- Global news & cues
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Niraj Shah and Tamanna Inamdar bring you all this and more as we head towards 'India Market Open'. #NDTVProfitLive
- Stocks to watch, trade setup
- F&O strategies
Samina Nalwala, Niraj Shah and Tamanna Inamdar bring you all this and more as we head towards 'India Market Open'. #NDTVProfitLive
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TVTranscript
00:00:00 Hello and welcome. This is India Market Open. Midweek and it seems like it might just be
00:00:24 another tough morning guys. I know that Implied Nifty is indicating to a positive start. We
00:00:30 had that yesterday. We rallied up all the way to 21,700 and fell right away. So I'm
00:00:35 not getting carried away by what I'm saying on Gift Nifty is what I'm saying.
00:00:39 I wish we had Netflix in India because those numbers would have given some bit of a respite
00:00:44 to India.
00:00:45 I wouldn't be surprised that a lot of that is, you know, India is a huge growth market
00:00:48 for Netflix despite being a premium option. But yes guys, looking like we might have a
00:00:56 bit of relief after brutal, brutal closing yesterday and that's where we're going to
00:01:01 keep the focus. Global queues are not really firing. Wall Street has been kind of mixed.
00:01:08 Nothing too much happening there because a lot of key data is still awaited. I think
00:01:12 Asia is important. Asia has also been all over the place. A week after the Bank of Japan
00:01:20 held its rates yesterday, they're also reacting to key data. But Asia overall mixed. So no
00:01:26 clear global queues is what I would say. The Hang Seng while it's doing very well, the
00:01:30 Nikkei down in the red. The focus really needs to be on what's happening in Indian markets
00:01:36 today and let's just recap quickly what kind of a close we had. We closed at the lowest
00:01:41 levels in over a month. A lot of the fall came in in the second half of trade. FII seemed
00:01:48 to be perhaps the culprit and that's what the fund flow numbers are also telling you.
00:01:54 It was the big boy, so to speak, which kept the markets really under pressure. Your HDFCs,
00:02:00 RIL, SBI, they are the ones that led the losses. And let's quickly just pull up what your fund
00:02:08 flows have been overnight to give us a sense of where the selling pressure was coming from.
00:02:13 And it's a fifth consecutive day of selling from FBIs, about 3000 odd crores. DIs were
00:02:20 buying but definitely not enough to hold that pain down. So clearly we've had a rough start,
00:02:27 perhaps a bit of recovery on the cards, guys. You could argue that could be the case. The
00:02:32 only thing is markets don't seem to be in this extreme fear zone from where, because
00:02:37 it's just been one day, so to say. Yes, last week was bad, but led predominantly by HDFC
00:02:42 Bank. Yesterday was the first day of, you could argue, capitulation because you saw
00:02:45 PSUs, you saw media and not just Zee, but Network 18 and a bunch of others. So not in
00:02:52 an extreme fear zone as yet as per quant indicators.
00:02:54 We're only 4% up from our record highs. We're only 4% down from our record highs, which
00:03:00 is actually not significant by a mile. We've all talked about a 5% to 10% correction, which
00:03:05 is put down as healthy. And we are in a tough month. And of course, I'll leave it back to
00:03:09 you about how we shouldn't be getting too concerned is what I feel.
00:03:13 No, the thing is, the interesting point made yesterday in a couple of notes, and two ways
00:03:17 to look at it, that for the Nifty and the Bank Nifty, the short term support levels
00:03:22 that people look at, the 50 day moving average, 100 day moving averages, are very close by.
00:03:26 So two ways to look at it, do we find support at those levels? Or if we break those, then
00:03:30 the next levels of support are way lower. So that is one problem area. Hopefully, that
00:03:36 is also a positive. A lot of attribution yesterday to the SEBI,
00:03:41 FPI norms. Frankly, I spoke to a clutch of people after that, on the global side as well,
00:03:46 or people who deal on sales with global clients. They said, we didn't even anticipate SEBI
00:03:51 to do anything. So yes, that newspaper report created a lot of brouhaha. But not too many
00:03:55 people are attributing the selling that happened to those FPI norms, because nobody anticipated
00:04:01 SEBI to extend them. So in the first place.
00:04:02 Can we just step back on Bank Nifty, Neeraj? We've maintained this for a while, saying
00:04:06 that banks have not performed as well as the rest of the market. In fact, most people were
00:04:11 of the opinion from the time we saw the rally between November to December, that banks needed
00:04:16 to lead the way up. Bank Nifty is up only 18%. The sell off, this of course, comes in
00:04:21 after a 7% cut that we've seen in the last few days of trade. So if you put that in perspective,
00:04:27 I don't even, I'm now beginning to think that the China trade is looking a little more attractive
00:04:33 for FIs, and that's where the selling is coming in from the spaces where FIs actually hold
00:04:38 focus. Been attractive for a while, Samina.
00:04:40 So I don't know if, yeah, I mean, China has looked attractive for a while.
00:04:45 But at some stage you give in, right? Yeah. So, I mean, my point being that, in
00:04:49 fact, early this month on the editor's cut, we did this thing of the EM China decoupling
00:04:55 as well, because Asia-X China funds are seeing a lot of flows. So not sure if that is the
00:04:59 case, but there are reasons for some of these pain to happen. One, a lot of sectors are
00:05:04 stretched and we're seeing, yesterday was the first sign of almost all stretch sectors
00:05:09 seeing that fall, right? PSUs have been a manic rally, railways, etc. And we saw what
00:05:13 happened yesterday in case in point. Good call on the solar stocks, Neeraj, but
00:05:18 your point being that a lot of what is run up, the froth is coming out of the market,
00:05:23 isn't it? Yesterday was the first sign of that and good
00:05:26 that it happens because you can't have, like we use that idiom, trees don't grow to the
00:05:30 skies. So IT is looking resilient. The last point on the banks, right? Sore spot. Yesterday,
00:05:36 if you see HDFC Bank, after four days of a fall, the whole of last week, yesterday, yet
00:05:40 another corrective move. Delivery based selling in HDFC Bank yesterday was five and a half
00:05:45 thousand crores. And so net net, you know where the culprit is, which is banks, but
00:05:51 under the shadow of banks yesterday, we saw a clutch of broader end of the spectrum stocks
00:05:55 going off and a lot of portfolios would have hurt yesterday.
00:05:58 I think all your mutual fund, a lot of large cap, passive funds, flexi cap funds that have
00:06:04 been overweight banks will be seeing a big cut. And honestly, for whatever it's worth,
00:06:09 that 1500 rupees HDFC looked attractive for a lot of people on the street at 1470. That
00:06:15 was the same word. We're now at 1430. The stock has fallen 15% in the last five days
00:06:21 from the date reported its earnings. 1665 was the high on HD, recent level that the
00:06:27 stock actually declined from. So big fall on that one. SBI as well did quite, hit quite
00:06:33 badly. Let's not forget that Bank Nifty contributes about 35% of Nifty. So if you have
00:06:39 to have Nifty holding itself together, Bank Nifty must and has to lend its support. So
00:06:45 if your banks are under pressure, Bank Nifty contributes 35%. Nifty itself will find it
00:06:51 hard and will struggle at higher levels where the selling is coming in. Apart from that,
00:06:56 HDFC Bank itself, Neeraj, you can come in on this one, contributes about 30% to Bank
00:07:00 Nifty. ICSE Bank was the only one that went home with marginal gains. That is worth a
00:07:07 mention. Everything else was under pressure. IBank was up about 2%, being one of the top
00:07:11 gainers on the Nifty index as well. But very obviously, the sentiment of Bank Nifty is
00:07:17 weighing on the index. You cannot be surprised. 35%, like I said, is the weightage that Bank
00:07:22 Nifty has. And also HDFC Bank's correction may continue today. So if you look at the
00:07:28 ADR, there was some more selling on the New York Stock Exchange. Don't know what levels
00:07:32 are we watching out for on HDFC Bank anymore. But for now, it still doesn't seem like it's
00:07:37 finding a base or a bottom in that sense.
