just because of strong branding has changed.

00:07:55 And now these guys are giving up market, in order to gain market share, are compromising

00:07:59 hugely on margins.

00:08:00 And that is a bit of a concern.

00:08:02 So while the numbers on the face of it could be a beat, the street may not be too disappointed.

00:08:07 Fact remains is margins is what you really want to watch out for, because if you're going

00:08:10 to gain market share, it's a volume game, right, in the paint business.

00:08:14 Margins are going to be under pressure.

00:08:15 But and I think on the F&O space as well, there was some activity that we picked up

00:08:19 on yesterday.

00:08:20 That certainly was, Samira.

00:08:21 Before I go to that, I want to point out, over the last two to three years, Asian paints

00:08:26 has always traded at a discount to its larger peer, Berger paints.

00:08:31 Now if you consider the F524 price to earnings ratio, that stands at around 54 times, Berger

00:08:37 paints is slightly lower.

00:08:39 So this is potentially the first time in many years that Asian paints is in fact, a slightly

00:08:44 more expensive as compared to Berger paints.

00:08:47 But what currently of course, it is well at around 60 odd times and this is of course

00:08:51 trailing price to earnings.

00:08:53 But it is also lower than the 60, 65 odd times its previous five years historical value.

00:09:00 So there's no doubt about the fact that Asian paints has some, you know, space left on the

00:09:05 upside.

00:09:06 But of course, a lot will depend on the kind of earnings that we get out there.

00:09:10 Just to, come on this one, I've got literally picked this up on Indigo paints.

00:09:14 So of course, not earnings related, but you had American investment firm, which is small

00:09:19 cap world fund that sold 1.5% stake in a pretty large block deal yesterday.

00:09:23 So that counter again, could be one to watch out for.

00:09:25 But Tamanna has been highlighting how crude is in focus.

00:09:27 And I think that's the other thing that could be a huge problem for Asian paints.

00:09:31 So it's a double whammy on margins, not just volume share, but also the fact that crude

00:09:34 is a problem.

00:09:35 Absolutely.

00:09:36 Crude is a problem.

00:09:37 I think also in the entire paint sector, look at the increased competition and a number

00:09:42 of new entrants coming in.

00:09:44 So we're going to have to wait and see how that plays out.

00:09:46 You have the big daddy, but will that, you know, market share continue.

00:09:56 So yeah, Asian paints definitely.

00:09:57 I think the only thing working for Asian paints right now is its valuation, but we'll move

00:10:01 on very quickly because I know Vishy is in the studio, is poly cap.

00:10:04 I mean, look at the move on poly cap.

00:10:06 Agamben, you obviously have seen activity on it.

00:10:09 It came out of, it wasn't an F&O ban actually last week.

00:10:11 And then there was a clarification from the company.

00:10:14 They do report their earnings tomorrow.

00:10:16 So a very quick update on that.

00:10:18 Remember, they've had a very solid second quarter, one of the best quarters they've

00:10:21 ever posted in terms of earnings is what we saw last time around.

00:10:25 They posted a higher quarter profit of 430 crores.

00:10:29 Remember, they are market leaders in the CNW industry.

00:10:33 Companies like Jefferies have actually upgraded the counter despite all the event based news

00:10:37 flow that we've been hearing about.

00:10:40 The comp stocks made a big move.

00:10:41 It's again, did mention some activity in the F&O space.

00:10:44 Earnings are tomorrow.

00:10:45 Brokerages have upgraded, but I guess Tamanna has got some negative sort of news that she

00:10:50 wants to highlight as well.

00:10:51 No, no, nothing negative about it.

00:10:53 We've been speaking to every expert on poly cap and no one is convinced about these brokerage

00:10:58 reports.

00:10:59 But what I wanted to point out, not negative or positive, factually, it's fairly rare for

00:11:05 a communication from the income tax department in such detail on something which is ongoing.

00:11:10 They didn't mention poly cabinet, but it was very obvious who they were talking about and

00:11:16 the figures that they put out.

00:11:18 It's rare for them to put out so much detail unless they're sure that they have something.

00:11:22 Sure, sure, sure.

00:11:23 What about F&O?

00:11:24 Was it, was it, was it any sort of movement in anticipation of earnings tomorrow?

00:11:29 So I reckon that when the income tax news came, the factoring of any positive earnings

00:11:37 was taken out of the picture.

00:11:39 Sure, we all know that poly cap is not going to just have a fantastic year, but potentially

00:11:43 fantastic couple of years.

00:11:46 That said, we know that this overhang remains and while we have seen about a short covering

00:11:52 from its lows of around 3800 rupees per share to now 4300 rupees per share, it's still going

00:11:57 to be a firecracker for the stock to move above the mark of 5000.

00:12:01 That's always going to be a challenge and until that happens, I reckon all the targets

00:12:05 that we've seen of around 7000 are also going to stay distant.

00:12:10 Very quickly, I'm going to mention Hathway, they reported numbers.

00:12:12 So in the same business, numbers were actually disappointing.

00:12:16 They've reported a 22% decline in net profit and they've posted a net profit of 28.77 crores.

00:12:21 We'll get some more details as we go along through the day.

00:12:24 But a few other counters worth mentioning.

00:12:27 I'm not going to start with HDFC Bank because that's pretty much the biggest talking point

00:12:31 this morning.

00:12:32 But a few other names worth the mention is ICICI Securities, stellar set of numbers there.

00:12:37 They've seen a 66% rise in their profitability and that's definitely worth the mention.

00:12:42 Revenues are up about 50 odd percent.

00:12:45 Margins have improved as well by about 400 basis points to come at 68.5 and they've posted

00:12:51 a net profit number of 465 crores.

00:12:54 Let's not forget that the euphoria in the private market means that ICICI Securities,

00:12:59 which is a lead player in the iBanking space has become a big beneficiary.

00:13:02 So you've got ICICI Securities and JM Financial from the listed space that have been gaining

00:13:07 on back of the investment banking space looking very, very active.

00:13:11 The stock is one we want to watch out for.

00:13:12 JM as well went home with a very big run, gained yesterday 6%.

00:13:16 It's been a counter I have personally been watching out for, but ICICI Securities as

00:13:20 well, which gains about 50% of its top line from investment banking deals is a big beneficiary.

00:13:25 The stock went home with a 3% rally.

00:13:28 L&T Tech numbers largely in line, nothing outrageous or outstanding.

00:13:33 Revenue has come in about 1.4% higher.

00:13:35 So just like the rest of the sector, this one's done the same.

00:13:38 What's worth the mention is that in the recent rally of tech companies, L&T Tech has actually

00:13:43 not performed.

00:13:44 So you may not see a big move on the way up on back of numbers being in line with expectations,

00:13:50 maybe a catch up rally, but I can very confidently say that may not happen today, given the larger

00:13:56 broader sentiment that we're seeing in the markets.

00:13:58 But yeah, it's definitely worth the mention.

00:14:01 Yeah.

00:14:02 And just because we're talking about numbers that came in post close yesterday of markets,

00:14:06 I'd mention ICICI Lombard.

00:14:09 They've missed the Bloomberg estimate on the top line.

00:14:12 But overall, if you look into the details, it's not a bad Q3 at all.

00:14:16 Their net profit is up 22.4% year on year.

00:14:20 Net premium income is up about 13.5%.

00:14:23 But I would look at the combined ratio, which has improved at 103.6%.

00:14:28 This is an important figure for insurance companies.

00:14:31 It's all your expenses and losses versus the dividend you bring in.

00:14:35 And that is on track for improvement.

00:14:37 Their auto insurance business has also been firing.

00:14:40 Their profits there have gone up significantly.

00:14:44 Newsflow Adani Energy Solutions, they've put out a business update for Q3 and their pipeline

00:14:50 of smart meters looks promising, 2.1 crores, 14% jump in sales and a TCV of about 25,000

00:15:00 plus crores.

00:15:01 In fact, their renewable power to Mumbai Circle is at 35%, so on track for their target, which

00:15:08 is 60% by FY27.

00:15:10 Areda, talking about Areda and Rail Vikas, because these stocks have already run up in

00:15:16 an otherwise tepid market.

00:15:17 And Areda had some news flow coming in where they've joined hands with IOB for lending

00:15:23 on renewable energy projects.

00:15:26 Rail Vikas Nigam has signed a JV with Jackson Green for solar projects outside of India.

00:15:32 And the company has incorporated a new subsidiary to do this called RVNL Infra in South Africa.

00:15:39 So these are some of the big counters.

00:15:41 But like Samin was saying, the focus today on HDFC Bank, that's the big one.

00:15:45 And Vishwanath Nair is joining us.

00:15:47 He's been on top of the story since yesterday, the corn call, etc.

00:15:51 Let's break it down, Vishy.

00:15:53 What's worrying you about the numbers?

00:15:55 Just before that, Vishy, I want to go back to the conversation you and me had.

00:15:58 The fact that they were reporting numbers after market closing was already worrisome.

00:16:02 And we joked about it, but it's literally how it's played out.

00:16:05 We'll wait and see what the morning trade looks like.

00:16:09 But then as far as Damana's question of what's worrying about HDFC Bank, there's obviously

00:16:16 an operational question.

00:16:18 They're looking good on the profitability front primarily because there's been a tax

00:16:22 write back during the third quarter.

00:16:25 If you remove the tax write back benefit, then the profit would have actually looked

00:16:30 either flat or slightly negative on a quarter on quarter basis.

00:16:33 If you were to look at, let's say, on the asset quality front, they're doing fabulously

00:16:37 well, but that's HDFC Bank for you.

00:16:39 The gold standard as far as asset quality is concerned.

00:16:42 What is worrying is the core business or the core income of the bank, which is the net

00:16:46 interest income.

00:16:47 There, despite a dismal sort of deposit growth on a quarter on quarter basis, less than 2%,

00:16:54 your advances have grown about 4.9%.

00:16:56 You're still seeing NIM remain flat at 3.4%.

00:17:00 You're still seeing NII growth at about 4% quarter on quarter as opposed to the market

00:17:05 expectation of close to 8%.

00:17:07 These things are definitely worrying, not just me, but also the street and analysts

00:17:12 who spoke last evening with the management over the conference call.

00:17:16 These questions kept coming up.

00:17:17 Your loan to deposit ratio is at over 100%.

00:17:21 Your LCR is already at about 110%.

00:17:23 It's not like there's a lot of free cash floating around with the bank to continue lending very

00:17:27 fast.

00:17:28 Plus, of course, the LDR being high has raised some alarms at the RBI.

00:17:32 That's what news reports are saying.

00:17:34 The Reserve Bank of India is advising banks to sort of bring that under control.

00:17:38 For HDFC Bank, it's at over 100%.

00:17:40 That basically means that the loans are far outpacing the deposits, which is a worrying

00:17:44 sign.

00:17:45 So they need to slow down on the loan front.

00:17:48 Then they need to push up the deposit front.

00:17:50 But the direct outcome is that if you push up deposit front, then your NIM starts to

00:17:55 get affected.

00:17:56 If I can just come in on the earnings, Salvashree, a 30% sequential jump in provisioning too,

00:18:02 is that a concern?

00:18:03 So what the bank pointed out is about 1200 crore, roughly, worth of provisions that the

00:18:09 bank has made has been owing to the AIF rules that the RBI came out with last month.

00:18:14 The RBI said that if an AIF has direct lending to any of the borrower companies of the bank,

00:18:19 the bank needs to take their investment out of the AIF.

00:18:21 So that's what they are providing for.

00:18:23 This is a contingent provision.

00:18:24 So it's not like it's a recorded NPA or a recorded problem asset.

00:18:28 But in case of future liabilities, they're setting aside some amount.

00:18:30 But there could be a right back if nothing happens.

00:18:33 Also, very quickly, post the merger, I think the biggest talking point was expansion.

00:18:38 And I think the story of HDFC, the next leg is largely going to be about expanding.

00:18:43 And I think that's a little bit of a disappointment, which again ties back into the fact that deposits

00:18:47 haven't grown because they probably not reached locations or places where they'd have liked

00:18:51 to.

00:18:52 So when the management had announced the merger at that point in time, HDFC Bank had

00:18:57 clearly set 1500 branches a year.

00:18:59 Now, that is the run rate that they would like to run at.

00:19:03 And they did that in 2023.

00:19:05 But as soon as the next financial year started, FY24 started, that number has petered off.

00:19:12 In the current financial year, they're looking at about 800,000 branches.

00:19:15 So that's a problem area for the bank.

00:19:18 In case they are not able to open as many branches, then of course, deposit accretion

00:19:22 becomes a problem.

00:19:23 Already, there's a tough spot on the deposit front, because private banks overall are struggling.

00:19:30 So that's an important point.

00:19:31 It's not just HDFC Bank.

00:19:32 This is a private bank sector problem.

