- #HDFCBank continues decline
- #Sensex, #Nifty trend lower
Take stock of the derivative markets with Agam Vakil and Samina Nalwala on the F&O Show. #NDTVProfitLive
- #Sensex, #Nifty trend lower
Take stock of the derivative markets with Agam Vakil and Samina Nalwala on the F&O Show. #NDTVProfitLive
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TVTranscript
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03:42 - Hello and welcome.
03:53 This is the FNO show.
03:54 I am Agam Vakil and in this show,
03:56 we take you through all that is happening
03:57 in the futures and options space in Indian equity markets.
04:00 For now, we are looking at further weakness
04:02 in Indian markets,
04:03 but a little bit of a recovery as well from day's lows.
04:06 As far as the Nifty is concerned,
04:08 we are looking at that declining by about 0.7%,
04:13 but well, on the whole,
04:15 it seems like it has hit a little bit of a bottom
04:18 and then come off from there.
04:20 As far as your other indices go,
04:22 the picture isn't very different
04:24 when it comes to the Sensex as well.
04:26 We are looking at a decline of around 0.6%.
04:30 The Bank Nifty, of course,
04:32 is the other one which will be in focus,
04:33 which will continue to be in focus
04:35 on account of the severe weakness
04:37 that we saw in the sector yesterday,
04:38 but that is also moving in tandem
04:39 with the benchmarks down by around 0.7.
04:43 Very quickly to take a look at all the constituents
04:45 of the Nifty and see where there is a pull and push
04:47 coming in as far as some of these indices go.
04:50 Well, we do have Axis Bank and ICICI Bank
04:53 looking at a tad bit of recovery,
04:55 but a bulk of the losses still being provided by HDFC Bank,
04:59 which weighs, of course, on the index.
05:02 LTI Mindtree is the other one,
05:03 which is also weighing on the index
05:05 along with Reliance Industries and Asian Pay.
05:07 So keep an eye on some of these names.
05:09 Let's talk about the broad markets as well
05:11 and see how they're faring at this point in time,
05:13 whether or not there is a little bit of underperformance,
05:16 and there is, in fact,
05:18 taking a cut of 1.5% for the mid-cap.
05:21 The small-cap index is also down by not as much
05:23 as what we're seeing with respect to the mid-cap index.
05:26 And even in terms of the broader markets,
05:29 well, we have seen some very, very sharp moves.
05:32 I want to talk about Oracle Financial Services.
05:34 A patch of green, perhaps, here, that's what we are seeing.
05:38 So that has, of course, advanced by nearly 19% as we speak.
05:43 But besides that, in terms of a whole host
05:46 of other counters, which are also looking
05:49 at positive traction, we have Tata Communications.
05:52 That's up around 1.2%.
05:56 But of course, there is a lot more in terms of declines.
06:01 So we have Ipca Labs, which is under pressure, down 4.4%.
06:05 Tata LC is the other one, which is down around 4%.
06:09 And IRFC is looking at a bout of profit-taking
06:11 after a sharp surge that we've seen
06:13 over the course of the last few days.
06:14 So keep an eye on a whole host of these counters.
06:18 But very quickly, addressing what's happening
06:20 in the futures and options space as well,
06:22 let's take a look at the Nifty Futures,
06:24 see whether or not there is,
06:25 or there has, in fact, been a change there.
06:29 And we could have a snapshot as far
06:31 as your open interest goes, and we will get a better idea
06:35 of how things are panning out out there.
06:37 So we don't have too much addition
06:39 or subtraction in open interest.
06:41 As far as the Nifty Futures go, on the bank Nifty front,
06:45 we are looking at, once again,
06:46 very little change in open interest.
06:47 So not too much to speak for otherwise.
06:49 And of course, we're keeping an eye
06:51 on the bank Nifty, the underlying as well,
06:54 which continues to weaken further,
06:55 but nowhere close to what we've seen yesterday.
06:58 The question really is, and there is some expectation
07:00 of a bout of short covering, but can this come through
07:03 in today's day of trade?
07:04 That's something that we will eventually find out.
07:06 But let's move on and talk about the options market as well
07:10 and see how things are panning out there
07:12 as well as far as the Nifty is concerned.