00:07:39 Just before we move to stocks, the point yesterday also seemed to be that rate sensitives took
00:07:43 it on the chin because aside of banks and only ICSE Bank went with the green, real estate,
00:07:49 that index didn't have a single stock. We have this contributors chart or the percentage
00:07:54 move chart and the Nifty Realty, if we pull that up just before we get to specific stocks,
00:07:58 you will see a sea of red with, yes, prestige led the way, but everything from a prestige
00:08:04 to a macro tech to a DLF to Oberoi.
00:08:06 Oberoi was the big hit.
00:08:09 Everything right on your screen. And that just shows the pain yesterday in rate sensitives.
00:08:13 So it's also about...
00:08:14 It's also about...
00:08:15 ...with real estate, to be honest, actually numbers are looking great. While we did see
00:08:19 that report in December, which looked amazing in terms of real estate sales. Everyone that
00:08:23 we've talked to has implied and indicated that cost of production or cost of building
00:08:27 is still very expensive. So while numbers on the face of it look like there could be
00:08:31 a recovery, I'm not sure how much of that is getting ahead of itself.
00:08:35 Yeah.
00:08:36 No, the only point I was making on real estate before I hand it back to you, Smeena, on stocks
00:08:41 is that look at Oberoi numbers. And, you know, I'll talk about Purvankara for a bit right
00:08:46 now. It's now the reality check that comes in on the kind of run up we've seen on real
00:08:52 estate. And I think company by company will have to be seen very closely on whether they're
00:08:57 delivering on what was promised. But I think the big, big story today undoubtedly is access.
00:09:03 And that might end up being, you know, sort of a relief over there, isn't it?
00:09:09 I don't know what a relief for now. The stock might be under some pressure, but we'll have
00:09:13 to wait and see. Numbers are being viewed interestingly. So while brokerages are generally
00:09:18 retaining their call on the counter, the likes of a city have actually reduced their price
00:09:23 target. So just to take you through what we made of those numbers, largely a mixed bag.
00:09:28 So in terms of the way of reading it, profitability, tied in line with expectations, you had not
00:09:36 too much disappointment. Deposit growth has been impressive. But the concern on deposit
00:09:40 growth is that it's led by non-retail. Now, that is chunky and not dependable. If you
00:09:45 want to bet on great deposit growth, you've got to have it coming in from retail, which
00:09:50 Axis Bank this quarter hasn't seen. NIMS are down, but again, not worth mentioning because
00:09:55 that's an industry-wide average. There's nothing exceptional in terms of Axis Bank's NIMS either.
00:10:02 Capital advocacy ratio now stands at 14% versus industry average, which is late teens. Does
00:10:08 this mean there could be a fundraising plan around the corner for Axis Bank? It's anybody's
00:10:12 guess. But that number is something that we have noticed at 14% capital advocacy doesn't
00:10:18 seem too comfortable for Axis Bank. Provisioning was higher than expected. AIF provisioning
00:10:25 was to the tune of 200 crores. So again, this is what we've seen from HDFC to Kotak to Axis
00:10:32 providing for that AIF piece, about 200 odd crores on this one. The stock has been one
00:10:37 of the best performing banking names in the year. It's up 18% in the last one year and
00:10:43 I'm calling it one of the best performing banking names. So what you may see is a little
00:10:47 bit of the gains getting petered off on Axis Bank. Brokerages, like I said, have maintained
00:10:52 their calls, but they've reduced their target price. Citi specifically has actually lowered
00:10:56 its target price on Axis Bank. They say, well, the numbers were slightly disappointing. The
00:11:02 core trend remains intact for Axis Bank. So that's Axis. Havils as well, not very impressive
00:11:10 numbers. The stock may see some selling pressure in early hours of trade. Revenue has come
00:11:15 up about 6.9% versus our expectation. Margins are also up marginally. Actually, your EBITDA
00:11:24 is up and margins have declined to 9.8% versus 10.26%. There's been an increase in ad spends.
00:11:31 Festive demand was below what the management internally had set out for itself. So some
00:11:35 disappointment on Havils is what we are seeing. What I really want to talk about is United
00:11:40 Spirits. Those numbers were actually fantastic to say the least. Good set of numbers. Brokerages
00:11:46 are seeming pleased. The counter could see some activity as well. Revenue was up 5.3%.
00:11:51 EBITDA was up 30.8%. So that is one number that the street will be getting excited about.
00:11:59 Margins have come in almost 300 basis points high. They've come in from 13.38 to 16.2.
00:12:06 The reason is that United Spirits is focusing on premiumization and their high-end or more
00:12:12 expensive alcohol is the focus of the business and that is what's actually kicking in the
00:12:17 margins. So high margin business, lower revenue, but margins are looking very, very impressive.
00:12:23 Net profit has also come in higher. Conscious trend, I believe, consciously taken call by
00:12:28 United Spirits to focus on premiumization. I think this has really been the word on the
00:12:31 street. It's luxury versus not so luxury in that sense. Rural versus urban argument is
00:12:37 done with. The street is focusing on luxury. Those numbers are for everyone to see where
00:12:41 United Spirits has pulled it, pulled it well. Great revenue, great margins and a good festive
00:12:47 season all in all.
00:12:48 Yeah, just to add just that one piece on United Spirits, rather two things. One, they have
00:12:54 been on record saying that they want to get various forms of premium alcohol, tequilas,
00:12:58 etc. into India. So one, that might be playing out. Two, the interesting thing is, and I
00:13:03 think people are waiting for that on the call today on United Spirits, that the nine-month
00:13:07 EBITDA margin for United Spirits is around 16.2% or thereabouts. In the Q2 call, they
00:13:14 had guided for FY24 margins of 15%. So they're already at 16.2.
00:13:20 They've overshot.
00:13:21 Overshot. And if the ENA pressures are not too severe and if they guide that, yes, we
00:13:26 might actually do better than 15%, maybe 16, maybe higher, then that might actually be
00:13:31 a trigger for the stock. So maybe the street preempts that today on open and then wait
00:13:35 for the con call and do more. So I think that margin number that Samina is talking about,
00:13:39 very, very crucial.