00:19:35 That deposit accretion is slower, especially in a situation where the competition is on

00:19:41 rates right now.

00:19:42 Everybody's pushing up rates.

00:19:43 So then if everybody's pushing up rates, then the question is trust.

00:19:47 And clearly, people are trusting public sector banks more than private sector banks to put

00:19:51 in fresh deposits.

00:19:52 And also pushing up rates and rate competition is one thing.

00:19:54 I think we've reached a stage where it's a product competition.

00:19:57 Yes.

00:19:58 I mean, a lot of talk about financialization of household savings is what has been the

00:20:02 reason why capital markets are doing so well.

00:20:04 So I guess it is those fixed deposits that are finding the way into another asset, not

00:20:07 another asset class.

00:20:08 Actually, yeah, another asset class.

00:20:10 So the move from debt to equity could be one more reason.

00:20:13 And very quickly, Vishy, before we go on to our guests, looking ahead, did we take heart

00:20:18 from anything that the management has said?

00:20:19 So beyond this quarter, if we do get a gap down, it's all going to be about the next

00:20:23 quarter earnings.

00:20:24 Yes.

00:20:25 So the management has pointed out is that we are going to reach that 42% CASA ratio

00:20:29 eventually.

00:20:30 Now, if HDFC Bank reaches that 42%, then that's a good thing, because CASA ratio at the end

00:20:36 of the day is a low-cost deposit source.

00:20:40 What the bank also pointed out is that they are working on HDB financials listing, which

00:20:44 is a substitute that has been long pending listing for HDFC Bank.

00:20:47 So if that happens, then of course, there's some value in locking there for HDFC Bank.

00:20:51 These two are the positives that we would look out for.

00:20:55 And of course, asset quality front, that has been the positive news for a while now.

00:20:58 Yeah.

00:20:59 The important point that Vishy talked about is that this is not necessarily just an HDFC

00:21:03 Bank story.

00:21:04 I think the provisioning aspect of it is something that other banks may also see, as is the cost

00:21:09 of deposits.

00:21:10 But Rahul Malani, a banking analyst at Shere Khan is joining us now for more.

00:21:14 Rahul, a very good morning.

00:21:16 Now, a slew of brokerage reports out this morning as well.

00:21:19 And I would say no clear consensus on how disappointing or not HDFC Bank numbers are.

00:21:28 Motilal Oswal, for example, is still on a buy.

00:21:31 On the other hand, Bernstein is pretty negative.

00:21:34 Where would you stand, Rahul?

00:21:35 How are you looking at the numbers?

00:21:37 See, basically, our view is that it lacks a near-term re-rating trigger in the near-term.

00:21:44 Names progressions will be a focus area in near-term, despite we believe that names have

00:21:48 bottomed out.

00:21:49 But the upward trajectory has to be monitored.

00:21:53 Apart from that, liability side transition is also important because the CD ratio is

00:21:58 continuously hovering at around 110% elevated compared to the industry.

00:22:03 And at the same time, deposit growth continues to remain challenging.

00:22:07 So our view is that the bank would either have to slow down the loan growth in the near-term

00:22:13 to navigate this liability side transition.

00:22:16 So that is the thus forming view that it lacks near-term trigger for re-rating.

00:22:23 Rahul, this is Vishwanath Nair from Any2Profit.

00:22:27 The question that I wanted to ask you is with regard to what the bank commented on the deposit

00:22:32 growth front.

00:22:33 Where there is a clear constraint, not just for HDFC bank, but also for private sector

00:22:37 banks in general.

00:22:38 How do you see the deposit trajectory looking like from here on?

00:22:42 And of course, that would also have an impact on the names because you would end up having

00:22:46 to take on higher cost deposits if CASA doesn't grow fast.

00:22:51 If you look at the last two years, there is not even a single bank, only HDFC bank is

00:22:56 there who has been continuously accruing deposit and incremental market share is hovering

00:23:00 at around 15 to 17%.

00:23:03 So we believe that it is going to maintain its incremental deposit share.

00:23:08 But however, in order to maintain that 17-18% deposit growth, deposit growth should outpace

00:23:14 the loan growth so that the C/D ratio normalizes at the industry level around gradually.

00:23:22 So that is why we are impending a view that there would be a slowdown in the loan growth,

00:23:28 the deposit growth would continue to remain challenging, but HDFC bank would garner deposits

00:23:36 at a higher rate compared to the peers because of the strong distribution network and its

00:23:42 core focus on acquiring the liability-fair relationship.

00:23:46 On the LDR front now, is the outlook that the bank will have to probably slow down its

00:23:52 loan growth because at 110% they are at the top of the LDR bracket?

00:23:57 Correct.

00:23:58 So you would expect some deterioration in the advances growth portfolio?

00:24:03 Sir, yes, that is how it can normalize on because 20 to 25% deposit growth is not possible

00:24:10 in this environment.

00:24:14 And obviously, considering that the bank's loan book now consists of a large housing

00:24:20 pool and mortgage pool and that is where most of the growth is coming from for the rest

00:24:24 of the banking system, at this environment can the bank actually slow down because even

00:24:29 on the corporate front, they are doing fairly okay.

00:24:33 Yes, definitely.

00:24:36 We believe that there will be a slowdown in terms of non-PSL, non-PSL compliant loans.

00:24:43 Other than that, PSL compliant loans, there will not be any slowdown.

00:24:48 However, they can do interbank purchase certificate transactions.

00:24:55 Rahul, you did start this conversation by saying that there could be a re-rating on

00:25:00 HDFC Bank and I have also noticed that Macquarie has a buy call on the stock because they believe

00:25:04 that the increase in retail and SME loans as compared to corporate loans probably could

00:25:09 be a potential driver.

00:25:11 When you say re-rating, what are you expecting?

00:25:13 Sorry, I just want to correct here.

00:25:16 I told that in near term, we believe that there is a lack of re-rating triggers in the

00:25:20 HDFC Bank.

00:25:21 So, what is the stock call then on this?

00:25:23 Would you do nothing with it?

00:25:24 Would you, if you do see a gap down on the counter, would it be a buy call for you or

00:25:29 you would be keeping your hands off this one?

00:25:31 So, basically we believe that in next 12 months, the stock is likely to consolidate.

00:25:38 We should see an in-depth progression in the next 6 to 12 months as well as once liabilities

00:25:45 transition is on track, there will be a re-rating trigger in the stock.

00:25:52 Rahul, the ADR is down quite sharply.

00:25:56 GIF Nifty is indicating to a 200-point cut and I know this is more macro in nature.

00:26:01 And of course, over 50% of the shareholding pattern of HDFC Bank is FIs.

00:26:06 NAFI have that and they are not people who come and dump a counter.

00:26:10 So, movement is going to be limited.

00:26:12 But if I have to ask you, do you think a cut of 3% to 4% is expected on HDFC Bank from

00:26:17 the word go this morning?

00:26:19 Yes, definitely we can expect because the core operating performance has mis-estimates

00:26:24 around, considering estimates.

00:26:27 And despite the thing that in terms of names would not have been stable because we were

00:26:33 working with an improvement of 5 to 10 basis points due to the release of the excess liquidity

00:26:38 as the regulation on ICRR has been withdrawn.

00:26:42 Plus apart from that, loan growth was around sequentially 5% versus the deposit growth

00:26:47 of 2%.

00:26:48 So, we would have expected a much more better core operating performance.

00:26:55 Rahul, hi.

00:26:57 I just want to understand, what would you do with HDFC today?

00:27:03 And do you see this as a concern that we might see across the private banking space?

00:27:08 We've been talking about this, that a lot of concerns that HDFC is seeing in terms of

00:27:13 deposit growth, cost of deposit, provisioning for AIF, etc. is something that other large

00:27:18 banks will also face, especially private banks.

00:27:21 Yes, right now we are in a wait and watch mode for HDFC Bank because we believe that,

00:27:31 as I alluded, we believe that re-rating triggers are not there in the stock versus the peers

00:27:36 who would report higher ROIs and higher growth versus the HDFC Bank.

00:27:42 The phenomena which you alluded pertaining to provisions to be taken on investments in

00:27:47 AIF would be a common phenomena across the sector.

00:27:52 Rahul, one question from my side and then we'll let you go.

00:27:55 But then the question is, would the bank require any kind of an equity raise in the near term

00:28:00 or the medium term that you're looking at for HDFC Bank?

00:28:05 We believe that here the CT1 ratio continues to remain healthy.

00:28:10 So at this juncture we do not envisage any equity capital raise here.

00:28:17 See Rahul, now that we have you on the call and I know this is an HDFC Bank conversation,

00:28:23 but we saw numbers from ICICI Securities, they were fantastic.

00:28:26 We know there's a merger and a swap ratio that's been announced with ICICI Bank.

00:28:30 Do you think the positive reporting from ICICI Securities could be a leg up for ICICI Bank

00:28:37 and potentially a re-rating?

00:28:39 I would not be able to comment due to compliance issues on this.

00:28:43 On ICICI Bank.

00:28:44 Okay.

00:28:45 Thank you, Rahul.

00:28:46 Great having you on the show.

00:28:47 That's of course the view guys on HDFC Bank.

00:28:49 It's not looking all bright, but we can't help it.

00:28:52 We've not done this from the start of the show, but GIF Nifty is indicating to a 200

00:28:55 point cut.

00:28:56 Now that is the kind of pressure we're looking at.

00:28:58 It is going to be, it's looking like a very, very tough day of trade.

00:29:02 21,830 Nagam's got a pretty bad re-I.

00:29:06 You want to come in this one because I think we missed this at the top of the show.

00:29:08 Look, this just means that a lot of your long positions are going to be unwound and that's

00:29:14 going to lead to further selling pressure.

00:29:16 And that obviously means the Nifty is clearly going to lose out on 22,000.

00:29:19 And 21,878 I believe is a key level to watch out for.

00:29:23 So watch out for that one.

00:29:24 You've also got 21,622, which is a 20-day moving average.

00:29:28 Now if 21,878 gets taken out in early trade, we may be headed all the way down to 21,622.

00:29:35 On the upside, still worth the mention, 21,224 becomes important.

00:29:39 If that gets taken out, you will see an upward move.

00:29:42 But disappointing numbers from HDFC, Wipro getting trashed on the US exchanges.

00:29:47 Global Qs like Tamna indicated are weak.

00:29:50 And more importantly, GIF Nifty is also 200 points low.

00:29:53 So it's looking like it's going to be a rough start.

00:29:55 For the lack of a better metaphor, it's the hawks and the vultures which are going to

00:29:59 come and feast on the body.

00:30:00 It's going to be a problem as far as markets are concerned.

00:30:03 I'm not saying it's going to be a…

00:30:04 Tell me that hawks and vultures are going to come and feast.

00:30:06 Not bulls are this morning.

00:30:07 Bulls are on a diet.

00:30:11 Only for the lack of a better metaphor at the moment.

00:30:13 Okay.

00:30:14 Yeah.

00:30:15 Okay.

00:30:16 It's looking tough.

00:30:17 But you know, before we wrap up this segment and we've spoken about HDFC, we did hear

00:30:20 from the management yesterday.

00:30:21 And I want you to set it up, Vishy, before we play out some of those comments.

00:30:25 Right.

00:30:26 To get a sense of what they are saying about their numbers as well.

00:30:29 So last evening during the analyst call, the CFO Srinivasan Vaidyanathan had some points

00:30:35 to make about what is actually constraining deposit growth for the broader banking sector

00:30:40 as well as for HDFC Bank.

00:30:42 Because currently borrowings are increasing on the HDFC Bank balance sheet, which is of

00:30:47 course adding to the cost for the lender.

00:30:49 We'll just listen to what Srinivasan Vaidyanathan had to say about this.

00:30:54 The biggest constraint is in the area of deposits.

00:30:59 And if you look at what has happened in the system, it's very important to look at the

00:31:04 liquidity in the system, how it has moved.

00:31:08 If you see, it has been positive ever since Q1 20.

00:31:14 The system liquidity has been positive since Q1 20.

00:31:18 And now it has moved to a negative territory.

00:31:21 It is a lack of liquidity in the system.

00:31:24 Thankfully, if you look at how RBI has managed, there is no rate change that has happened.

00:31:31 But the inflation that spiked four months ago, five months ago, has been managed through

00:31:36 liquidity constraints, through working on the liquidity side.

00:31:41 That is what has happened on a temporary basis.

00:31:45 But over the quarter to quarter, this is happening.

00:31:48 But it is coming after more than three and a half years.

00:31:51 We are seeing this liquidity on the negative.

00:31:53 It has been there.

00:31:54 If you look at the last 10 years, there have been several quarters in the past in '13

00:32:00 or in '15, 2013, 2015, where it has been negative.

00:32:05 But this order of magnitude negative is very recent.

00:32:09 In the last three months, it has become negative.