07:14 And I reckon that we've seen a change in the range,
07:18 naturally because yesterday changed things around.
07:23 So in today's day of trade, we're still seeing a lot
07:25 of writing around the 21, 700, 21, 800 calls
07:29 and unwinding, of course, in those very same strikes.
07:32 And some heaviness as far as your overall
07:35 open interest is concerned.
07:36 Do remember that the Nifty put card ratio
07:38 has also moved considerably down below the mark of one.
07:42 So that's something that we will have to keep in mind
07:44 at the moment.
07:45 On that note, let's get in our experts for today.
07:47 We have Nilesh Jain of Centrum Broking, who's joining us,
07:50 as well as Bhavin Mehta, VP of Derivatives Strategies
07:53 at Dolap Capital.
07:54 Good morning to both of you.
07:54 Thanks for joining in.
07:56 Nilesh, start with you, your view on the benchmarks
07:58 at the moment.
07:59 Morning, Adam.
08:02 So yes, for the third stage session,
08:04 we have seen a fall in the market,
08:06 specifically if you look at the Nifty index.
08:08 Today, we have witnessed some amount of recovery
08:11 after testing lows below 21, 300.
08:14 Nifty is sustaining, it is trying to sustain
08:16 about 21, 400 mark in the spot levels.
08:19 So certainly, today I think could be the day
08:22 where we might see a pullback.
08:23 Today, we have a weekly expiry as well.
08:26 And interesting part is that in spite of the fall
08:29 in today's trading session, the volatility index
08:31 is still trading in the negative trajectory.
08:34 So certainly, we are expecting a pullback in the market.
08:37 Nifty may make an attempt to test 21, 500 sort of levels
08:42 in the spot for the day.
08:43 And there could be possibility of a short covering as well.
08:46 Although we are not expecting any major V-shaped recovery,
08:48 21, 600 is still acting as a major hurdle.
08:51 That's the 21 day moving average
08:52 resistance zone for the Nifty.
08:54 So till the time it doesn't take out that particular level,
08:57 we are expecting another round of selling
08:58 from the high levels.
09:00 As of now, from the current level,
09:01 we expect a pullback to continue.
09:03 On the other hand, if you look at the Bank Nifty as well,
09:06 where I think that's the pain point
09:08 for the third stage session.
09:09 So watch out for that.
09:10 We expect another round of selling
09:12 in the Bank Nifty as well.
09:13 - Okay.
09:14 So it's going to be a tough day to trade
09:17 on either direction.
09:18 That's the word coming in.
09:20 But Bhavin, your view as well
09:22 on the Nifty and the Bank Nifty.
09:24 - So good morning.
09:27 Today we have seen some good amount of development
09:33 in the first half an hour of trade.
09:36 Yesterday also, what we have observed
09:38 is that aggression on the short side.
09:41 So, big Bank Nifty, big HDFC Bank, Kotak Mahindra Bank,
09:45 they have seen some significant increase in open interest.
09:48 So what this ideally leads to is that
09:51 you see a bout of short covering from lower levels.
09:54 And with markets opening sharply lower in trade today,
09:59 this rules out further downsides,
10:00 specifically given that your PCROI is close to about 0.70.
10:05 Just two days back, it was close to 1.52
10:07 and we saw a sharp sell-off from that particular highs.
10:12 Now that PCROI is at 0.70,
10:16 there is an anticipation of a pullback rally.
10:18 Now, if this pullback rally takes indices back to 21,600
10:23 or it once again moves closer to 21,822,000,
10:28 that needs to be seen.
10:30 However, today's low would be very crucial.
10:32 If we close below today's low,
10:34 there could be another leg of sell-off overall
10:38 in majority of indices,
10:39 or be it the sectoral front or the benchmark indices.
10:44 So we are watching out for today's low as a crucial level.
10:47 If we close below that,
10:48 definitely there will be a bout of sell-off
10:50 that should ideally happen for most of the sector indices.
10:53 - Yeah, certainly today's low will be extremely critical
10:57 and I'm sure that bulls will look to defend
11:00 some of these lows as far as these markets go.