00:13:40 Very critical. And coming in a segment that the business is bullish on. And I guess as
00:13:45 a nation as well. So cheers to United Spirit. Definitely in that entire space, you're seeing
00:13:53 consumables in the luxury segment, you know, raise toast. Let's talk about a few others
00:13:59 because there are so many numbers that have been out and frankly, we're not able to do
00:14:03 justice to it in a short period of time, but some that stand out. Purvankara is one that
00:14:08 I will talk about simply because of the focus in real estate and those numbers in the face
00:14:14 of it look good, robust with an improvement in margins. Margins have gone up to about
00:14:20 34, 35% versus 28. Revenues are up 46%. Look at that EBITDA number, about 79% up. Board
00:14:29 has also approved an interim dividend. There has been a change in their realisation mix,
00:14:35 in their product mix where their affordable housing segment and that product has seen
00:14:43 a little less realisation, but clearly not too much of an impact to the bottom line,
00:14:49 so to speak. KEI Industries is another one. The whole cable space has been under a lot
00:14:55 of focus and on the face of it, these numbers are not too bad. Revenues are up 15%, EBITDA
00:15:01 up 19%. Margins have improved very, very marginally, but better than the Bloomberg estimate by
00:15:10 a tad. Net profits are also up by about 17%. So largely, I would say in line, also piece
00:15:17 of news with KEI, they've approved a voluntary liquidation of their Australia unit. So that's
00:15:23 one to watch. Lupin, just the other one on my list, they've received a tentative approval
00:15:30 for a drug called Rivaroxibin, which is essentially to reduce stroke. It has a generic equivalent
00:15:38 of a product that Jensen Pharmaceuticals makes and a big market share for this product in
00:15:46 the US, about $8,249 million. It's going to be manufactured at the Pitampur facility of
00:15:53 the company. So these are a few and Pharma anyway has been seeing a defensive play. But
00:15:59 anything that you're spotting this morning, Neeraj? Yeah, so a few others. So Airtel,
00:16:04 a lot of talk around the prepayment of a billion dollars of airwave dues. I just thought the
00:16:10 MS Note put this into perspective very well and I'm just therefore just using that note
00:16:14 to take away as the key for Airtel. Don't get too excited. They say that we believe
00:16:19 that this will be positive on the NPV basis on the company over the tenor of the spectrum.
00:16:23 Remember, Airtel has done this twice already in the last 12 to 18 months. But they say
00:16:26 that assuming the yield on cash of 6 to 7%, this prepayment could help earnings by 1%
00:16:33 for FY25. Remember, it doesn't do too much to the net debt because it's cash accruals
00:16:38 and cash, which has been used to pay this debt. So net debt doesn't get changed in any
00:16:42 effective fashion. So don't get too excited on Airtel because of this news. That's the
00:16:46 first piece. The stock may still react. I really doubt it will, but it may still react.
00:16:50 Funny things happen. The second one, and we're going to be talking about oil and gas today
00:16:55 on the editor's card, but on Q, it's just coincidental that MGL has delivered what it
00:17:00 has delivered. And I think the Citi Note put this into perspective so well. So here's what
00:17:05 they say. They maintain a buy, which is fine at the target price of 1480 or thereabouts.
00:17:10 The takeaways, solid Q3, EBITDA was up 75% YOY, 20% ahead of estimates. EBITDA being
00:17:18 up 20% ahead of estimates, big thing. The beaten margins and the robust volume growth
00:17:23 effectively helped the EBITDA performance, naturally so. And the nine-month EPS is at
00:17:27 104 versus FY23 full-year EPS of 80 rupees per share. More importantly, the piece that
00:17:34 they've written about volumes at MGL, they say the volumes at 3.67 mm SCMD were led by
00:17:41 a 6% growth in both CNG and domestic PNG, while industrial and commercial volumes also
00:17:46 grew about 16%. Now, CNG growth in weight terms was even more impressive at 8% because
00:17:52 this is a relevant metric, of course, for MGL, considering that the gas consumed by
00:17:58 MGL is richer in nature. They say that margins for MGL could remain supported in Q4, given
00:18:06 the correction in spot LNG prices and MGL securing other gas supplies. Now, yesterday,
00:18:12 we've seen Qatar and India sign a long-term agreement as well for supply of LNG. So things
00:18:18 are improving on this front. It might be a tailwind for almost all companies within this
00:18:22 pocket. Yesterday, we saw Petronet, LNG, Aegis Logistics move up on this piece of news. MGL
00:18:27 could well be another beneficiary. Last but not the least, maybe we spoke about Pidilite.
00:18:32 Those numbers seem very, very impressive. But JSW Energy was the other one where the
00:18:36 numbers seemed a bit off. For an expensive stock, it's imperative for it to deliver quarter
00:18:40 after quarter. It's not quite done that this quarter somehow. Margins were okay. The PAT
00:18:45 performance left a bit to be desired. Top-line numbers left a bit to be desired. Maybe, just
00:18:51 maybe, a bit of a corrective move after the 5% cut yesterday. So that's to be watched
00:18:55 out for as well. Jeffries is not on JSW Energy though, just
00:18:57 to add that as not too negative. They rated it a buy with a price target of 600 rupees
00:19:04 and are quite kicked about the higher merchant sales. They see power demand recovery also
00:19:10 moving in. So we'll have to wait and see what happens with JSW Energy.
00:19:14 Yeah, that would, sorry, just, I mean, that would be the call for this year because, you
00:19:19 know, Prashant Jain, the ex-MD of JSW Energy has gone on record that 2024 will be a year
00:19:24 of power deficits in the country. So you'll probably see merchant power sales for all
00:19:28 these companies do really well. But it's just such an expensive stock. Let's see what the
00:19:33 verdict is today. I think Pidlite, quick mention of Pidlite
00:19:36 and Sona BLW, again, two stocks that have managed to pull through very strong numbers.
00:19:40 Neeraj alluded to Pidlite. I'll just quickly take you through what those numbers are. They
00:19:44 are a consolidated not-profit, came in at 511. That's up 66% year on year. Revenue
00:19:51 from operations was up 4.4%. Margins, and I think that is what is shocking to say the
00:19:57 least, have improved by 776 basis points YOY in the quarter. Revenue was aided by strong
00:20:04 volume growth of 10% across categories and geographies. Growth was broad-based across
00:20:10 consumer and bazaar segment and business to business as well. Both segments have reported
00:20:15 double digit earnings. So very, very strong. I'm pretty certain that the stock will see
00:20:20 a big, big bump up in early hours of trade. Another quick one, definitely worth a mention
00:20:24 is Sona BLW. Again, fantastic numbers. Management has also indicated that this has been one
00:20:30 of its best quarters ever. Very, very healthy order book. But let's take you through what
00:20:34 those numbers are. Revenue is at 776 crores, up 13%. EBITDA has come in at 227 crores,
00:20:42 up 22%. Margins have again improved substantially to come in at 29.26 versus 27.15. And your
00:20:49 net profit also seems like a very impressive number, up 25%. So all in all, great set of
00:20:54 numbers. Jefferies retains a buy, price target of 750. And the company, of course, has an
00:21:01 order book which at 24,000 crores, which is the highest in the history of Sona BLW. All
00:21:06 geographies are recovering. It could be good going for this one too, guys.
00:21:09 Yeah. So before we move on to Editor's Cut, and I think we need to focus on access. That's
00:21:14 the big story this morning as well, to see what those numbers are. I just want to bring
00:21:18 on everyone's radar the results which are going to come today and which you need to
00:21:23 watch out for. I think Otto's two wheelers will definitely be in focus. Bajaj TVS numbers
00:21:28 are expected to be decent this quarter. You're seeing that pick up in two wheelers pan out.
00:21:34 There's a positive note out on Hero as well. Indian Oil, I would mark out a bit of disappointment
00:21:40 expected there. But since BFSI and banking is in focus, watch out for Canara and IOB
00:21:47 as well. So those are some of the stocks and sectors which could fire today.
00:21:51 Tech Mahindra too, I think that's going to be the big one.
00:21:54 Postmarket hours could be interesting for that one as well. Okay. The positions on Tech
00:21:58 Mahindra, I must say, on the F&O side have been interesting to say the least. Resilient
00:22:02 stock but has seen some shorts coming up. But it's about time that we take the focus
00:22:06 on to the Editor's Cut. And Alex, what do we have today?