00:32:11 So that deposit is an important ingredient that is an important constraint to grow.

00:32:17 And we are at it.

00:32:18 And within that, I will tell you, retail has done reasonably.

00:32:22 We would have liked retail to do 50% more, 80% more than where we did.

00:32:28 But it is the wholesale, if you see, not just lack of growth, it's a degrowth in the non-retail

00:32:34 on the deposit side.

00:32:36 That was the CFO of HDFC Bank saying that the focus is now going to turn to retail deposits

00:32:46 as well.

00:32:47 We'll take a very short break.

00:32:48 But on the other side, you're looking like you have a tough opening in the markets.

00:32:53 Agam is going to join us to set it up on what you should and can do on F&O.

00:32:58 Stay with us.

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00:35:36 Welcome back.

00:35:37 We are taking stock of the futures and options space and what looks like a challenging open,

00:35:43 at least on account of HDFC's earnings.

00:35:46 But I'm going to start off with the benchmark indices.

00:35:48 And it becomes evident that at the moment and yesterday, specifically in the last one

00:35:53 hour trade, a lot of traders decided to square off their positions, indicated by the fact

00:35:59 that, well, your nifty spot has come off by about quarter percent.

00:36:03 And we saw a decline of around one and a half percent in terms of its open interest.

00:36:08 The picture wasn't very different when it comes to the Bank Nifty futures either.

00:36:12 So the Bank Nifty underlying did come off marginally.

00:36:16 But you did see a decline of about a half percent in open interest there as well.

00:36:20 I reckon, should we expect the largest bank, HDFC, to come up with some weakness, at least

00:36:27 in early morning trade, we're going to start seeing some amount of selling pressure coming through.

00:36:32 That said, let's take a look at how things are panning out as far as the nifty options

00:36:36 market is concerned.

00:36:37 Remember, yesterday we did see a lot of writing around the calls, considering the nifty largely

00:36:43 hung around where it didn't eventually came off.

00:36:46 But we're seeing a little more writing around 22,000, 22,100 and 22,000, 3,000, well, puts,

00:36:52 pardon me, calls.

00:36:53 That's where we're seeing a little more writing coming across on the expectation that nifty

00:36:57 could perhaps, well, move further down.

00:37:00 In terms of the open interest distribution, we still have a 500-point range, or based

00:37:07 on maximum open interest, between the 22,000 put, which has max OI, and the 22,500 call.

00:37:15 I reckon there could just be a little more unwinding as far as the 22,000 call is concerned,

00:37:21 should we see a little bit more weakness in open trade today.

00:37:24 Let's talk about the bank nifty then.

00:37:26 And naturally, we're going to see a considerable amount of writing should we see a little more

00:37:31 weakness.

00:37:32 And even 49,000 will be out of the picture, at least for the moment, considering today

00:37:37 is the weekly options expiry.

00:37:39 So we'll be keeping an eye on that one as well.

00:37:41 Let's very quickly go through all the stocks which were buzzing in trade yesterday on account

00:37:45 of increase in open interest.

00:37:46 So we saw longs building up in Nalco, BPCL and Page Industries.

00:37:51 BPCL is an interesting one, because we did see about a 2.7% rise there as well, with

00:37:56 a good 10% increase in open interest.

00:37:58 And of course, L&T Technologies is something which will react to earnings, which came through

00:38:03 yesterday.

00:38:04 So shorts building up there ahead of its earnings.

00:38:06 And we saw about a short covering for Balcon, Chumble Fertilizers and RBL Bank.

00:38:10 On the other hand, Apollo Tires and CoForge seeing a bout of longs and winding.

00:38:15 Now, this is as far as markets and where they stand.

00:38:19 The question really is, what do you do with these markets?

00:38:22 What do you do with the bank nifty?

00:38:23 What do you do with the nifty?

00:38:24 Well, let's get in an expert voice.

00:38:27 We have Shilpa Raut of Pravdas Niladhar, who is joining us on the show.

00:38:30 Shilpa, good morning and thanks for joining in.

00:38:32 Your assessment of the benchmarks, what's happened in the last hour of trade yesterday

00:38:36 and how we could potentially expect things to unwind going forward?

00:38:41 Good morning, everyone.

00:38:43 Talking about the setup for the day, we see that FIS data is still long at 65%.

00:38:49 So they haven't shown any sort of panic yet.

00:38:52 So I believe that even this gap down, what we might see today of 200 points for nifty

00:38:58 or likely bank nifty around 400 to 500 points, I believe that this can be bought into

00:39:04 because the support at 47,500 for bank nifty and nifty at 21,700 is quite robust.

00:39:13 So this declines to 21,800 for nifty should be bought into with a tight stop loss of 21,700.

00:39:19 Likewise, bank nifty declines to 47,500 can be bought into with a stop loss at 47,300 on immediate basis.

00:39:28 If we sustain these levels, then we might see a good run up towards 48,000, 48,100

00:39:34 and nifty towards 22,000 zones again.

00:39:38 Okay, so that's you on the benchmarks.

00:39:41 But I believe you have a trading idea in Tata Steel as well as BPCL.

00:39:46 Soni, pardon me, we'll start with just Tata Steel at the moment.

00:39:51 Can you take us through your view on this one?

00:39:55 Yesterday we saw the last of the trade, the metal, enter the metal pack.

00:40:00 They were showing a lot of strength, good momentum in those sectors.

00:40:04 So out of that, I believe Tata Steel is also very well placed.

00:40:07 It has a good support at 135 zones.

00:40:09 So 135, 134 levels are the right zones where one can again enter long in this gap down.

00:40:16 So I believe one can practice a bull call spread here.

00:40:20 As of yesterday's closing, Tata Steel 135 call was closing at around 3.5 to 4 rupees around.

00:40:27 So this is where you should buy again.

00:40:29 And you can sell also Tata Steel 140 call option at around 2 rupees.

00:40:33 So the net outflow for your strategy would be around 1 rupee and 50 paise.

00:40:39 And the profit potential for the strategy is 3.5 rupees.

00:40:45 So the risk reward is very favourable.

00:40:47 So Shilpa does suggest a debit spread as far as Tata Steel is concerned.

00:40:50 And as you can see on your screen here, max profit at around 3.5 rupees against 1.5 rupees max loss.

00:40:57 And naturally, the idea here is for Tata Steel to move higher.

00:41:03 But Shilpa, moving on, you also have a view on BPCL.

00:41:06 Can you take us through that one?

00:41:08 The OMC SPAC in the past few days, they have been outperforming.

00:41:13 And BPCL is one counter in that entire sector that is showing a lot of strength.

00:41:19 So the declines towards 365, I believe there's a good support.

00:41:23 So I believe today this gap down opening, we might see BPCL falling towards 365 zone.

00:41:30 So this is where it should go long.

00:41:32 So as of yesterday's closing, the 480 call option closed at around 7, 7.5 rupees.

00:41:38 So if today the declines happens and you get 480 call in between 5 rupees to 7 rupees,

00:41:43 one should go long here with a stop loss of 3 rupees.

00:41:47 And I believe it can do 11 to 14 rupees as targets.

00:41:50 Okay, so a playing buy on that dip as far as BPCL is concerned.

00:41:54 Shilpa, thank you so much for joining us and taking us through your views in the markets

00:41:58 as well as giving us a handful of trading ideas.

00:42:01 We'll continue to keep an eye on that one.

00:42:03 With that, Samina, it's over to you.

00:42:05 Very quickly, Agam, before we move on, interglobal aviation,

00:42:08 I don't know if you looked at it yesterday, hit a 52-week high.

00:42:11 Usually an active stock if it moves one way or the other.

00:42:14 But do you have anything on that 20% move on interglobal aviation?

00:42:18 Let's take a look at it. If we can in fact pull up interglobal aviation

00:42:22 and at least in terms of futures and options snapshot.

00:42:25 It's surprising that despite all the negative news and, you know,

00:42:30 the very strong social media reaction around the challenges that the airline has faced,

00:42:34 it was still at a life high yesterday.

00:42:37 That said, we did see some bets being taken off the table

00:42:41 because we did see unwinding to the tune of nearly 6%, you know, in interglobal aviation.

00:42:46 And it eventually closed with losses, declines in yesterday's year of trade.

00:42:53 Still holding on to the mark of around Rs. 3,000 per share.

00:42:56 Well, it's going to be a wait and watch on that one.

00:42:59 Clearly, we are seeing several other factors fundamentally playing in favour of

00:43:04 not just interglobal aviation but the entire aviation space as a whole.

00:43:08 And as you can see, it's had a tremendous run over the course of the last 12 months as well.

00:43:12 But given the kind of unwinding that we have seen over the course of the last couple of days,

00:43:17 would perhaps, you know, suggest that we could see consolidation as far as interglobal aviation is concerned.

00:43:23 Indeed. I'm not sure why that was showing up as a negative close

00:43:26 because on the PSA it has gone home with about 20% gains.

00:43:30 But we'll fix that for you in a minute.

00:43:32 Will be one to watch out for consolidation, like Agam said, could be in the offing on that stock.

00:43:37 Well, let's quickly move on to the other important news points.

00:43:41 But a quick check on GIFT Nifty before we do that.

00:43:43 Implied start is expected to be a 200 point cut from the get go this morning.

00:43:48 Heavyweights like HDFC, Wipro, Asian Paints will be in focus.

00:43:52 It's all about earnings. A start closer to 21,800 is what we are expecting.

00:43:57 But let's shift focus to the World Economic Forum at Davos.

00:44:00 My colleague Neeraj spoke to ABB Chairman Peter Wozner

00:44:04 on the slowdown in the globalisation and business momentum for 2024 and the next few years.

00:44:10 Here's a slice of that conversation.

00:44:12 During 2023, we all experienced that we did forecast a slowdown,

00:44:19 but it actually never happened in a big way.

00:44:22 So we have learned out of that.

00:44:24 I think we are carefully still optimistic for 2024.

00:44:28 I think we are looking at two different halves.

00:44:31 I think the first half will be more challenged than the second.

00:44:35 And I think you need to take a regional lens as well.

00:44:38 I think the US, India, Asia except China,

00:44:44 I think will actually just grow in the normal way, which means strong growth.

00:44:50 Europe is lagging, has structural issues, has also had to deal with the pandemic,

00:44:58 the wars, high energy prices, cost inflation on wages, etc.

00:45:02 So we'll be slower.

00:45:04 China, I would also say they will most probably recover towards the second half of the year

00:45:09 because they have some consumer consumption issues which they need to sort out.

00:45:14 So I think personally I'm a half glass full person anyway,

00:45:18 and I don't see any other thing for 2024 than that.

00:45:22 And the glass getting filled will probably happen in the second half of the calendar.

00:45:27 Yes, I would say so, yes.

00:45:29 It's more because you see during 2023 we experienced that what we call the short cycle products and orders,

00:45:38 they were starting to slow down.

00:45:40 At the same time, the late cycle big project business started to come in.

00:45:45 So the order books and the revenue books were still actually quite well developed.

00:45:50 But I think in the first half of next year you will see the larger projects slowing down,

00:45:55 and most probably the short cycle business will come up a little bit later in the year,

00:46:02 towards the end of second quarter, but normally third and fourth quarter.

00:46:07 Okay.

00:46:08 It's also a year wherein, or maybe not just the year, but maybe many years,

00:46:14 of higher than the past 15 years of interest rates being there.

00:46:20 So higher for longer.

00:46:22 But in a calendar year where we'll see interest rates possibly come lower.

00:46:26 How do you think the world adjusts to, or how do you think corporates like yourself adjust to higher rates,

00:46:33 different IRRs, projects, different multiples as well,

00:46:37 discounting for various assets including equity or acquisitions?

00:46:41 Tell us a bit about that.

00:46:43 I think over the last four years ABB has transformed,

00:46:48 and we have actually performed very well, including our India business,

00:46:53 and we achieved our financial targets a year earlier than expected.

00:46:57 That means we go into this interesting period, '24, '25,

00:47:02 with a strong balance sheet, a well-performing business,

00:47:07 and that gives us the opportunities.

00:47:09 So I think we are facing clearly a business environment

00:47:14 where generations have never lived through high interest rates,

00:47:17 have never lived through inflation,

00:47:19 and I think therefore companies need to prepare themselves.

00:47:23 These are different risks which we now have to manage.

00:47:26 We have to educate the middle management,

00:47:29 who for the first time have to deal with these issues.

00:47:32 Now, on the other side, there's a huge opportunity.

00:47:35 Given the strengths we have in the company,

00:47:37 we hopefully can take advantage of lower multiples,

00:47:41 because lower multiples means you can also do acquisitions,

00:47:44 strengthen your businesses, your divisions which we have,

00:47:47 and we will be watching for that.

00:47:50 It may take a few months more before the multiples literally come down.