11:04 Well, we've spoken about the Nifty,
11:06 we've spoken about the Bank Nifty,
11:07 me may perhaps also address what's happening with HDFC Bank.
11:11 So Bhavin, I'll come back to you on this one.
11:13 Your view on this particular bank.
11:15 - Yeah, so as I have mentioned,
11:18 so if you look at yesterday's open interest,
11:20 there was significant amount of OI addition
11:22 and now the total OI, as of yesterday,
11:25 stood close to about 22,000 odd crores.
11:27 So this is much significantly higher
11:30 than your Bank Nifty's total OI.
11:32 So you're considering holding
11:33 significantly higher amount of open interest.
11:35 So this rules out further bout of sell-off initially,
11:39 but yes, there would be concern
11:41 of how ADR behaves in trade today,
11:43 because now if you look at the close for ADR,
11:46 it is already below the lows
11:49 that was posted two months back.
11:51 So my sense is that as long as the recovery today
11:55 and probably tomorrow overnight, if ADR recovers,
11:59 there is a possibility that HDFC Bank
12:02 will try to consolidate in this particular range.
12:05 And the next leg of move
12:08 would be definitely from Nifty first.
12:10 I mean, Nifty needs to make a crucial directional trade
12:15 either above level of 21,600 or below today's low,
12:18 which is close to 21,250 kind of range.
12:21 - Right, Nilesh, the other set of banks
12:23 which were also under pressure,
12:25 though not to the tune of HDFC Bank,
12:29 was something like a Kotak Maindra Bank
12:30 or an Axis Bank yesterday.
12:33 We're looking at a little bit of a rebound there
12:35 in today's trade.
12:37 How are you assessing movement on these?
12:39 - Well, yes, definitely there was a sell-off
12:44 across all the private sector bank
12:46 as well as BSC banking space,
12:48 but the major pain was seen in the index heavyweight counters
12:52 like Kotak Bank, Axis Bank and HDFC Bank.
12:55 So looking at today's development,
12:57 it is indicating a pullback.
12:59 And if you look at the Kotak Maindra Bank,
13:01 the 200-day exponential moving average
13:03 as well as 50 DMA, both are exactly placed at 1812 level.
13:07 So any pullback towards 1812 might get sold into,
13:11 we need a decisive break out above 1812 level
13:14 for bulls to regain the control.
13:16 But as of now, there's no doubt
13:18 that the structure has been broken down
13:21 and we might see another leg on the downside.
13:23 So any pullback might get sold into,
13:25 one has to have a cautious approach
13:28 in the private sector banking space.
13:30 Unless and until if someone has a long-term view,
13:32 I think it's a good time to accumulate all these counters.
13:35 But purely from trading point of view,
13:36 one needs to watch out important resistance zone
13:39 for the Kotak Bank, it is placed at 1812.
13:41 And if you look at the Axis Bank as well,
13:43 the immediate resistance is placed at somewhere around 1100.
13:46 So it is making an attempt.
13:48 Yes, there could be possibility of Axis Bank
13:51 to outperform the other private sector bank.
13:53 The structure looks slightly on a positive side.
13:55 So this particular counter can be bought
13:58 purely from trading point of view
13:59 for the upside target of 1120.
14:00 Absolutely, well, that's your view
14:02 on a whole host of banks that we addressed.
14:05 But on that note, we slip into a short break,
14:07 but on the other side, we get to the management of Zaggle
14:10 and we also talk about stocks with our experts.
14:12 Stay tuned in.
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17:26 - Welcome back.
17:27 And we are now in conversation
17:29 with the management of Zaggle Prepaid.
17:32 Avinash Kothkindi is a co-promoter,
17:34 MD and CEO with the company.
17:36 Avinash, good morning
17:37 and thanks so much for taking the time out.
17:39 Avinash, before I start this conversation,
17:41 let me apprise our viewers of what this conversation is about.
17:44 In the latest, we understand the company
17:46 has gotten to an agreement with Torrent Gas,
17:48 and this is to implement a closed loop fleet program.
17:52 And the time period for the execution
17:54 will be about two years.
17:55 And about 200 crores of gross transaction volume
17:58 is estimated.
18:00 Avinash, welcome to the show.