00:22:09 It's going to be a power packed segment, I think, Neeraj. So let me very quickly set
00:22:14 it up so that my colleagues can knock it out of the park. The first one has to be about
00:22:17 the banking pack. You've seen earnings from all of the private sector banks in. And in
00:22:21 fact, it can be said that this entire sell-off for the last five sessions or so has been
00:22:26 led by the banking pack, HDFC Bank first, but that became more broad based. The reasons
00:22:31 why are what we're talking about at the start and whether or not this is a problem primarily
00:22:36 with HDFC Bank or is it something that you can see in the signs of the earnings across
00:22:40 the board as well. The second aspect is the delivery stats because this is going to give
00:22:44 you a perspective on how people are trading the stock as well. Yesterday's picture, of
00:22:49 course, HDFC Bank delivery has been high, but what is the picture with the rest of the
00:22:53 banks? And finally, we'll also talk about oil and gas. There was a sharp crack in quite
00:22:58 a few of these stocks, particularly the city – no, not the city gas distributors, but
00:23:02 for the oil companies, Gale as well as ONGC, there was a crack. The question is where do
00:23:07 we go from here, where do valuations stand at right now and what are the key triggers?
00:23:11 Hopefully I've set it up well. Let's start, Vishy, with you. You've looked at the key
00:23:15 numbers. Is it a trend across the board? What's playing out?
00:23:19 Vishal Tripathi So, a lot of it is playing out in the large
00:23:21 private banking space at this point in time. What is happening is your HDFC Bank, Axis,
00:23:26 ICICI, Kotak, IndusInd, all these big banks have come out with their numbers. What is
00:23:31 coming out in the commentary is that people are not really excited with what they're
00:23:36 hearing from the management. Essentially, the guidance that these private bank leaders
00:23:40 are giving, it's not really adding much value in terms of future growth, the expectations
00:23:47 for future growth. One thing that is specifically interesting in this cycle is that the better
00:23:55 asset quality, that edge that the private banks had, that seems to be going away because
00:23:59 your public sector banks have already caught up with most of the asset quality gap that
00:24:04 they had the private banks. So, that has been priced in. So, what's left? Well, growth.
00:24:08 And that growth is not looking so great. So, if you look at where large banks are guiding
00:24:14 their credit for the year, most of the large banks have pointed out that eventually your
00:24:19 deposit growth and advances growth are going to converge. What does that mean? Convergence,
00:24:24 either your deposit growth picks up materially or your advances growth comes down. Deposit
00:24:29 growth already in the system is at close to 18% year on year for these large banks. That's
00:24:34 about 600 bps higher than where the rest of the system, 500 to 600 basis points higher
00:24:38 than the rest of the system is. So, room for it to go up further seems very limited. The
00:24:42 only other alternative is that credit growth starts coming down and starts matching where
00:24:47 deposit growth is because you have to maintain that credit deposit ratio. The regulator seems
00:24:52 to be uncomfortable with the way it's panning out in the system. And of course, that leads
00:24:56 to unnecessary increase in cost of funds. So, that's where the advances growth side
00:25:02 is. The other thing is that margins are looking like they are going to compress for longer
00:25:07 than previously expected. The expectation was that by the first quarter of FY25, you
00:25:11 will see something, some sort of stabilization. In fact, some better banks may see improvement.
00:25:17 That doesn't seem likely because if the deposit repricing is still pending, then your margin
00:25:20 compression is going to last longer. And the last bit is on the OPEC side. So, there again
00:25:25 a lot of banks are talking about branch network, they want to increase the footprint. Does
00:25:30 that necessarily lead to better deposit growth or better business growth? The jury is still
00:25:35 out there because till last year, everybody was talking about how amazing digital is and
00:25:39 that's going to push up business. Now, they are back to the physical branch model. It's
00:25:44 not clear whether the trade-off of higher expenses for the short term and then maybe
00:25:49 better business later is going to play out yet. The expectation is that at least till
00:25:55 September of 2024, you are going to see elevated expenses for major private banks.
00:26:00 Two questions on the asset quality. There is that one provision number for AIFs that
00:26:04 stood out across the board, barring one, I think.
00:26:07 Yes. So, actually the one that had the highest number on AIF, which was ICICI bank, is luckily
00:26:13 the only one that did not see that big of a sell-off because it sort of performed better
00:26:17 than the others. Most other banks are reporting 150 to 200 crore between that in terms of
00:26:22 provisions. ICICI bank did not see any of that. They reported a 620 crore number, which
00:26:27 was significantly higher. What these private banks are, however, saying is that none of
00:26:31 this is because the assets are bad. This is because the regulation have changed. So, we
00:26:36 have to provide for it. But it's unlikely that we are going to actually report losses
00:26:40 on those provisions. So, eventually as they unwind those investments, that money comes
00:26:44 back to the profit. Okay. And the last from my side, I am sure
00:26:47 that gentlemen have more to add, but the last from my side has to do with the capital adequacy.
00:26:52 We saw access come off very substantially. Yes.
00:26:55 Of course, that has to do with risk waste. Does that mean that banks will have to raise
00:26:59 in the next couple of quarters? So far, the commentary has been that we do
00:27:02 not need more capital. We are still above the regulatory minimum. So, and of course,
00:27:07 that is also feeding into the fear that growth may not be so sharp because if you don't need
00:27:11 to raise capital, obviously, your growth is going to come up.
00:27:13 Which is an important point. Let's talk about delivery. Anything to add? Okay. So, let's
00:27:18 talk about delivery and that has stood out as very high over the course of last few trading
00:27:23 sessions. Sure.
00:27:24 What was yesterday's number? So, I will start off with the Bank Nifty which
00:27:26 has corrected about 7.5% from the top from its lifetime highs and in the same period,
00:27:32 we have seen a correction largely on account of HDFC Bank. 7.5% is not a very large number.
00:27:38 At 10% even, it is not a technical bear market. It comes in at around 20%. That said, at 10%,
00:27:45 there will be a lot more caution as far as the banking index is concerned. On account
00:27:50 of HDFC, we have seen a 15% correction from its earnings, about 30,000 crores of delivery-based
00:27:56 buying in HDFC Bank since the day it came out with its earnings, including 5,500 crores
00:28:02 worth of selling, delivery-based selling yesterday. So, it is substantial. That's nearly $3.5
00:28:07 billion. And just if, you know, this is a very rough way of comparing, but since over
00:28:14 the past five days, FII selling has been worth around 28,000 crores. Of course, this is not
00:28:21 a like-to-like comparison because in HDFC, you don't just have FII sellers. We also have
00:28:26 domestic institutions and, you know, retail participation as well. That said, in terms
00:28:31 of the numbers yesterday, we are looking at substantially higher delivery numbers for
00:28:37 all the banks. So, HDFC consistently at 65% delivery number coming through, but even for
00:28:44 something like an ICICI bank, of course, that was the only private sector bank which advanced.
00:28:49 But say for that, well, we had about anywhere between 55% to 65% delivery numbers coming
00:28:56 yesterday as well, which means that should we see more selling coming through, there's
00:29:02 a likelihood that the bank nifty, not immediately, but over the span of the next few weeks, could
00:29:07 correct as much as 10% from the top.
00:29:09 Understood. Neeraj, you want to add anything to that or you want to jump straight to the…
00:29:13 No, this is comprehensive enough. So, let's move on to oil and gas.
00:29:15 Let's talk about oil and gas and I think the basic question is where do we go from
00:29:19 here and what are the key triggers?