00:47:54 Now, in terms of interest rates,

00:47:57 that's where I'm most probably a little bit more conservative.

00:48:00 I don't see that many interest rate changes in '24.

00:48:04 I think even the US most probably will be very careful,

00:48:09 given that the US economy is still growing,

00:48:12 so that the inflation is not yet at the level where it should be.

00:48:17 So therefore, I think it's also towards the latter part of the year

00:48:22 where we will see that.

00:48:23 I don't think Europe will actually see interest rate reductions in 2024.

00:48:30 That's '25.

00:48:31 Well, that's ABB talking about the road ahead, investments,

00:48:35 and what the next couple of years are going to look like.

00:48:37 Well, let's move the focus back to the markets.

00:48:39 Nirav Asher, Head Equity Research, NSL Latin, Manoharlal Security joins in.

00:48:44 Hi, Nirav. Good morning. Thanks for joining in.

00:48:46 Nirav, it's looking like it's going to be a very rough start.

00:48:49 We very beautifully took out 22,000 a few days ago,

00:48:53 but a 200-point cut after a deal of consolidation yesterday.

00:48:57 A quick word on the Nifty?

00:49:00 Yeah, good morning and thank you for having me on your show.

00:49:05 Yes, we expect a perfect storm for the markets today.

00:49:09 And I think as far as the IT sector is concerned,

00:49:15 we've seen kind of a dream relief rally in the IT sector stocks,

00:49:22 the frontline IT stocks.

00:49:24 And yesterday we had a very rough reaction to the numbers of HDFC Bank

00:49:31 as far as the ADR is concerned.

00:49:33 And as far as the global markets are concerned,

00:49:36 there's been a mismatch of expectations.

00:49:38 I think the Federal Reserve Governor's speech,

00:49:41 which has indicated that the rate cut is going to happen in a very,

00:49:45 very calibrated manner, has disappointed the global markets.

00:49:49 So I think a combination of all these factors leading to the 10-year benchmark

00:49:54 bond yield going above 4%,

00:49:56 all these things are likely to put pressure on IT sector stocks

00:50:01 as well as the banking sector stocks.

00:50:04 So we expect a bad start to the markets today.

00:50:08 But I think there are sectors where there is a hope, there is a potential.

00:50:15 I think infrastructure is a space to look out for.

00:50:18 Reliance Industries, of course, is again a stock to look out for.

00:50:22 So I think there could be some pockets of hope in the market too.

00:50:28 No, it's interesting.

00:50:30 In fact, talking about the US 10-year went up to 4.07.

00:50:34 So there was a 13 basis point movement that we saw on the 10-year in overnight trade.

00:50:39 Chandan Tapare as well, Head Technical and Derivatives of Motilal Financial Services joins in.

00:50:46 Chandan, it's going to be a very obvious gap down, closer to levels of 21,800.

00:50:52 Now, if we stay around those levels for the first few hours of trade,

00:50:56 would you initiate a strategy on the Nifty?

00:50:59 Because from a more medium-term perspective, the Nifty remains a buy-on-dip strategy, right?

00:51:04 So intraday maybe for the next few days, how would you trade the Nifty?

00:51:08 Yeah, good morning. Thanks for having me.

00:51:10 So we were having a good move in the last four or five trading sessions.

00:51:14 But now, due to the weakness in the global market and a few corporate results,

00:51:18 the indices are slightly down.

00:51:20 Yes, major trend is intact.

00:51:22 A short-term or intraday trend might change because of today's profit-booking decline.

00:51:26 And overall, we believe any decline towards 21,850 could be utilized as a buying opportunity.

00:51:31 In that scenario, we will have major support at 21,700 zone.

00:51:36 And with that support, again, indexes potential to rally towards 22,222 zone.

00:51:41 So let the market get stability near 21,850.

00:51:44 And I think that can be utilized as a buying decline opportunity because overall,

00:51:48 medium-term and long-term outlook of the Indian market remain bullish as per the technical and the derivatives data set.

00:51:54 But if you don't, the markets are not able to hold that level of 21,850, then what happens?

00:52:00 I mean, then what is the strategy? Would that change?

00:52:02 Yeah, so if it fails to hold 21,850, then we need to go one step back.

00:52:09 In that scenario, it can drift to the next support of 21,550.

00:52:12 But trust me, the VIX is not at much higher level.

00:52:15 Put-call-raise is holding.

00:52:17 Global market witness some profit booking, but major trends remain in day.

00:52:20 So I'm not expecting any major decline as of now.

00:52:23 But yes, if it holds below 21,850, then don't build intraday long positions.

00:52:27 Can go with some protective put and then further decline could be there to us next support of 21,550.

00:52:32 So need to worry only for one, two, three days, but overall outlook remain in tech to positive.

00:52:37 So you need to apply the strategy with the hold or break of 21,850 zone or the next one, two, three trading session in the market set.

00:52:45 Nirav, I mean, HDFC Bank, clearly no re-rating on the stock anytime soon.

00:52:51 Numbers, I mean, the street is disappointed and this is a bank that runs with such high expectations.

00:52:58 Historically, it was always one of the 30% bank.

00:53:01 This time around, it seems like the higher provisioning, NIMS not being able to do,

00:53:06 gain deposits not being able to see, big pickup is all working against the count.

00:53:11 And we saw the ADR as well declined quite sharply.

00:53:14 Now I'm mindful that FI's own over 50% of the banks.

00:53:18 We may not see a very big fall on the counter, but what did you feel about HDFC Bank?

00:53:24 Were you disappointed?

00:53:26 Not exactly disappointed with the numbers, but I think the entire industry is facing certain headwinds, certain challenges.

00:53:33 As we have pointed out earlier also that the NIMS, the NIM, the net interest margins have peaked, already peaked for the industry.

00:53:42 So they are on a downward trajectory.

00:53:44 We are seeing the net interest income come under some sort of pressure.

00:53:48 Asset quality largely has been stable for HDFC Bank, so that's not an issue.

00:53:53 But I think deposit mobilization has been slow.

00:53:57 The retail deposits have been growing at a slower rate.

00:54:01 So that is a concern as far as the bank is concerned.

00:54:04 But otherwise, I think one more area which could be a concern for the bank is that the growth in retail advances has been around 111%.

00:54:20 And commercial and rural banking has grown by 31%.

00:54:24 So that also raises some doubts that the asset quality is likely to weaken a bit, at least in the near future.

00:54:32 So all these challenges prevailing for the bank, I think they are short-term challenges.

00:54:37 And I think they are likely to be addressed by the bank in the next couple of quarters.

00:54:42 So it's just a waiting period.

00:54:44 I wouldn't be very disappointed with the results, but use this as an opportunity to start acquiring this stock in smaller quantities.

00:54:52 I agree. This one is Biondips.

00:54:55 It's well-priced, currently not even very highly valued.

00:54:59 Stock has been an underperformer, continues to hold massive weightage on the index and on Bank Nifty as well.

00:55:05 But of course, disappointment in terms of earnings.

00:55:08 Chandan, what is your take on HDFC Bank?

00:55:11 7% cut on the ADR is what we saw.

00:55:14 What are you expecting in terms of opening and would you trade HDFC Bank at all because it is going to be very, very active today?

00:55:21 Yeah, it's likely to be active due to its swings.

00:55:25 As of now, structure was mixed.

00:55:27 We have seen good run-up in the last two months, especially in the month of November and December.

00:55:32 This stock really dwelled from $1460 to $1720.

00:55:35 And after the gap-down opening, I think your $1550 could act as a major support.

00:55:40 In fact, we are witnessing some put writing at lower strike.

00:55:43 So I believe if it corrects by more than 5% to 6% and comes near $1550, then that can be an opportunity to buy the counter.

00:55:52 Because this is one of the strongest setups, if you look at the long-term point of view.

00:55:56 $1550 will be a key level.

00:55:58 I think near to that level, we can again accumulate for a run-up to $1700 to $1750 in the HDFC Bank.

00:56:04 Now, Chandan, very quickly, HDFC Bank, 33% of, sorry, Nifty Bank is HDFC Bank.

00:56:11 A gap-down is clearly on the cards, but what is the trade on Bank Nifty?

00:56:16 Yeah, so like Bank Nifty, HDFC Bank contributes almost 33% weightage in Bank Nifty.

00:56:22 So because of that, your banking index will be down.

00:56:25 $47500, $47250 are key level in Bank Nifty where we need to look at the close watch.

00:56:31 Yeah, some sort of weakness could be there.

00:56:33 Bank Nifty is slightly underperforming even in the weekly or daily chart.

00:56:36 We are witnessing multiple kept upside.

00:56:39 So $47777 to $48500 to $48250 will be the key level where Bank Nifty can decline and find support further.

00:56:46 That's the trade on Bank Nifty and fundamental stock call on HDFC Bank.

00:56:52 So, it will formulate after big dip falls is what Nirav also believes.

00:56:56 But staying with earnings, we have with us – actually, we will take a quick break.

00:57:00 We will come back.

00:57:01 We will talk to Rajesh Sharma, founder of Capri Global Capital,

00:57:05 who joins us to talk about the insurance distribution business that they are falling into.

00:57:09 Remember, the stock went home with gains of 18% and has had quarter-on-quarter strong performance.

00:57:14 [MUSIC]

00:57:34 [MUSIC]

00:58:02 [MUSIC]

00:58:31 [MUSIC]

00:58:49 Welcome back.

00:58:50 GIF Nifty is indicating to a 200-point cut on the index.

00:58:54 HDFC is going to see some selling.

00:58:56 Broader markets may also see some pressure.

00:58:59 All that is going to contribute to a little bit of a painful start for D Street this morning.

00:59:03 But the focus remains earnings led by HDFC Bank, of course.

00:59:07 A few more companies reported earnings post-closing, ICC Security being one of them.

00:59:12 Harsh is joining us with more on that.

00:59:14 Harsh, I know ICC Security numbers may not mean much for the stock itself because it does get merged into ICICI Bank.

00:59:20 But I'm guessing the impact of that could be felt on IBank itself and a whole bunch of other names that we are tracking today.

00:59:26 Well, yes, absolutely, Samina.

00:59:28 So, you know, where ICICI Securities is concerned, it's less relevant from a perspective that the merger ratio is already disclosed.

00:59:36 But a strong set nonetheless. Operational efficiency is starting to kick through.

00:59:40 Let me first, though, focus on Jindal.

00:59:42 So, you know, solid set of numbers overall when I'm looking at Jindal.

00:59:47 So, you've seen revenue go up by roughly 9.5 odd percent on a year-on-year basis.

00:59:52 EBITDA, though, has doubled.

00:59:54 So, clearly, margins have gone through the roof.

00:59:57 We've seen margins go up from roughly that 9.6 percent mark to 17.5 percent.

01:00:02 Very, very strong margin increase that we've seen.

01:00:06 And net profit, therefore, has more than tripled.

01:00:09 We've seen net profit go from 143 crore to 511 crore on a year-on-year basis.

01:00:17 So, that one will definitely be in focus.

01:00:19 Among others, you're seeing a good set of numbers coming in from Gallant, SPAT as well.

01:00:25 The revenue is up just about 5.5 odd percent.

01:00:28 EBITDA jumped 24.5 percent.

01:00:31 Margins went up by around 152 basis points to 10 plus percent.

01:00:36 So, double-digit margins clocked now.

01:00:38 And net profit, seeing that play, net profit has gone up from 21 crore to 52 crore on a year-on-year basis.

01:00:46 Last off, we did, to round it up, we'll just talk briefly about ICICI securities.

01:00:51 We did speak about that as well.

01:00:53 Revenue is up 50.5 odd percent.

01:00:55 You're seeing profit after tax go up by around 67 percent.

01:00:59 Stock has run up substantially over the last few months.

01:01:02 And ICICI Bank, in comparison, hasn't done that.

01:01:06 So, I'm not sure how the stock will respond, but a strong set nonetheless from ICICI securities.

01:01:11 Indeed. Lots and lots of earnings reaction is what we're expecting.

01:01:15 In fact, pre-empting earnings as well could be something that STREIT will do.

01:01:18 Stocks like Asian Pains, LTI Mindtree, Happy Minds and some of the few other counters that would be reporting numbers.

01:01:25 We've got a minute to go, a second to go as we get up for pre-open trade.

01:01:30 We will, of course, just take a quick check of it and move on very quickly.

01:01:34 Highlight for you the market open, one more 50 seconds to go, but it's going to be a down stay.

01:01:40 On the Nifty, you saw HDFC down 7 percent on the ADR.

01:01:43 Vipro as well actually saw a huge cut in overnight trades, seeing a cut of nearly 8 percent.

01:01:48 OMCs might see some activity in terms of stock performance in today's day of trade.

01:01:52 Metals as well had been on the buy side yesterday on expectation of a stimulus package from China.