18:02 If you could actually elaborate further
18:04 and perhaps explain what this transaction is all about
18:06 and how this would benefit the company.
18:08 - Thank you for having me on the show, Agam.
18:12 Good morning.
18:13 And look, the way the fleet space works globally,
18:18 there are a whole host of companies like Fleet Core
18:20 and WEX in the US,
18:22 which are multi-billion dollar companies
18:23 who built their business
18:25 just largely offering fleet payment solutions.
18:29 And this is our foray into this space.
18:33 This is a large space.
18:35 If you look at India,
18:36 the fleet spends at about 72,900 crores for the year.
18:41 And that's the kind of volumes and potential
18:45 that we are overall looking at the size here.
18:49 And we are running a program
18:51 where without a bank partner per se,
18:54 we are running the entire program for Torrent Gas
18:57 end to end here.
18:59 So that's the unique part about this program.
19:04 And to begin with,
19:05 the estimates, conservative estimates
19:06 are about 200 crores of transactions
19:09 across about 260 outlets and about 3000 cards,
19:14 which are the initial number that we are gonna issue.
19:18 And that's for about 500 fleet owners to begin with.
19:21 - Okay.
19:22 So that's as far as this particular deal is concerned.
19:25 Could you talk to us about looking forward
19:28 in terms of FY25?
19:31 And I'm sure that you won't be able to talk too much
19:33 about the quarter gone by or the upcoming quarter
19:35 because I believe their earnings are still awaited.
19:39 Could you give us the kind of products
19:40 that you guys are working on,
19:41 the kind of investments which are in fact going into?
19:45 What can we expect going into the new year?
19:47 - Look, Agam, the space is exploding.
19:51 We are the largest player
19:52 in the spend management space in India.
19:54 We are getting opportunities to grow,
19:56 and we are seeing this, you know,
19:57 closed loop programs in the fleet side,
19:59 like this one or the Forex card,
20:02 our corporate credit card and purchase card programs
20:04 in conjunction with our accounts payable platform, Zoya,
20:08 has really taken off very well this year.
20:11 And, you know, we see growth across board
20:14 because if you look at corporates,
20:15 they're all looking to reduce their leakages,
20:18 be more compliant.
20:19 Everybody wants to digitize.
20:21 Everybody wants to put their, you know,
20:23 their own kind of seamless platform.
20:26 And we are the leaders
20:28 in being able to help companies do that
20:31 wherever there is a spend associated with it.
20:34 - Right.
20:36 Looking forward, what kind of year can we expect
20:39 when it comes to FY25 in terms of your top line growth?
20:43 If you could give me a ballpark number,
20:44 I'm not looking for exact numbers
20:46 or any guidance whatsoever.
20:48 And also when it comes to profitability going forward.
20:52 - I'm not going into specifics,
20:53 but as I said, the space is growing very rapidly
20:57 and we are the market leader in this space.
21:00 And if you look at our historical track record,
21:03 you know, we've grown fairly well
21:06 and we expect to continue that trajectory,
21:09 keeping in mind that, you know,
21:10 we raised money only in end of September.
21:14 So now that capital is gradually getting deployed
21:17 and, you know, you're seeing the results.
21:20 Also, I'm looking at, you know,
21:22 your overall revenue mix and about,
21:25 we are looking at most of your revenues
21:28 coming in from Propel platform fees,
21:31 then program fees and software.
21:33 Do you think this mix itself could change going forward?
21:36 And perhaps would it have any implications
21:38 on operating margins?
21:40 - Mix would change as we are seeing growth
21:44 on the program fees and our software revenues.
21:47 So those two lines of revenue are, you know,
21:52 growing very well, especially program fees
21:54 with the corporate credit card and purchase card,
21:58 you know, kicking in.
21:59 And overall, we see that, you know,
22:01 margins in the coming years,
22:04 we believe will improve as we go along
22:07 because this is a space where operating leverage
22:10 is significant, given the fact that we,
22:15 end of the day, are a new age business.
22:19 And a lot of the investments that we are making
22:21 in terms of building these capabilities,
22:23 building these solutions,
22:25 can be reused again and again for multiple customers.