00:29:20 Answer is who knows, but be that as it may, we just thought we'll take a look at the
00:29:26 valuations a little bit, right? So, the cue also came from the fact that yesterday, there
00:29:31 was this LNG deal signed between Qatar and India and Petronet and some of the others
00:29:35 did very well. Could OMCs and some of the others follow suit? Because city gas distributors
00:29:40 have done well. I'll come to them at the end. I'll start off with ONGC and Oil India, the
00:29:45 upstream players. Now, the valuations currently FY25 basis, 0.8 to 1, actually Oil India is
00:29:53 slightly cheaper than ONGC, but 0.8 to 1 times, 1 FY25 expected price to book. We moved to
00:30:00 FY25. Everybody's, actually some people are FY26 also, but let's avoid that, FY25, right?
00:30:06 This is about 20 to 40 odd percent below mean depending on what's the time period that you
00:30:13 take and depending on what estimates do you take, people assigned to these stocks per
00:30:18 se generally and they are trading at an attractive dividend yield of about 6%. Now, under any
00:30:24 market, no matter how strong it is, 6% dividend yield is somewhere you, where PSUC buying.
00:30:30 It's traditionally used to be the sweet spot for RECPSC as you guys would remember. 6%
00:30:34 dividend yield, okay, people would be say, "Hey, this is great." So, ONGC, Oil India
00:30:38 are now trading there and unlike the OMCs, which have this hangover of marketing margin
00:30:44 let gains at part whatever, if the price cuts that come in, upstream doesn't have that problem.
00:30:49 Sure, in the past, they've been saddled with putting in some money where the government
00:30:53 might need it, but let's leave that aside for now. So, the valuations, the dividend
00:30:57 yield, etc., not too bad. Therefore, could they see a bounce back? Maybe. The other one
00:31:01 is Gale. You know, Petronet and some of the others have rallied because of this drop in
00:31:06 LNG prices. Gale hasn't. Gale is a beneficiary out there too. So, you just compare what Gale
00:31:11 has done versus what some of the others have done. Gale has hardly had a move. Now, also
00:31:16 in terms of valuations, at F5, the question that I ask is for Gale, at F525 of about 12
00:31:23 by 26, 10 P, is Gale really expensive and if not, what is ailing Gale? You know, that's
00:31:30 the question that comes to mind. Not too much. The recent performance has been pretty decent.
00:31:35 This cut in LNG prices could help Gale. So, that's the other one to focus on. City Gas
00:31:40 Distributors, MGL today, the results as all of us have seen, would probably work for the
00:31:45 stock, right, today. But the larger point is that lower LNG prices at large auger very
00:31:52 well for some of these businesses and LNG prices have dropped, have come off about 40-45%.
00:31:59 The back of the envelope calculations that brokerages have done is that a 50% drop in
00:32:03 LNG prices would mean nearly a 25 to 30% expansion in earnings for these companies. Have we seen
00:32:11 that kind of a price rise? We haven't. So, could we see that? Who knows? But the market
00:32:15 is in a corrective move. So, it's stupid to make a bullish argument right now. But you
00:32:18 know, there is an argument to be made here. And lastly, Petronet. I mean, yesterday, you
00:32:23 know, it's a beneficiary of lower spot LNG prices. And yesterday, there's this deal sign,
00:32:27 the stock was up 5%. Could it do more? Maybe. Could allied places like Aegis Logistics,
00:32:32 for example, do more because they are large in LNG terminals. So, you know, all of those
00:32:36 come into play, primarily because the stocks didn't rally too much and there has been a
00:32:41 bit of a correction. Fantastic. Just a quick note on an S&P Global note
00:32:45 which came out recently in the last four or five days. And they were talking about
00:32:48 capacities for upstream oil companies. And they have mentioned that while they have promised
00:32:55 a certain capacity, S&P Global believes that those capacities will not be fully on stream
00:33:01 at least this year, which means there could in fact be a supply constraint. And that could
00:33:06 in fact also lead to higher prices as far as their products are concerned, which will
00:33:11 eventually could land up benefiting these companies themselves. So, that's another point
00:33:15 to perhaps ponder upon. Yeah, clearly. All right. So, I think we've kind of had a comprehensive
00:33:20 conversation about both the banking space as well as oil and gas. Let us know what you
00:33:24 think in the comment section on any one of our social media platforms. Meanwhile, we
00:33:28 have to set you up for the day's trade and there's lots to talk about on the F&O side
00:33:32 as well. So, do stay tuned. We'll be back before you know it.
00:33:35 Thanks for joining us. We'll be back shortly.
00:33:42 Thanks, everyone.
00:33:50 Thanks, everyone.
00:33:58 Thanks, everyone.
00:34:05 Thanks, everyone.
00:34:13 Thanks, everyone.
00:34:22 Thanks, everyone.
00:34:32 Thanks, everyone.
00:34:47 Thanks, everyone.
00:35:02 Thanks, everyone.
00:35:17 Thanks, everyone.
00:35:37 Thanks, everyone.
00:35:57 Thanks, everyone.
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00:36:37 Thanks, everyone.
00:36:57 Thanks, everyone.
00:37:17 Thanks, everyone.
00:37:37 Welcome back. We're gearing up for trade this morning. It looks like it's going to be a
00:37:45 flat to higher start and early trade. But first up, a quick check on the top headlines
00:37:49 that we track. Banking stocks witness a fresh wave of selling, drag the rest of the markets
00:37:54 down and wipe out 8.5 lakh crores. Axis Bank reports over 9% rise in overall income but
00:38:01 expenses eat into profits. And Zee Entertainment loses a third of its value as institutions
00:38:07 dumb the stock after merger talks collapse. Bharti Airtel will be in focus after the company
00:38:12 prepays 8,325 crore rupees towards Spectrum feed use. And US equities continue to gain.
00:38:19 S&P 500 notches third straight day in a row to close at a record high. While the Nasdaq
00:38:25 also climbs for a tenth of a percent. Dow, on the other hand, falls a quarter of a percent.
00:38:31 Well, those are the top headlines. But it's over to Agam as always for the F&O Action.
00:38:35 Agam, it's looking like an exciting morning.
00:38:38 Well, one can only hope based on what we've seen because yesterday was a terrible disappointment
00:38:43 as far as bulls were concerned. And well, we saw how things spanned out. So let's start
00:38:49 off with the benchmarks. Of course, the Nifty did come off substantially. It did come off
00:38:54 around 1.5%. This, of course, is January futures. And naturally, we will have unwinding because
00:38:59 we are now in expiry weeks. So let's pull up the February futures too. Open interest
00:39:03 declined by to the tune of about 157,000 shares. But even in February futures, the open interest
00:39:10 did not go up as much, which means on a net basis, we have seen a decline in OI. That
00:39:16 also means that a lot of traders still are not very confident of putting their bets as
00:39:21 far as the benchmarks go, at least as far as the Nifty is concerned. Talking about the
00:39:25 Bank Nifty futures, remember that the Bank Nifty futures is also going at a discount.
00:39:30 It came off by 2.25% yesterday. And open interest, very little change there, about 127,000 contracts
00:39:38 as far as the February futures go. And that's where, once again, we haven't had as much
00:39:43 interest building in. Of course, we still have two very long sessions perhaps as far
00:39:49 as the expiry is concerned. So unwinding overall on a net basis coming in there as well. But
00:39:54 now, Bank Nifty is at around 45,000. It's kind of a psychological zone. And if we do
00:40:00 break this, you never know where the Bank Nifty could go. Let's talk about the options
00:40:05 market then. And on expected lines, we saw a lot of writing in terms of calls and a lot
00:40:12 of unwinding in terms of puts. If you look at this from a writer's point of view, and
00:40:19 well, the 22,000 mark is completely out of the picture. And in fact, we are now seeing
00:40:25 21, 700, 21, 800 also being taken completely out of the picture. At the moment, things
00:40:31 do seem bearish, but it doesn't mean that we couldn't see a bout of short covering and
00:40:36 perhaps consequent consolidation coming through after that. Of course, this is as far as your
00:40:42 OI distribution picture is concerned as I was talking to you about earlier. But now
00:40:46 the lower end of the spectrum is now 21,000 based on maximum open interest in puts. And
00:40:53 that's as far as your Nifty is concerned how things are placed. The question really is
00:40:58 what do you do with this data? And can you in fact take advantage of the bout of the
00:41:04 increase in volatility that you've seen of late? Let's find out. Let's get an expert
00:41:08 opinion. We have Amit Goel, a market expert who's joining us on the show. Amit, good
00:41:13 morning and thanks so much for taking the time out. Let's start off with your view on
00:41:17 the benchmarks. How are you placed here? Good morning, Agam. Good morning, everyone.