01:01:58 No announcement yet on that front, but metals may again be in focus today.

01:02:02 ICICI Bank, I'd imagine, should be seeing some sort of interest after ICICI securities reporting.

01:02:09 I remember the swap ratio is already out there, but I'm guessing one part of the fact that this is going to be merged eventually with ICICI securities,

01:02:16 you might see a reaction to that too. Polycap, that's another one to watch out for.

01:02:20 They report numbers tomorrow. The stock is one you want to keep track of,

01:02:23 largely on back of the fact that they've been sort of recovering quite smartly in the last few days

01:02:28 and it's expected to be a stellar quarter for them too.

01:02:30 Well, that's the start. Chandan had indicated that 21,850 is a level that would be respected

01:02:38 and it's not looking as bad as the pre-open was indicating too.

01:02:42 That's the Nifty down about 220 points to 21,820.

01:02:47 So, it's a little all over the place. We'll give it a few minutes till we recheck on the Nifty 50.

01:02:52 So, the Sensex also down 0.6%. Like I said, it's all over the place.

01:02:57 We shouldn't be getting too concerned, but it is going to be a down day.

01:03:00 If I can get HDFC Bank, it will be helpful to see how the stock has opened in trade or will open not bad.

01:03:09 Like we said, 50% of the bank is owned by FRIs. We are expecting a gap down,

01:03:13 but it should not be as bad as what the ADR saw.

01:03:16 Nirav, getting beyond HDFC Bank, any other banking names that you would initiate buy calls on?

01:03:24 Also, we are aware that deposit growth will be largely seen in the PSU basket.

01:03:29 Now, is that a reason for anybody to go out and buy PSU banks,

01:03:34 especially after seeing what we've seen with HDFC Banks reporting on deposit growth

01:03:38 or any private sector banks as well? Anything that you like?

01:03:42 As far as the private sector, other private sector bank which you would like to look at is,

01:03:47 I think ICICI Bank because they have given the leadership to the sector.

01:03:53 And I think our focus would be fair and square on ICICI Bank.

01:03:58 As far as the deposit mobilization is concerned and the contention that the PSU banks have an edge over there,

01:04:06 I think I would be a little bit skeptical. It would be too early to take a call on the PSU bank performance.

01:04:14 One has to look at all the parameters with respect to performance.

01:04:18 So, I would be a bit skeptical about the PSU banks.

01:04:23 Right. That is the word coming to the few of the banks. It's not looking as – I mean 21750 is what we have in pre-open trade.

01:04:32 We'll give it a few minutes to settle like we've said, but it is looking rough from the get-go.

01:04:37 Chandan, as we are gearing up for trade this morning, any trading strategies for our viewers?

01:04:43 So, we need to look at the opening of the market and accordingly trade setup will be there.

01:04:47 But based on the previous day closing, we have selected two stokes which can generate the alpha

01:04:51 and can do the outperformance. First is buy on Titan. This stock is holding well.

01:04:56 Yesterday when market was slightly down, this stock was holding well.

01:04:59 Major trend is positive, continuously making higher tops, higher bottoms.

01:05:02 And this is the seventh or eighth consecutive year where year on year basis we are positive in the counter.

01:05:08 So, Titan is one of the strongest setup, can buy with support of 3740 looking for an up move towards 3980.

01:05:14 Second trade is LIC-I, Life Insurance Corporation, LIC India. So, here setup is positive, strength is clearly visible.

01:05:23 The stock has entered into the new lifetime high territory, major trend is intact.

01:05:27 Volume surge is clearly visible. So, one can buy with support of 868 here. We have target towards 935.

01:05:33 So, Titan and LIC India are two stocks which can generate alpha and holding the strength even after some market volatility.

01:05:40 Absolutely. Chandan, let's talk about Asian Paints. Numbers expected today.

01:05:47 Do you see an opportunity over here and would you look at this space and at consumable spaces right now

01:05:58 considering the kind of pressure that we are seeing this morning. Where would your bet be or would it be all defensive?

01:06:03 Yes, so better to be on defensive and if I talk about Asian Paints, we have seen corrective move in last two weeks.

01:06:11 This stock has already corrected from 3420 to 3250 zone and has been consolidating the range from last 4-5 days.

01:06:19 Expecting is 50-day exponential moving average. So, I think let it correct as slightly market is down.

01:06:25 Near 3220 will be the buying opportunity with support of 3120 kind of level. So, let it correct by further 2-3%

01:06:33 then we can go for accumulation for fresh leg of rally in the counter.

01:06:37 Right. Chandan Nirav, stay with us. That's Asian Paints as well as looking flat this morning.

01:06:44 But in pre-open trade, we are expecting a gap down. One stock that has been a standout in the last few days

01:06:49 and actually in the last few months as well has been Capri Global. It searched sharp gain in yesterday's trade.

01:06:57 This morning as well when the whole sentiment is looking weak in pre-open, the counter is expected to see a gap up.

01:07:03 And the euphoria around this is because Capri Global will be allowed to distribute live genuine health insurance products.

01:07:09 They have got an approval from the agencies. Rajesh Sharma, founder and managing director of Capri Global Capital joins in.

01:07:16 Rajesh, first up, is it Capri Global or Capri Global? Because this is a debate.

01:07:22 It's Capri Global. Okay. So, it's Capri Global. Rajesh, your stocks went on a tear, your numbers have looked fantastic quarter on quarter.

01:07:33 Your new ventures have contributed and have become revenue creative and I am talking about Gold Car which you know

01:07:39 significantly built in the last couple of quarters and years. Now, a foray into insurance.

01:07:44 Talk me through this, what led to it. I know the idea is to cross sell and increase the bookie of offerings

01:07:50 but some more details will always be useful. Yes, thank you. So, I clearly say what we are doing and our growth

01:07:59 which is coming in increase of AUM 50% since last couple of two years and this year also we are aiming to grow in the range of about 40% plus.

01:08:09 I think this is we are part of India's growth history, we are part of India's success and where economy is aiming to become third largest economy.

01:08:17 I think we are going to be part of that journey. So, clearly when we acquired our customer in the MSME, affordable housing,

01:08:26 in the car loan, in the gold loan, we see clearly we have an active base of customer more than 270,000 is our borrower customer.

01:08:36 If you talk about the car loan, we already have built more than 60,000 customer and these are the customer we intend to help them to acquire the insurance.

01:08:45 Today, our insurance penetration is very low age compared to we talk. So, and you know we cater to those segment where customers are

01:08:54 in the low income group customer who are running some sort of business. So, we try to educate them that if they take their life insurance

01:09:02 or for that matter they take the medical insurance, even though once they hospitalize, it helps them to get proper treatment and it doesn't put pressure on their financial health.

01:09:13 So, I think taking the advantage of our customer base and taking the help of the technology including data analytics and how to sell, what to sell,

01:09:22 we intend to grow this business and we are quite confident to grow this substantially.

01:09:28 Rajesh, this is looking very exciting. Now, the counter and pre-open is at 5%. There has also been and this is literally come in this morning.

01:09:36 I am struggling to open the press release, but is there a possibility of any fundraising plans, a bonus or a stock split?

01:09:42 Is that a notification? I can't open it and hence I am asking for the clarification on air.

01:09:47 So, at the moment there is no plan to raise the capital because we recently in the March we came out with the right issue.

01:09:59 Companies well capitalized. We have a capital education ratio is about more than 30% and even though with the growth rate,

01:10:08 with the co-lending partnership in place with the six large PSU and private sector banks, the funding line is quite available.

01:10:17 So, we clearly see that our plan to achieve a yield of 30,000 crore rupees in next four years is very much possible with the help of co-lending and our capital.

01:10:30 And as you may think, I think we will come back. At the moment, we are quite well capitalized.

01:10:35 Are you looking at any debt raise or that's also not happening?

01:10:41 No, debt raise is a continuous exercise. For NBFC, this is the raw material.

01:10:47 So, I think every month we keep getting the new lines and new borrowing programs. So, I think there is an ongoing exercise.

01:10:53 Also, one more quick question that I want to sort of try and understand from you.

01:10:58 So, you are also confirming there is no bonus or stock split that the company has announced, right?

01:11:03 No, I think today some notice has been given to the stock exchange.

01:11:12 Yes, and that's what I'm asking about.

01:11:13 And that is to improve the liquidity and to increase. So, I think the board will consider should they split the stock or should they announce the bonus or should they consider both.

01:11:25 I think that is the proposal we take to the board and depending on the board's advice and guidance, we will decide to take it to the shareholders.

01:11:34 Interesting. So, hopefully, I believe the meetings of the 27th Jans will talk to you then about it.

01:11:38 But let's go back to the insurance business. What is the timeline on this insurance business, of course, hitting the end consumer?

01:11:45 And also, what I want to understand from you is when will this be revenue accretive?

01:11:49 Of course. So, this insurance business, you can imagine that from the immediate in January month itself, we are going to start the business.

01:12:01 And this will create a revenue of, I think, there are two types of insurance. One is which we bundle with our loan product.

01:12:11 So, the total revenue will be in the range of about more than 60 crore rupees. I think we are quite competitive in that. We will surprise you on that.

01:12:21 And we hope to make 20 to 25 crore rupees profit, but our targets are better.

01:12:27 And we hope that at least 0.75 to 1% ROE we make only from the fee income of the insurance.

01:12:36 If you look at our car business, which is also fee income, we hope to generate in the range of 1.5 to 2% fee income from the car loan alone business.

01:12:45 So, collectively, other than the interest income, we want to give a push to our fee income base by the insurance and by the car loan distribution about 3%.

01:12:56 So, you have indicated you are going to cross-sell to customers. So, what sort of customer count can we expect for insurance?

01:13:04 And of course, then you can tell me about the broader car and the gold loan as well, because those are new businesses that contribute to your top line quite significantly now in FY25.

01:13:14 So, we hope to close our customer base in excess of about 3,25,000 this year, active customer base. I'm not talking about those customers who close their account or repay them.

01:13:27 So, by the next 2025, we hope to have a customer base in excess of about 6, 6.5 lakh customers.

01:13:37 6.5 lakh customers and you've got a board meeting on the 27th of January.

01:13:42 So, Sharma, this is Samina. Thank you very much for joining us.

01:13:45 The stocks were on a tear. The market clearly understands and recognizes the fact that Capri Global is on a very, very strong growth path.

01:13:52 We will try and connect back with you on the 28th, hopefully, and get more on that, you know, the meeting that's scheduled on fundraise bonus or a stock split as well.

01:14:00 But good luck. See you soon.

01:14:01 Thank you. Thank you so much.

01:14:03 That was Rajesh Sharma. Capri Global has been an outperforming counter for the last couple of weeks.

01:14:08 Even in the year, it's actually outperformed the broader markets pretty sharply. 17% gain yesterday.

01:14:13 The markets are down this morning. The stock is expected to still see a gap up of almost 4%.

01:14:19 But Neerav, I think the day belongs to HDFC Bank. Now, pre-open is indicating to a 6% cut.

01:14:25 Is this likely? I mean, I'm not sure whether this is just trades all over the place or a good chance that we might see a 6-7% cut on the counter.

01:14:34 What do you feel?

01:14:36 I would be inclined to believe that I think the stock should settle down with a cut of around 2-3%.

01:14:45 So that will be more realistic. I think this is overdone. It's an extreme reaction.

01:14:52 Meanwhile, there has been a large trade, a blockade of 19 lakh shares of HDFC pre-market.

01:15:00 And, you know, yeah, Neerav, perhaps we are seeing a huge reaction instantly.

01:15:07 It might settle, but I just want to get Chandan on that. I know you've spoken about HDFC Bank.

01:15:12 What would be your first strategy on HDFC as we open, Chandan, and on the Bank Nifty as well?

01:15:18 I just want to highlight the Bank Nifty down over 3% in pre-open.

01:15:24 So I think let them settle. As I mentioned, that key support I'm looking at will be at 47,250.

01:15:30 If it opens much lower, then we need to change the stance because in that scenario, the Bank Nifty may form a negative price pattern.

01:15:36 So till it holds below 47,000 or 47,250, I feel comfortable.

01:15:43 But the way it's showing the opening on the lower side, we need to change the strategy for the further decline.

01:15:49 HDFC Bank, as of now, I believe 1550 could take the support. So near 1550, one can look for some accumulations.

01:15:56 But I think let them stable, let the volatility cool off after a long time, which is happening.

01:16:01 And then we'll take the plan to trade accordingly. And one more important part is that 46,500 is 50 day exponential moving average.

01:16:08 Below that, market may see further decline and some corrective move in the index going forward.

01:16:16 Chandan, what would you do with an axis ICICI Bank all looking weak in morning trade or looking set to be weak in morning trade?

01:16:25 Anything that you would want to accumulate at lower levels?

01:16:27 So I'll go for buying in ICC Bank on decline. If I get opportunity near 970 or 965, I can accumulate in ICC Bank.