22:30 - Well, we leave it at that, Avinash.
22:33 Thank you so much for joining us and taking us through,
22:36 well, your latest update.
22:37 We wish you the best for the future.
22:39 - Thank you so much, Agap.
22:40 Thank you for having me.
22:41 - Yeah. - Bye.
22:42 - Well, so that's the management of Zagre.
22:44 And from there on, we shift back focus to the markets
22:47 and what our experts have in terms of recommendations.
22:51 Bhavin, I'll come back to you on this one.
22:53 What are you tracking?
22:55 What's on your radar?
22:56 - Yeah.
22:58 So given that markets have actually turned very volatile,
23:02 and we are looking for something
23:04 on the defensive side of the market,
23:07 one of that particular idea is ITC.
23:10 If you look at this particular stock,
23:12 stock has witnessed good amount of correction
23:14 from a high of 480.
23:16 That was registered a couple of backs.
23:17 It is back to level of 457 to 460 range today,
23:22 which is your 50-day exponential moving average.
23:26 And it has taken a very good support.
23:28 Definitely over last 15, 20 minutes,
23:31 we have seen a very sharp surge for this particular counter.
23:35 But I anticipate this stock to retrace back to level of 480
23:38 on upside.
23:39 Your risk-reward ratio remains favorable.
23:41 This is a very short-term trade,
23:43 and stop-loss for this stock would be at 450 on the downside.
23:48 Second idea is on a sales side.
23:50 So what we have observed is that stock of NTPC,
23:54 which has witnessed a very sharp rally
23:56 from almost like 180 levels to close to over 325 levels.
24:00 Today, it is breaking down below 20-day
24:04 exponential moving average.
24:05 And if you look at this particular counter,
24:07 whenever this particular thing has broken below 20 EMA,
24:10 it has usually moved closer to 50-day exponential moving average.
24:13 So my target for this particular stock continues to remain lower.
24:17 I believe that stock will move closer to 280 to 270 range on the downside.
24:23 At the same time, the stock was for the same,
24:26 should be kept around level of 312.
24:28 Today's close would be very crucial for this.
24:30 Absolutely.
24:31 Well, watching out for that.
24:33 But Nilesh, coming to you,
24:35 I believe one of your stocks is Sun Pharma.
24:37 Can you take us through that one?
24:39 Right, Agam.
24:40 So I have two by recommendation.
24:41 One is Sun Pharma.
24:42 This particular counter has shown quite a good strength in past few trading session.
24:47 And it is trading at all-time high levels, almost close to that.
24:50 So in this kind of volatile market, it is better to shift to defensive.
24:53 So Sun Pharma looks positive.
24:55 And we expect further upside move to continue on the upside.
24:58 The immediate target that comes around 1345.
25:00 Stop-loss should be placed below 1285.
25:02 Another buy idea that is MGL, Mahanagar Gas.
25:06 So this particular counter has shown good strength
25:08 and it is also trading at all-time high levels today.
25:11 It has hit a fresh all-time high.
25:12 So in spite of the weakness, these two counters, in fact, have outperformed.
25:16 So MGL, we expect further upside move to continue towards 1310.
25:20 And maybe beyond that, we can expect 1350 as well.
25:24 Stop-loss should be placed below 1255.
25:26 So MGL and Sun Pharma are the two buy recommendations from my side.
25:29 Okay, there you have it.
25:30 Those are trading ideas from both our experts.
25:33 Of course, when it comes to Sun Pharma,
25:35 we also have another fundamental development
25:37 and that is buying an additional and final stick in Israeli firm Taro.
25:43 About 21% being bought at a little less than 2900 crores.
25:47 And because of that, consequently,
25:50 Taro will be a wholly owned subsidiary by Sun Pharma
25:53 and it will also be delisted from the New York Stock Exchange.
25:56 Of course, we continue to keep a track on more updates from that one as well.
26:00 But on that note, we're out of time on the show.
26:02 So going to take a moment to thank both our experts,
26:04 Bhavin and Nilesh, for taking us through their views on the markets.
26:07 And with that, it's a wrap on The FNO Show.
26:09 Stay tuned to NET Profit for more news and updates.
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