00:41:22 Yeah, yesterday was a bad day for the books. We have had an exceptional sell off. And the
00:41:29 interesting point to note here is this is not a global sell off. Whatever we have had
00:41:33 is more localized, more event driven, news driven. It could be HDFC Bank, it could be
00:41:40 Zee Entertainment, and it could be some bit of profit booking in the PSU stocks. So while
00:41:47 there has been a sharp bout of selling, that has already been done. Now, the next step
00:41:54 of action would be what next from here? So my intention or my reading of the chart is
00:42:01 we are in proper range now with the ATM PCR being close to 0.9, which indicates a more
00:42:09 balanced approach for the next week. And overall sentiment has turned a little bearish because
00:42:16 on the charts, it's lower high, lower low formation. So while positionally speaking,
00:42:22 we would look to sell on rise, but from a short window of a week or so as a trader,
00:42:29 one could look at set up a range bound trade or consolidation trade given that implied
00:42:36 volatilities are elevated right now. So I feel that one could approach Nifty from a
00:42:44 non-directional perspective for the next week if the market settles around 21,200, 21,150
00:42:52 in the first one hour or so. Speaking about Bank Nifty, that is the culprit. That is the
00:43:00 more weaker and it's quite obvious. Interesting point to note is Bank Nifty has already given
00:43:06 up all the December gains, all the January gains that we have made in the last two months
00:43:12 and it is now trading at the low of the starting of December at 45,000. This also happens to
00:43:20 be a very important psychological mark. So there is a silver lining here that maybe the
00:43:26 bout of selling is probably done here and we might find some bit of support at around
00:43:33 44,500 and possibly 44,000 where the weekly supertrend lies.
00:43:39 So based on that, Amit, how are you placed as far as the Nifty is concerned? How are
00:43:44 you strategizing? What structures are you playing on it?
00:43:47 The structure is very simple. What I would look to do is I would not chase the open either
00:43:52 on the upside or the downside. If the market settles in the range of 21,200 and 150, I
00:44:00 have identified a range of 21,500 to 600 on the upside and 20,750 on the downside and
00:44:08 initiate an iron condor for the next week's expiry. Remember that the budget is on the
00:44:14 expiry date, which is I think on the 1st of February, which happens to be Thursday. So
00:44:20 we could take benefit of this consolidation expectation and set up an iron condor by selling
00:44:26 the 20,700 put and the 21,600 call on the upside. Obviously, this is a short strangle
00:44:34 and we would want to protect our exposure and cover it up with buying the hedges at
00:44:40 22,000 a call and 20,300 put. Right. Amit, I believe you also have a view
00:44:57 on Apollo Hospitals. Can you take us through that one?
00:45:02 Apollo Hospitals chart and its price action yesterday, while it was news driven and it
00:45:08 opened with a very sharp gap up, it gave away the entire gains of the day and the structure
00:45:15 that it has formed at an overbought level is that of a counterattack pattern and it
00:45:22 is a fairly bearish structure. So what I would like to initiate here is if Apollo Hospital
00:45:29 comes up a little bit at say 60 to 100 levels, I would like to initiate a bear call spread,
00:45:37 which is a bearish strategy given the high levels of implied volatility and I would like
00:45:43 to sell the 6,300 call of February expiry and buy the hedge at 6,500 call. The risk
00:45:51 here is if the price closes above 6,300 levels on closing basis on the hourly time frame,
00:45:59 I would close the trade and probably incur a loss of 2000. But if the trade works in
00:46:05 favour as a mean reversion setup, we are looking at a profit of about 9,000 rupees.
00:46:12 Amit, we will leave it at that. Thanks so much for taking the time out and being with
00:46:16 us today and giving us those thoughts, but need to address those flashes on your screen.
00:46:21 Now, yesterday we discussed this in a trade setup that none extension was anticipated
00:46:26 but yesterday a few stories had spoken about very large numbers that could be impacted
00:46:33 as a result of non-extension of the FPI window that was spoken about in a story yesterday
00:46:39 in one of the publications. Now, as per sources, the estimates were vastly exaggerated in conversation
00:46:47 yesterday. We will get in Sajid in a moment from now, but sources are saying that, excuse
00:46:54 me, sources are saying that FPIs are required to provide enhanced disclosures expected to
00:46:59 be significantly less than anticipated. So, one, the quantum of disclosures not very high.
00:47:05 Certain categories of investors are exempted as well. Pooled investments exempted as well.
00:47:13 So, if you look at a clutch of these moves, it seems that the impact, if any, in the minds
00:47:19 of some of the investors that may have been as well was estimated to be vastly higher
00:47:26 than what the actual numbers could be as well and a clutch of FPI categories anyway is exempt.
00:47:35 So, therefore, there is, if there was fear yesterday and to be honest, a few people that
00:47:42 we spoke to said that it may be coincidental. It was not necessarily the trigger, but even
00:47:47 if you assume that that could have been one of the triggers that led to the selling and
00:47:52 the fear around markets, that need not necessarily be the actual case. Guys, this is a good disclosure
00:48:00 and we will get in Sajid because Sajid has put out this piece as a source is saying.
00:48:03 We will get in Sajid to talk about this more, but even if this was the overarching reason,
00:48:09 the fears are not as much as was believed to be the case yesterday.
00:48:14 I think the key line also while Sajid is micing up is that there is no immediate deadline
00:48:21 or cliff for FPIs to liquidate any holdings and if you recall yesterday while we were
00:48:26 doing the closing show, Gurmeet Chadha was talking about this concern that came in. That
00:48:33 could have been one of the reasons we saw an enhanced amount of selling towards the
00:48:39 close of markets where that concern was coming in about having to liquidate some positions
00:48:47 before the 1st of Feb. So, an important piece of news there which is coming in that enhanced
00:48:54 disclosure requirement is not as bad as it was thought, significantly less than estimated
00:49:00 in fact. Sajid here in the studios with us. Sajid, set the context of why this is such
00:49:05 an important iteration coming in.
00:49:07 So, there was a consultation paper with respect to ultimate beneficial ownership. The genesis
00:49:16 was prior to the Hindenburg that SEBI was trying to figure out who are the FPIs who
00:49:22 are investing in the Indian market and whether there are concentrated risks which is there
00:49:28 and with that respect there was a consultation paper which was put in place which basically
00:49:34 said that if 50% of your AUM or if your asset under management in India is more than 25,000
00:49:40 crores, you will have to give us the ultimate beneficial ownership of people who are holding
00:49:46 it. The board has approved it and then they said they will come out with a SOP which will
00:49:52 be brought in by the custodians which is deemed depository participants for all the FPIs which
00:49:58 is there. The SOP will set out the entire stuff with respect to what kind of exemptions
00:50:05 will be allowed to various FPIs. So, at the time of when the board note was released and
00:50:10 the consultation was done, it was roughly around 3 lakh odd crores of money or which
00:50:16 was high risk money which was there. That's what SEBI estimated at that point in time.