01:16:36 While I wait for X's in HDFC Bank and other PSU and private bank in the market.

01:16:41 Right. Chandan, Nirav, stay with us. It's going to be a down day.

01:16:45 A couple of counters that we'll watch out for, of course, HDFC Bank on back of earnings, L&T Tech, revenue growth was lower than estimates.

01:16:51 GMR Airport, ICICI securities where revenues were up. TV18 as well, they've posted a loss of 12 crores versus a profit of 42 crores last year.

01:17:00 So lots of stock specific reaction is what we are expecting. The big mover, which will determine the direction of the index,

01:17:07 Bank Nifty as well is going to be HDFC Bank. Let's not forget that Wipro as well got trashed in overnight trade.

01:17:13 The ADR there as well was down quite sharply. So it's going to be a weak start.

01:17:17 But like Chandan said, 21.850 is a level you want to watch out for.

01:17:21 If that is a level that holds, then fresh longs could start going back into the market.

01:17:26 21.624 is another important level. It's the 20-day moving average that you want to track in trade this morning.

01:17:32 Oh, this is not looking good. 21,700. So we were looking at 21.800, but we've taken a bigger cut than expected.

01:17:41 And this might be all about HDFC Bank. If we can just quickly pull that up to 300 odd points, 21.725, the sharp fall is there.

01:17:49 And it is clearly being led by HDFC Bank. We were expecting a cut. Remember, FI's hold 52% of the banks.

01:17:56 The fall was not expected to be this large. But the ADR tanked 7% and the bank itself on the exchanges is down 5.5%,

01:18:05 single-handedly taking the Nifty and Bank Nifty lower. So 5.5% cut on HDFC Bank.

01:18:10 The Nifty is finding its feet, but 21.750 is what it's trading at. It will make an attempt to move to levels of 21.800.

01:18:18 But for now, it's weakness on the Nifty as well. Bank Nifty looking pretty bad. That's the cut.

01:18:24 I mean, I don't even know what to say. Broader markets, like we said, what a weak point.

01:18:30 They were looking expensive and stretched. This morning, underperforming, or rather performing in line with the benchmark,

01:18:35 you are seeing a cut on the small cap and the mid cap index to tune of about a percent and a half.

01:18:39 That's the Nifty. It is trying to settle in its fine and speed, like I said.

01:18:43 It will attempt 21.800 and try to hold around those levels. For now, you are seeing a cut of about 250 points on the index itself.

01:18:52 The breadth is very weak. You've only got a bunch of counters that are trading higher.

01:18:57 And I'll start with HDFC Bank, which is the biggest loser of the morning. It's down almost 6%.

01:19:03 But the good news is it's off the day's low point. It saw a gap down of 6.5%, recovered nearly 1% from the day's weakest point.

01:19:11 Today is recovering as we speak, and this might determine the texture and the mood of trade for the next few hours as well.

01:19:17 Metals are also getting trashed. The dollar index trades at a 20-day moving average,

01:19:21 and the stronger dollar usually means disappointment for metal stocks and also expectation of a stimulus coming in from China.

01:19:28 Now, we've talked about this for many months. Again, nothing's coming from China.

01:19:31 The disappointment of that could mean that some of these metal names are looking weak.

01:19:35 So Tata Steel, Hindalco are some of the counters that are trading slightly lower.

01:19:40 Tata Motors is also down. On the gaining side, I'll quickly mention Infi, Bharti, RIL.

01:19:45 But really, that's not even a talking point. We have with us Vishy, who is joining.

01:19:50 Vishy, are you joining us right away? The stock is off the day's low. It was down 6.5%.

01:19:55 So pretty much in line with the ADR did. But I'm taking half from the fact that we've recovered nearly a percent and a half from the day's low.

01:20:02 So the buying is coming in at low levels.

01:20:04 So what we did see with respect to the results, Samina, was the way the bank's operating performance has not been so strong

01:20:13 that it gives a lot of confidence to the analysts in the streets.

01:20:17 So obviously, on the net interest income front, the rise of about 4% was lower than what was widely expected at about 8%.

01:20:26 Similarly, on the deposit growth front, 2% deposit growth sequentially, as well as while,

01:20:32 on the other hand, you see advances grow about 4.95% on a sequential basis.

01:20:37 So clearly, deposits still lagging the advances growth, the credit deposit ratio, the LDR, as it is popularly known,

01:20:45 that's at about 110%, which is a very, very huge mark for the LDR.

01:20:50 And that's much higher than where the rest of the market is.

01:20:53 So that is a sign of worry because that points to slower deposit growth.

01:20:58 These things put together, of course, should have started showing up on the NIM front.

01:21:02 NIM has largely remained stable.

01:21:04 But what analysts are pointing out is that future levers for growth are limited for HDFC Bank

01:21:10 because as they push up the branch expansion strategy, as they push up the deposit accretion strategy,

01:21:17 all of those things will have a direct impact on the net interest margin.

01:21:20 So there the bank has lost for the first time, maybe in a very long time, a share of market on the deposit front.

01:21:27 And that's a sign of worry as well as on the provisioning front.

01:21:30 They are about 1200 odd crore worth of provisioning for AIF related dues.

01:21:34 So that is something that the market is concerned about.

01:21:37 Very quickly, Vishy, while the stock has recovered, have you looked at brokerages?

01:21:41 I know Newama has cut their earnings expectation by about 5% to 6%.

01:21:44 Anything on CLSA? Because I think that is also what is setting the mood.

01:21:48 We've also seen a block deal that's happened, which was fairly large just a few minutes ago.

01:21:51 Yeah. So on the brokerage front, it's largely a mixed bag.

01:21:54 Some of them have cut their expectations, while some of the larger players in the market,

01:21:58 you talk about Macquarie, you talk about CLSA, they've all lowered their target price.

01:22:05 But then there's also on the call for the stock, they're reiterating a buy, which is a bit of a mixed bag.

01:22:13 So no re-rating, neither is there a de-rating.

01:22:15 They've lowered their revenue targets on HDFC Bank, but they continue to maintain a buy call.

01:22:21 The stock, like we said, is down 5%.

01:22:24 Bank Nifty, if I can quickly get that up as well, that is seeing a cut of 2.5%.

01:22:27 Like I said, you would recover and move back to levels of 21.800, and that's exactly what the Nifty is down.

01:22:33 Comfortable around 21.840 is what we have.

01:22:37 That's Bank Nifty. It's HDFC, Federal Bank and Axis Bank that are your top losers on Bank Nifty.

01:22:43 Tamana, I will highlight Federal and ICICI Bank for you, but HDFC is the biggest loser on the pack

01:22:49 and the rest of the space also not looking good.

01:22:52 But a little bit of a recovery coming through on the street.

01:22:55 Unfortunately for HDFC Bank as well, we're seeing a little bit of buying at low levels.

01:22:59 Yeah. So let's see what happens during the rest of the day.

01:23:02 But the announcement that there's going to be likely a listing of HDB financial services could be a bit of a saving grace

01:23:09 because that's where value unlocking happens for HDFC Bank.

01:23:11 And there was that big block deal on the stock as well this morning.

01:23:13 But this is, of course, a large cap.

01:23:15 Tamana, anything on the mid cap? I think we've got enough and more to talk about this morning.

01:23:19 So I'm liking the sort of party on the wall this morning.

01:23:23 That's definitely a pun. We should do this more often, but on a better day.

01:23:26 Yes, absolutely. HDFC feeling the pain.

01:23:29 But as Chandan Tapadia said, even as we went into trade at lower levels,

01:23:33 there's definitely an opportunity to accumulate.

01:23:36 Let's look at what's happening in the wider universe, even as stocks settle.

01:23:40 And it's not all negative as far as earning responses are concerned.

01:23:44 Let me pull up L&T Tech, where the numbers were expected to be decent.

01:23:49 And you're seeing a pretty, pretty good response on both L&T Tech was on our watch list this morning.

01:23:56 ICSA Lombard, I spoke about it as well. Numbers are good.

01:24:00 About 5 percent, their motor business has revved up.

01:24:05 L&T Tech also has some buy calls on it from brokerage.

01:24:08 ICSA Securities is a bit of a surprise there because their numbers actually look very good.

01:24:15 But then there is a merger plan in the offing.

01:24:17 And that's perhaps why you're seeing a bit of pressure coming in on ISEC.

01:24:22 Non Results News, though, a business update which came this morning from Adani Energy Solutions.

01:24:28 That was on our watch list as well. And not too positive over there in an otherwise bleak market.

01:24:34 But their sales have increased about 14 percent.

01:24:38 And their contracts for smart meters has also revved up and looking quite good.

01:24:44 I read another stock that we want to track this morning.

01:24:47 And look at how it's doing. It's doing pretty well, 2.5 percent up.

01:24:51 At this point, they've joined hands with the Indian Overseas Bank.

01:24:55 And they're going to be financing green loans or renewable energy projects.

01:25:00 And that stock is up. Rail Vikas Nigam has formed a JV for solar projects outside India.

01:25:07 That stock also up. You know, if you're looking for a broader theme in this market,

01:25:11 renewables and new expansions in the renewable space has been a consistent winner over a longer term.

01:25:18 So these are some of the stocks looking good this morning as an outlier,

01:25:23 though I would say that the rest of the picture is quite bleak.

01:25:26 We'll wait and see if there is an improvement there in the next few minutes or so. Yes, Samina.

01:25:32 I think there is a little bit of recovery that's come in the street.

01:25:35 We dipped sharply below 21,800, but have recovered from that.

01:25:40 950 points off on the Bank Nifty. The Nifty is going to try and respect 21,800, which is what it trades around.

01:25:47 So there is a little bit of pressure between the 21,800 to 21,850 on the benchmark itself.

01:25:52 Tamanna has mentioned a whole bunch of stocks. I'm just going to add a few gainers,

01:25:56 try and find some hope in a little bit of a down market. RVNL is up again, three and a half percent today.

01:26:01 IRFC is also up 2 percent and Mazda Docks is up two and a half percent.

01:26:05 You've got GMR Infra that's up 1 percent on back of those airport numbers that we got in.

01:26:09 You've also got LTTS that is up 2 percent.

01:26:13 So those are a few names that aren't doing too badly on the gaining side.

01:26:17 On the losing side, you've got you've got big cuts all over the place.

01:26:21 But I'll take a look at Capri Global as well before I quickly move back to our guest.

01:26:25 Capri Global, remember, was up 17 percent yesterday. We spoke to the management this morning.

01:26:30 The count has seen another three and a half percent up move on a day like today.

01:26:33 Chandan, 21,850 is I know what you were betting on.

01:26:37 I did think that 21,800 might act as a little bit of a support.

01:26:40 There is a bit of a tug of war between 21,800 and 21,850.

01:26:44 At these levels, any trade on the index intraday, clearly?

01:26:49 So as of now, the index has broken.

01:26:52 It's breached an important level in morning panic.

01:26:55 So I think we need to wait and watch.

01:26:58 However, the good part is the opening lows are respected here.

01:27:02 But I'll trade only if it goes above 21,850.

01:27:05 Today it made high near 21,850 but failed to hold above the same.

01:27:09 So my conditional buy trade will be only above 21,850 with support of 21,700.

01:27:14 So if it fails to hold 21,850, then I'll be on the back foot to witness further decline to retest the morning lows.

01:27:21 Yeah. Let me go to you, Nirav, for opening comments for a bit of a smackdown, I would say, as markets have opened.

01:27:29 But are you expecting to settle? We're already seeing a bit of a settling effect on the Nifty and the Bank Nifty from where we open.

01:27:38 Look at IT. IT stocks now up in the green, the Nifty, IT back in the green.

01:27:42 Nirav, what would be your top call on a day like this?

01:27:46 Would you be looking to accumulate at levels, anything that you're on your list, which you think might be available today?

01:27:53 As we indicated that this is going to be a perfect storm.

01:27:56 And I think we maintain our position that HDFC Bank is likely to settle down and close in the range of 2 to 3 percent cut.

01:28:07 We would like to look at certain niche companies which are into the techno commercial assistance to the various sectors.

01:28:18 So we'd like to have a look at companies like IRIDA or IRFC, Tourism Finance Corporation, Woodco, etc.

01:28:26 Because it seems from the price movement and the recent announcements that the government has a bigger plan in place for all these companies.

01:28:35 And they have a bigger role to play in their respective sectors.

01:28:39 So we'd like to have a look at these sectors particularly and these stocks.

01:28:43 Look at the sea and the saw happening with banks and IT.

01:28:46 Banks are getting a drubbing. IT is having not a bad day at all after the huge hit that tech stocks took yesterday.

01:28:55 Infosys up in the green nearly a percent up. TCS as well.

01:29:00 We talked about LT Tech on the back of good numbers, relatively good numbers.

01:29:05 Tech Mahindra, all of them doing fairly well.

01:29:08 Chandan, anything that you would have on your radar right now on the tech space?

01:29:14 So in tech space we have seen a good recovery in the last 2-3 days.

01:29:19 And I believe buy on decline could continue.

01:29:22 Besoft and TechMind are our two favorite names.

01:29:24 I'll go with Besoft, one of the strongest set up in the market.

01:29:27 You can buy with support of 765. Here we can see again move towards 810-820 levels.

01:29:34 By the way, look at what's happening with IRFC.

01:29:37 Polycab, Zee Entertainment, all of them doing very well this morning.

01:29:42 IRFC up another 10%. Chandan, any views on IRFC?

01:29:46 Which has just been a one-way movement last few sessions at least.

01:29:51 Yeah, positive view on IRFC and I think morning decline is the perfect opportunity to accumulate the counter.

01:29:56 Buy near 140 with support of 134. Here we are expecting to run up to 150 zone.

01:30:04 Just a quick mention of all the other big losers on the Nifty 500.

01:30:08 Angel One is getting a drubbing this morning.

01:30:11 The numbers were disappointing with the street but the stock itself on Angel One right now is,

01:30:17 okay I'm not sure whether again that's the right number on Angel One,

01:30:20 but it is indicating to 2% move on the stock.

01:30:24 If I can also pull up Vodafone Idea, take a look at Vodafone Idea.

01:30:27 Let's see how that one is doing. As we speak, you should be seeing some movement on Vodafone Idea as well.

01:30:33 1.5% odd is what we've got. Capri Global, ITI, IRFC, PNB Housing, Aster DM.

01:30:41 In fact, Tamna will be talking to them exclusively in just a few minutes.

01:30:45 The stock itself is actually looking pretty good. A 2% up move is what we have on Aster DM.

01:30:51 You've also got Zomato that's trading higher. You've got Polycap.

01:30:55 Again, I'm going to mention this one because it's been on a run for the last few days.

01:31:00 This morning as well, Polycap trading with a marginal gain as we see it.

01:31:04 All in all, it's largely banks and it's largely HDFC followed by Federal and Axis that is taking the markets single-handedly lower.

01:31:12 Metal is also not looking too good. IT is consolidating at these levels.

01:31:16 No big shakes there as well. Agam, are you ready with your Nifty update?

01:31:21 We did believe that we'd see a fall, but the fall is exaggerated.

01:31:26 We've gone below levels of 21,700 almost very briefly.

01:31:30 But 821,850 is going to be important. HDFC as well has recovered from the day's low, but the weakness is still there.

01:31:38 The buying is not coming in lock, stock, barrel as we'd have thought.

01:31:41 Something that we've spoken about earlier, a couple of things playing out.

01:31:46 Firstly, for all the positions who had gone ahead and sold yesterday,

01:31:50 to a certain extent in the first 15-20 minutes in the first one hour of trade, there will be a little bit of recovery.

01:31:57 After that is when the question comes in whether or not market participants in fact want to go ahead and initiate fresh shorts at that point in time.

01:32:05 Remember that this is a very sharp open on the downside, which also means that all those who were longs were forced out of their positions.

01:32:15 That process also does take about 15 minutes to about the first half an hour of trade.

01:32:21 I reckon there will be a stability towards the mark of 10 a.m.

01:32:26 And from there on, there is an anticipation that we will start to see a new trend.

01:32:32 Whether or not that is towards the upside or the downside, that's going to be dependent on where the market participants want to take that up.

01:32:41 For now, what's happening with the bank Nifty is, sure, a 2.5% cut.

01:32:46 This is not an ordinary cut.

01:32:48 This by no means is something that we see on a day-to-day basis.

01:32:53 And the fact that we are looking at an over 1,000-point decline as far as Nifty is concerned,

01:32:59 also meaning in looking at an increase in open interest.

01:33:03 So this is not just cutting of earlier positions.

01:33:05 This is fresh entries towards shorts.

01:33:08 And that also means that this perhaps could not, just as far as the bank Nifty is concerned,

01:33:14 not only profit-taking, but it's also initiation of new short positions into the system.

01:33:20 Yesterday, we saw a lot of writing around calls.

01:33:23 And at the moment, writing and calls is all that we are seeing as far as the bank Nifty goes.

01:33:28 So that is, again, another concern, at least on an intraday basis.

01:33:31 The fact that this falls on the weekly options expiry makes things extremely challenging for all those who are long in the market.

01:33:39 I want to quickly pull up the HDFC bank options market.

01:33:43 And as I was suggesting over the previous couple of sessions,

01:33:47 there was so much open interest accumulation around the 1700 call

01:33:53 that it did seem to a certain extent a high probability that the HDFC bank would not go towards that mark.

01:34:00 That said, the whole activity has completely changed.

01:34:04 And now 1700 mark is completely out of the picture.

01:34:07 And we are now starting to talk about 1600 at the moment as we speak.

01:34:12 For a stock like HDFC bank to see a cut of as much as 5 percent,

01:34:17 to lose a market capitalization of as much as 64,000 crores,

01:34:22 remember, any company with a market cap of 64,000 crores would be classified as a large cap per the AMFI rules.

01:34:29 So that's the kind of cut that we are seeing in HDFC bank at the moment.

01:34:34 And hence that precipitation leading to that weakness as far as your benchmarks are concerned as well.

01:34:40 Quickly, Agam, and I want to just, of course, HDFC bank,

01:34:43 and we discussed how the large chunk of this bank is being held by FIs.

01:34:47 But despite that, I mean, FIs don't usually come and sell a stock just because of weak numbers.

01:34:52 But we are seeing pressure on the stock.

01:34:54 Let's go back to what happened this month.

01:34:56 We've talked about our Jan usually is a weak month.

01:34:59 We felt derailed in the last few days when the Nifty went all the way up to 22,000.

01:35:03 But we're almost at levels that we started the year at.

01:35:07 I mean, the year started at 21,775.

01:35:10 And as we see it on the Nifty, we are back at those levels.

01:35:14 So far, there's actually been no gain year to date or month to date, if I may call it so.

01:35:19 Right. So, you know, when markets are ripe for a correction,

01:35:22 you know what it usually means, it looks for a trigger.

01:35:25 And I reckon that they found that trigger in HDFC bank,

01:35:28 even though the earnings are not as bad as the kind of reaction that we are seeing as far as HDFC bank goes.

01:35:33 But markets have found that trigger.

01:35:35 And for now, they are taking that as an opportunity to go ahead and perhaps book profits that they made in 2023.

01:35:43 And that perhaps is one of the other factors that is playing against our markets at this point in time.

01:35:49 Today's day of trade. Having said that, your FIN Nifty is your biggest loser today.

01:35:55 You're having a, you know, a slew of sales on the finance index.

01:36:00 And actually only ICICI Lombard standing out there.

01:36:04 The entire pack, your REC, PFCs, Bajaj Finance also seeing a bit of a hit today.

01:36:10 I also want to call attention to Bajaj Auto. And yes, the overall sentiment is weak.

01:36:15 But Bajaj Auto also having a bad day on the street today, down about 2%.

01:36:21 I have Chandan Taparia with me. A quick last call, Chandan Taparia,

01:36:25 before we take a break on, you know, what you would do with an ICICI Lombard and a Polycab, if you track it at all.

01:36:34 Polycab defying all odds continues to be up in the green today.

01:36:37 ICICI Lombard doing well on the back of numbers.

01:36:41 Yes. So when I talk about the Polycab, the stock fell sharply a couple of days back,

01:36:47 led by whatever the updates happened. So I think some recovery is there.

01:36:52 We have to place some recovery that can go to 4500 level.

01:36:56 Talking about ICICI GI, I think recovery can be seen.

01:37:00 This is comparatively low beta counter. It hardly has relation with the market volatility comparatively.

01:37:06 It is taken support at key zones. So I think 5 to 8% recovery could be there.

01:37:12 And I believe in such kind of market, such stock, including ICICI Lombard can be taken.

01:37:17 But downside seems to be limited because already they were consolidating and some recovery could be there in the count.

01:37:23 Chandan, Nirav, that's the view coming on the larger markets.

01:37:27 But one green or spot of hope we're seeing in the street is L&T Tech.

01:37:31 Numbers were largely in line with expectation, which is flat.

01:37:35 The stock itself is trading at the gain of 2%.

01:37:38 Well, their revenue and net profit, like we said, were in line with expectations,

01:37:42 but income reported was slightly slower.

01:37:45 We did catch up with the management of the company's engineering R&D spends and macro headwinds in the US.

01:37:52 Here's a slice of that conversation we had with the management.

01:37:56 Growth all around, each of the verticals, profits up 13% plus year on year,

01:38:04 6% plus quarter on quarter, 50 patents filed again, 25 for our clients, 25 for ourselves.

01:38:13 Six deal wins and more than $10 million, out of which one of it is a $40 million deal.

01:38:18 The second one is a $20 million, a third is a $10 million cyber security deal from a global major.

01:38:23 And then others, right, plus impoundments with BP, as well as US auto OEM in the software-defined space.

01:38:31 All in all, it has been a busy quarter for us, if I may.

01:38:34 Now, in terms of headwinds, deal wins, we've actually just concluded our second client advisory council in December in Dallas, Texas.

01:38:42 And what came out of that was that we do believe our clients will continue to spend in three broad categories.

01:38:49 They will spend on product refresh, redesign, number one.

01:38:55 Number two, they will spend on areas of productivity and efficiency, be it on the product, be it on the shop floor.

01:39:02 And third, there will be continued investments, if I may, in the software-defined space.

01:39:09 In fact, people are talking about not just software-defined vehicles, but the new terminology coming out is software-defined anything and everything.

01:39:17 Right. So those are the three clear, shall I say, themes that came out of our conversations.

01:39:25 The last one that we caught that we think is very relevant is a number of our customers are talking about localized supply chains, supply chain resilience.

01:39:34 And that means there will be more plants coming up locally in the US and Europe.

01:39:39 We saw that happening in '23 and we see that continuing on into 2024 as well.

01:39:44 OK, so that's indeed very interesting. And I'm glad you brought up the deal part as well in the previous answer,

01:39:49 because I want to specifically understand about LTT's deal with BP PLC.

01:39:54 Now, how is that holding up? Have the accruals started showing up in top line?

01:39:59 So the BP deal that we have signed is not, let's not call it a deal. It's a partnership.

01:40:04 It's a relationship where we will work with them in digital engineering and low carbon initiatives,

01:40:11 helping support them in their transformation journey. Like any of these large relationships that you sign,

01:40:20 it starts off by creating a sort of a storyline and a playbook that we will operate under a standard operating procedure

01:40:29 that helps us put certain building blocks in place, if I may. And then you build up from there.

01:40:36 We are comfortable with the pace of growth that we are seeing with the relationship.

01:40:41 We are already executing some projects and work with them in the current, in December, as well as onwards in quarter four.

01:40:50 I would confirm that this relationship will contribute positively to our fiscal 24 revenues, as well as, of course, their 525 revenues.

01:41:00 But more than looking at it as a revenue deal, I would again re-emphasize it's a relationship.

01:41:06 We look at it as a long term relationship as we move forward. And we are both companies are investing to make this a win win for both.

01:41:15 All right. All right. Makes sense, sir. Sir, you've also reaffirmed your revenue growth guidance of 17.5 to 18.5 percent in CC terms, I believe.

01:41:24 So what's your rationale behind this? So, ma'am, as you've been seeing, we've been continuing to have deal wins over the last few quarters on a consistent basis.

01:41:36 Last two quarters, all the segments have grown sequentially for us. And you can see it's a fairly secular growth.

01:41:44 And therefore, we are fairly comfortable with that 17 to 18.5. There is a certain comfort in that 17.5++ range.

01:41:53 And we are working towards the rest of it. So we are and that's why we are retaining our guidance and we continue to work on it.

01:41:59 The quarter is still in play. All right. Fair enough. And if I were to look at profitability, sir, how do you plan to shore it up in FY25?

01:42:06 Any guidance on that? So if you will recall, when we had prior to coming together with Smart World, we were operating in the 14% plus P80 range.

01:42:18 And then we came together and it's taken us a little bit of time to stabilize working together.

01:42:23 And I am so proud and so grateful to the teams that have come together and delivered solutions, done wins.

01:42:30 So we have promised you wins in the global marketplace with the next gen coms. We gave that to you last quarter.

01:42:36 We promise you wins in cybersecurity. We've given that this quarter. We promised alliances.

01:42:43 We did that with last quarter as well as this quarter. So I'm fairly comfortable.

01:42:49 Again, grateful for all the solutions that people are building. And as you move forward, I'm fairly confident that we will be able to continue to work on our margins as we move forward.