00:50:21 At that time the total AUM was 45 lakh crores.
00:50:24 FPIs together.
00:50:25 FPIs together. Today it's around 60-61 lakh crores. Now SEBI's sources are telling us
00:50:32 that the entire, that quantum is much lower than what was anticipated in the SEBI paper.
00:50:41 There it was anticipated that roughly 2.2 lakh odd crores was part of the 50% AUM which
00:50:50 was invested in India and 75,000 odd crores was because of belonging to FPIs which had
00:51:02 more than 25,000 crores exposure in India. So, when all the FPIs came into the picture
00:51:10 and when custodians went back because there was an SOP formed, how you will do it? At
00:51:16 that point in time SEBI has been in constant touch with the custodians and many exemptions
00:51:22 were provided. Like if you are a sovereign wealth fund, you will not be allowed, you
00:51:27 don't need to do it. If you are a public retail fund, you don't have to do it. If
00:51:30 you are a fund which is listed in an overseas jurisdiction like many mutual funds are listed
00:51:36 in US market and governed by the SEC, then you don't need to do it. The apprehension
00:51:42 was that there are funds which are pooled in nature but within the funds there are separate
00:51:48 class of instruments which are there. So, X person comes in the fund and say puts 100
00:51:54 million dollars, he gets a separate class of instrument though it's a pooled fund that
00:51:58 100 million dollars is invested in the companies which he wants to. So, SEBI wanted…
00:52:03 But it's too much data, Sajid. It is too much data. So, let's simplify this.
00:52:06 To simplify it that there is no risk from a pooled investment as of today.
00:52:11 So, AIF category 1, category 2, category 3 have no risk for FPI. Is it fair to say?
00:52:16 That is fair to say means any FPI coming through…
00:52:19 H-Fund. H-Fund or AIF.
00:52:21 You have to follow the funnel of exemptions. Wherever exemptions you don't have, you
00:52:27 don't get into an exemption, you have to give a disclosure. And that, what is more
00:52:33 is that as Tamanna was mentioning just before that there is some liquidation fears which
00:52:38 are coming in, right? So, October to Jan end is a time when they have to disclose everything.
00:52:44 That disclosure period is not over yet. It gets over by Feb 1st. After that they have
00:52:50 10 days if they fall under the 50% category and 30 days if they fall under the 25,000
00:52:58 crore category. So, it will go up to middle of March. But they have been given 6 months
00:53:05 time to bring down the positions.
00:53:08 So, a little more, the deadline is a little easier.
00:53:11 Easier.
00:53:12 But just give us a sense of the quantum of funds which will be impacted of that FPI figure
00:53:18 even with this easier deadline.
00:53:20 That number isn't out there, right? It is lower than 45,000 crores but not out there.
00:53:23 60,000 crores is the total, then yeah half of that.
00:53:26 No, no. 50,000 crores, 50% of your AEM if it is invested in India or 25,000 crores of
00:53:39 total amount, absolute amount invested in India. If you break that up, it is 2.2 lakh
00:53:45 crores which falls under the first category and nearly 75,000 crores that falls under
00:53:49 the second category. Now, after the exemptions have been removed, the amount is much more
00:53:55 smaller.
00:53:56 So, all in all this is actually good news.
00:53:57 So, there is no systemic risk. There is no systemic risk as the market was saying.
00:54:02 Was anticipating.
00:54:03 Anticipating.
00:54:04 So, significantly lower.
00:54:05 And sources are saying that none of the FIS or FPIs have sold because of this as of today.
00:54:10 Got it.
00:54:11 So, the fear of liquidation.
00:54:12 I mean how would you know intent? I mean there could be a number of reasons but how would
00:54:18 these sources know intent?
00:54:19 So, sources are saying that we have not seen any kind of abnormal selling or changes because
00:54:26 any selling by the said things have to be disclosed to the custodian and through the
00:54:33 custodian to the regulator immediately.
00:54:35 So, calming, reassuring sort of messaging coming in here, I think that is the important
00:54:40 thing for the market.
00:54:41 Yes, it basically means that the risk is not there and there is no cliff that tomorrow
00:54:45 everyone is going to sell. It is not there. It is 6 months period to if you fall into
00:54:50 that category, you have 6 months period to ease off.
00:54:54 Okay.
00:54:55 Well, Sajid, stay on.
00:54:57 What we need to do is we need to slip into a very quick break and on the other side of
00:55:00 the break, we are going to get our experts to try and probe more about the nature of
00:55:04 the trade today.
00:55:05 But keep in mind this is a small positive or a big positive depending on which way of
00:55:09 the trade you were at if you believe this was the big news.
00:55:12 We will talk more about this and more with our experts on the other side of this very
00:55:15 quick break. Stay tuned.
00:55:17 Chandan Taparia, Head of Technical and Derivative Research at Motilal as well as Mayuresh Joshi,
00:55:22 Head of Equity Research at William O'Neill joins us on the other side.
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00:57:16 Welcome back.
00:57:17 You're watching India Market Open.
00:57:19 Let's take a quick look at the implied open.
00:57:21 It's going to be an interesting morning.
00:57:23 Are we going to see a recovery?
00:57:25 Are we going to see further pressure in banks?
00:57:28 Access bank numbers on the face of it look decent.
00:57:31 Is that going to be rewarded?
00:57:33 Implied open showing maybe a bit of a positive start.
00:57:36 Chandan Taparia and Mayuresh Joshi now joining us on the show for their take on markets.
00:57:42 Mayuresh, I just want to begin with any commentary if you have to the big story that we've broken
00:57:47 on NDTV Profit just a few minutes ago.
00:57:49 Sajid is here with us.
00:57:50 You would have heard him.
00:57:52 There seems to be a clarification from sources that there's no immediate threat to FPI investments in the market.
00:58:01 This concern about a deadline seems to have eased.
00:58:05 Any comments on that or your take on that?
00:58:07 Is this going to be a big relief?
00:58:09 Good morning, Taman.
00:58:10 I think the better part of the market rumors that were moving around yesterday was surrounded by this piece of news.
00:58:18 And what Sajid was just mentioning, I think that will be a big relief for the markets.
00:58:23 If expectations are to be believed and if sources are to be believed, this is the case in scenario.
00:58:30 I think the implied risk that the market probably had for a sharp sell-off that can probably come through because of liquidation,
00:58:36 that probably goes away.
00:58:38 I think that allays the fears that most investors would have on the street.
00:58:43 So, yeah, I think if this turns out to be true, it's a big relief for the markets.
00:58:47 Chandan, just very quickly, let's get your check and take on the levels because we had a bit of a brutal closing yesterday.
00:58:56 Are you seeing any signs of recovery on the Nifty and the Bank Nifty, which took the big hit?
00:59:02 Hi, good morning. Thanks for having me.
00:59:04 So yesterday we opened higher but failed to hold it high and index witnessed sustained selling pressure for most part of the day.
00:59:10 It corrected by around 500 points from its high level and bounce are being sold.
00:59:15 Recently we have noticed negative divergence, so that is working.
00:59:18 So we believe that till it holds below 21,400, 21,500 zone, some more profit-working decline could be seen in the index towards 21,000 to 20,850.
00:59:27 So we'll go with sell and bounce with the view that upside is kept.
00:59:30 Some more profit-working decline could be there in the broader market.
00:59:33 Okay. Chandan, quickly, banks looked very wobbly yesterday.
00:59:39 Is there a banking name or a trade on the Bank Nifty, HDFC Bank, ICICI, what have you?