01:43:00 We have guided. We don't give exact guidance on margins, but you can expect the 17% odd trajectory in EBIT margins to be retained in quarter four.

01:43:10 And then we'll go from there in quarter five. We'll go forward in FY25. Here in play, a lot to be done, lots to be discovered.

01:43:17 All right. Thank you so much for that clarity, sir. I have the numbers, a set of numbers in front of me, and I'm also seeing strong year on year growth for telecom and high tech segments.

01:43:27 So is this expected to continue? Yes. OK. OK. Fair enough. Any guidance, perhaps, on that?

01:43:37 We can't give sub bullets to guidance. Guidance is a guidance and we continue to work on it.

01:43:41 All right, sir. And my last bit before we close this conversation, sir, if I have to look at the larger picture of deal making, are they still taking a longer time to close?

01:43:52 Deals are taking time to close. I do want to admit to you every deal that we have, it takes a double amount, a number of meetings than say two years ago.

01:44:03 And we continue to be braced for it. We have learned how to live with it. And therefore, our pace has changed.

01:44:10 We've also tried to have multiple deals at any given time. And we are focusing on value creation for our clients.

01:44:18 We are focusing on immediate value realization for our clients, which then helps us in being able to close some of this.

01:44:25 I do want to call out the patents that we have filed. I do want to let you know that we have filed 53 patents in AI in the last four months.

01:44:34 So you can see that the pace that we are investing in technology continues unabated.

01:44:40 And that gives us confidence that we will continue to maintain these strong relationships that we've got with our clients that should help us with our trajectory in the future.

01:44:48 All right, sir. Thanks so much for clarifying those points and talking to NDTV Profit. It was a pleasure having you here with us.

01:44:55 Thank you so much. Take care. Bye bye.

01:44:58 All right. So that was L&T Tech Management. And there has been quite a positive response to their Q3 numbers.

01:45:05 We're taking a very short break, but our conversations with Corporate India continue.

01:45:09 On the other side, I'm speaking with Dr. Nitish Shetty, the CEO of Astre DM Healthcare.

01:45:14 It's a stock that has had a good run up because of their dividend payout. More on that after the break.

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01:49:15 Welcome. You're watching India Market Open. We're speaking about a stock that has been zooming, did very well in trade yesterday as well, Astre DM.

01:49:24 Now, the hospital chain has seen this kind of interest because they have sold off their GCC business.

01:49:33 This was something which was expected for a while. So, they've sold the GCC business for a consideration of a little over $1 billion

01:49:40 and also said that 70% to 80% of the proceeds will go back as dividends.

01:49:46 The dividend is expected to be in the range of 110 to 120 rupees per share.

01:49:52 And hence, you're seeing that kind of a bounce in the stock price in all of these days.

01:49:57 But what are the plans ahead for the company and what comes next?

01:50:01 To speak more on this, I'm joined now by Dr. Niti Shetty, he's CEO of Astre DM Healthcare.

01:50:07 Dr. Shetty, very good morning to you. Thank you for speaking with us today on NDTV Profit.

01:50:12 Let's begin by understanding the decision to plow back 70% to 80% of this sale into dividends.

01:50:20 And what are the plans going forward for expansion in your India business?

01:50:26 Does the focus now shift squarely to the India business?

01:50:30 Thank you, Jamuna. A very good morning to all.

01:50:35 The shift is going to be, the more focus is going to be on the India business now.

01:50:39 India business now, as we speak, it's close to 4,800 beds we have now across five states.

01:50:46 That includes Kerala, Karnataka, Maharashtra, Andhra and Telangana. That makes it 19 hospitals.

01:50:52 So going forward, next three to five years, we have plans to have another 1,500 beds in Kerala and Karnataka,

01:51:01 which is a mix of both brownfield project and greenfield project.

01:51:06 Majorly a brownfield project, 60% of the beds are going to be brownfield,

01:51:10 which means that we are adding capacity to the existing hospitals, which are already having an occupancy of about 80%.

01:51:17 That's the plan we have now, a bigger plan.

01:51:21 And around the hospitals, we continue to have our presence of pharmacies and labs,

01:51:25 which is primarily to build a robust, integrated healthcare system.

01:51:30 Your focus is going to remain on the current states, Kerala, Andhra, Tamil Nadu, Maharashtra to some extent,

01:51:39 or are you expanding your footprint?

01:51:43 Yeah, the next three years, we are going to deploy beds in the area where we are present, like in Karnataka and Kerala.

01:51:51 But we are also looking at expansion into the adjoining states, like Tamil Nadu and Maharashtra.

01:51:56 And also we have an interest in North India. We are actually exploring opportunities in U.K.

01:52:04 Having said that, right now we are presenting organic growth in the area where we are present,

01:52:10 but we would like to expand to a newer geography, it could be Neland.

01:52:14 Okay, so exploring opportunities in U.P., that's interesting.

01:52:17 Can I just dial back Dr. Shetty and understand what the impact is going to be of this hiving of the GCC business,

01:52:25 although the promoters continue to hold 30% stake and will be running it as well.

01:52:32 Now that that overhang is out of the way and analysts who track your company closely were worried about it,

01:52:38 what is the kind of impact you expect on the core India business numbers of hiving off or selling off the GCC business?

01:52:47 We are very positive about this segregation, especially for India.

01:52:53 The GCC market and the India market are two entirely different markets with their own nuances and business dynamics.

01:53:01 With a new focus on India, we have now a renewed focus on India and have a clear roadmap.

01:53:07 And India presents a tremendous opportunity for ramping up.

01:53:11 And having said that, we don't have small plans, we have massive plans.

01:53:16 We want to be among the top three in India. That's the way we are looking at going forward.

01:53:22 That should sum up to what is the plan of AstroDM in India, to be among the top three in India.

01:53:29 How are you going to fund this ambitious plan, considering that you're not utilizing the proceeds from selling off the GCC business?

01:53:38 Do you need to raise more funds?

01:53:41 And what is the kind of capex that you're forcing, Dr. Shetty, if you want to be one of the top three players in India?

01:53:48 Presently, for the 1,500 beds, we have enough cash within the system and through the internet,

01:53:55 we have enough cash to maintain this expansion, 1,500 bed expansion.

01:54:06 But when it comes to growth, acquisition of the newer geography,

01:54:12 we are hoping that by our performance in the next one or two years, our share price should be a currency to make that.

01:54:23 And what is the kind of capex that you have set aside for this?

01:54:28 Is your growth going to be largely inorganic?

01:54:32 The present one is going to be organic, which we have set aside around 800 to 850 crores.

01:54:38 That would suffice for our present expansion.

01:54:41 But inorganic, that's a plan when we have this post-segregation, when we have more clarity, we would like to explore that option.

01:54:50 OK, so you've set aside about 800 to 850 crores for organic growth.

01:54:56 I just want to understand if there is any impact on your medical tourism because of this GCC separation or, you know,

01:55:06 selling a large stake in the GCC business.

01:55:10 What about patients who were being directed through these hospitals that you used to run or used to own in your GCC business

01:55:18 to your local hospitals here? Do you see any impact on patient flow there?

01:55:23 Not really. Because the overall 5% of our revenue comes from the MDT business,

01:55:30 40% comes from the GCC countries, and that around 20% comes from our own hospitals.

01:55:38 So it's a small amount, but that would also be how we have an arrangement as the GCC to continue to build and focus on that business.

01:55:46 I don't see any impact of our MDT business because our MDT business is not doing that.

01:55:51 OK. You know, there are certain factors that you also wanted to focus on,

01:55:58 especially on affordable health care and how you're integrating AI now into your plans ahead.

01:56:05 Why don't you talk to us about some of those?

01:56:08 Yeah, you know, AI, I think a lot of issues in healthcare, it was primarily because of the fragmented data

01:56:15 and the better utilization of the data. One of the most important goals that AI is going to lay in healthcare is to organize the data

01:56:23 to bring in more efficiency and better patient experience.

01:56:28 Whether it's in the hospital information system, needs to have AI incorporated,

01:56:32 in the business development areas we need to have AI incorporated,

01:56:37 digital CRM is one area where AI is going to be a major impact.

01:56:40 So in a nutshell, it's going to be an intersection point.

01:56:44 Healthcare of tomorrow with AI is going to be entirely different from what we see today.

01:56:51 It is going to be more robust, more efficient, and obviously it is going to benefit the patient in terms of patient experience and quality of care in the future.

01:57:02 It's going to be a major shift and India is going to play a major role in this area because unlike other countries which have a larger good healthcare system,

01:57:14 we don't have a long-term legacy. So in that terms, we are going to do better in that specific area.

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02:15:25 >> In very cold Davos, we have a very special guest today, Chairman of EY, Rajiv Mimani, with me out here.

02:15:31 Rajiv, thanks so much for taking the time out.

02:15:33 >> My pleasure. Thank you very much.

02:15:34 >> Would love to understand how you feel about conversations thus far this year at the WEF relative to whatever you may have had in the past.

02:15:41 >> Yeah. So I would say two things. One is from a global standpoint, if I was to compare it with last year, I think the mood last year was much more bearish than where it is today.

02:15:53 I think people were discussing whether we'll have one quarter of recession, slowdown or two quarters as compared to, and you know, it hasn't been the case.

02:16:00 I think things have worked out not perfectly but not as bad as what people thought it will be.

02:16:05 So this year, I find people are, I won't say they are bullish, but they probably feel that, you know, things will start picking up.

02:16:14 The interest rate cycle is coming down. Inflation is coming down.

02:16:17 Geopolitics is still a concern. AI is still which way it will happen is a concern.

02:16:22 But overall, I think people feel much better. Europe feels that they'll probably do better than where they did last year.

02:16:30 U.S. feels probably they'll be a bit slower than where they were last year.

02:16:34 Some pockets of Europe like Germany and others may go through a slowdown.

02:16:37 So that's a global perspective. From an India standpoint, I think last year also the Indian story was very strong.

02:16:43 But I think it certainly got much more reinforced this year because the growth this year really stands out as compared to global growth.

02:16:51 People are also seeing whatever was committed in the budget, you know, actually we probably done better than that.

02:16:59 So overall, I would say things are very very positive from an India standpoint.

02:17:02 AI has become much more front and center. I mean, if you walk down the promenade, you see AI much much more visible than before.

02:17:14 So it's really AI, AI, AI everywhere. Geopolitics is less muted.

02:17:18 Last time there was a lot of talk about Ukraine and everything else. I think it's muted as compared to what we saw last year.

02:17:24 And sustainability, there's a lot of talk till now, but I think given with the around economic issues, around AI,

02:17:32 I think it's it is there, but I won't say it's front and center.

02:17:36 And then there's a lot of conversation around elections, elections around the world this year, especially the U.S. elections.

02:17:42 Geopolitics muted and it's a valid point. You think the world is learning to live with the fact that these things are on now and there's nothing much that can be done about it?

02:17:52 No, I think it's a concern. I mean, it's really it's a big concern that people have, but I think for whatever reason,

02:17:57 I think that's not been discussed and debated to that extent in the forum.

02:18:00 But definitely it's a point of conversation and people are worried.

02:18:04 And especially given the fact that this is a big election year, I think people are more worried.

02:18:09 So actually two interesting points that you bring in then. One, the India story reinforced in some sense,

02:18:17 some people call it oasis of growth in an otherwise fragmented world.

02:18:21 But also in a year wherein 40-50 countries go to elections, policy continuity much more likely in India than maybe some of the others.

02:18:29 Is that working? Are people talking about that with you?

02:18:31 Yeah, I think so. I think people feel that there will be a continuity in policy.

02:18:35 So, I think that factor is, I am sure it's in the back of mind of people that we still have election and election results are always important.

02:18:44 One can never undermine them. But I think people, there is a general sense of confidence that the policy, there will be greater policy continuity going forward.

02:18:51 And the government has a much more medium term to long term picture in the way they are looking at things.

02:18:56 Got it. I would love to understand this from you. Last year and this year, whenever I have spoken to corporates, global corporations,

02:19:02 they all talk about how they want to increase the India share, make it India for India, make it India for the world.

02:19:08 We have not necessarily seen that in FDI numbers and you can argue that the services FDI came down as well.

02:19:13 But how do you see this translating to actual numbers being visible at the end?

02:19:19 I think it's getting better. You think so? I think it takes time. I mean it takes time for companies to pivot.

02:19:24 Plus we don't do a great job of helping people to come in, ramp up quickly, get the land, get things going.

02:19:31 I think from our side also it takes time. But I definitely see visible signs of companies now coming.

02:19:37 I mean there are some companies like Apple and others who have a very visible presence. They make a big difference.

02:19:42 In the entire telecom, in mobile handset value chain, the value addition is increasing.

02:19:48 On the consumer side, the value addition is going up very significantly.

02:19:52 Defense, we are starting to see early signs of local manufacturing and also some companies starting to look at exports and everything.

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