00:59:45 Yes, so talking about banking name or Bank Nifty that is comparatively underperforming and the major selling started with the weakness in counter like HDFC Bank.
00:59:54 We have seen some sort of resilience in ICICI Bank and Axis Bank, but again, the follow-up is totally missing.
01:00:00 So first, if I talk about the Bank Nifty, we believe that here the structure is weak.
01:00:04 It is holding well below its 50 exponential moving average.
01:00:06 So till it remains below 45, 500, sell and bounce could continue towards downside move of 44, 444.
01:00:12 If I talk about HDFC Bank, weakness is continuously there and we have expiry and the stock is trading below volume at its average.
01:00:19 So weakness could continue.
01:00:20 So now only hope is put writing of 1400 could provide the support.
01:00:24 So as of now, weakness could be there towards 1400.
01:00:26 Talking about ICICI Bank, comparatively okay, witnessed some cool down from high.
01:00:30 So with support of 995, one can attempt towards 1060.
01:00:34 So comparatively ICICI Bank is okay, but Bank Nifty, HDFC Bank, all are showing weakness and further decline could be there in these stocks as well.
01:00:41 Okay, well, we'll watch out.
01:00:44 The pre-open rates will be all over the place.
01:00:46 But I think the moot point today may be not just what happens to the banks, but the clutch of names, which have come out with a very good set of numbers.
01:00:54 And I think we'll talk about all of these as during the course of the next 15 minutes as well.
01:01:00 We'll wait for these rates to settle before we talk more about them.
01:01:03 Fundamentally, Mayuresh, coming on, okay, coming on some of these all in gas names and particularly the city gas distributors,
01:01:15 MGL numbers show that volume growth margins all are supportive, LNG prices cool off might actually aid too.
01:01:22 So what's the call here on MGL and the other gas distributors?
01:01:26 Morning, Neeraj.
01:01:28 So I think a couple of factors at play here.
01:01:31 One, the expectations in terms of volume growth over the next few quarters and years is expected to be relatively better because the government target itself is to take this share of the market from 6% to 15%.
01:01:48 So I think more geographical areas will obviously come through and therefore I think over a longer period of time, structurally, volume growth should be decent.
01:01:55 The second aspect remains largely in terms of intermittent results, which depend a lot in terms of demand supply dynamics, how pricing is expected to be, how input costs will behave,
01:02:05 and therefore how operating metrics, specifically a bit tougher SEM, will probably move.
01:02:10 So from an intermittent short-term perspective, there might be some amount of volatility as far as these variables are concerned.
01:02:17 But structurally, I think the story remains extremely solid over the next few years.
01:02:22 MGL, I just saw your warning note, Neeraj.
01:02:25 Yes, very well put out in terms of how numbers have come out and how numbers will be perceived by the street.
01:02:31 So anybody holding onto these stocks can hold them, but you have to have that amount of disclaimer that from an immediate short-term perspective, there might be some amount of volatility as far as numbers are concerned.
01:02:40 Chandan, would you still consider shorting Zee?
01:02:46 So this thing is very volatile.
01:02:48 Actually, the structure is weak, so there is no worry about selling.
01:02:52 But the only problem is the risk-reward ratio might not favor.
01:02:55 So what we advise is that you can go in option side, however, the premium is high, and tomorrow is monthly expiry, so you can go with next month expiry.
01:03:04 Again, the stock usually comes with a F&O bin, so that is also a concern.
01:03:07 But yes, the structure is weak.
01:03:09 If you ask me as an advisor, then I can suggest that the stock can further drip down towards 140, 135 levels.
01:03:15 Chandan, we are gearing up for market opening, of course, starting off on pre-open.
01:03:20 Very quickly, your top trades this morning, any recommendations on the long or short side?
01:03:25 Yes, I will mix with the long and short, both given the market scenario.
01:03:29 Bharti Airtel is one trade where we have positive view.
01:03:32 The stock is continuously making higher tops, higher bottoms, supports are gradually shifting higher.
01:03:36 We have seen delivery volume and rollovers are better comparatively.
01:03:40 So one can buy Bharti Airtel with support of 1135, it can head towards 1200 to 1215 level.
01:03:46 A selling idea that is on Kenfin Home, structure is weak given the breakdown.
01:03:51 The stock is usually having a range-bound manner, but the way it has seen sharp shelling in the last two days,
01:03:56 indicating further decline could be in the card.
01:03:58 So Kenfin Home can be sold with a stop-loss of 738.
01:04:02 Here we are expecting a downside move towards 700.
01:04:06 Chandan, just your take on banks, pre-open you are seeing another weekday, at least lined up for HDFC and Axis,
01:04:17 Kotak, Mahindra, all of them seeing a bit of pain, at least in pre-open.
01:04:21 We will see how that pans out though.
01:04:23 But any kind of support you are seeing at all for HDFC over here?
01:04:29 So only support is now expiry, let the expiry settle.
01:04:32 Then only we can understand how much position is being carried to the next series.
01:04:37 As of now only support is put at 1400, so there is a next level near 1385 to 1400.
01:04:43 So when the stock is falling down, we should not look at the support, let's look at the resistance.
01:04:48 If any immediate resistance is surpassed, then only we will get the sign of stability.
01:04:51 So look at the 1400 below as a support, and if it moves above 1500,
01:04:55 then only talk about some positive thing in HDFC Bank.
01:04:58 This is how we need to work on HDFC Bank.
01:05:00 So HDFC Bank looking iffy. Mayuresh, any view on Axis?
01:05:04 Clutch of brokerages this morning, not too negative.
01:05:08 I mean Citi has a buy, Jefferies has a buy, HSBC also has retained their buy on Axis.
01:05:15 So pre-open, the mood seems very, very different.
01:05:19 What would you do with private sector banks right now?
01:05:23 So I think decent set of numbers.
01:05:25 Even ICICI Bank had a very decent set as far as most of the parameters are concerned.
01:05:30 Indusend might be a little bit soft, but again, I think a large part of the banking universe,
01:05:34 specifically the large private banks, barring HDFC Bank, have posted a reasonable and a decent set of numbers.
01:05:40 Obviously, their counterparts, mid-cap and mid-tier PSU banks have performed relatively better.
01:05:45 And therefore, the skew in favor of mid-cap PSU banks, both in terms of risk reward and expectations of reasonable growth going forward, still continues.
01:05:54 As we see it on the only left, so few of the PSU banks, banks like Bank of Maharashtra probably look very, very attractive,
01:06:00 even at this juncture from a valuation perspective and from a placement perspective as far as pivot levels are concerned.
01:06:06 Large private banks, we continue to have our hold recommendations on both ICICI and Axis.
01:06:11 Mayuresh, couple of other earnings that are worth mentioning, Piddle Light, very, very solid quarter from Piddle Light.
01:06:18 Top line, margins, substantial improvement. Apart from that, Sona, BLW, I don't know if you tracked this one, again, exceptional numbers,
01:06:27 margin improvement, order book at record highs, geography is looking good.
01:06:32 And I'm going to throw in a large one as well into that mix, which is United Spirits.
01:06:35 Stand out because of what they've also done on the margin front.
01:06:39 Amongst the three that I've highlighted, anything that you would consider adding to your portfolio this morning?
01:06:47 So I think United Spirits, I mean, I might keep the spirits high for the market today because markets really need that and solid set of numbers.
01:06:55 So, again, I think the expectations largely from United Spirits in terms of more products being introduced,
01:07:00 specifically the premiumization products, is going to be very, very helpful in aiding both their top line led volume growth as well as margins going ahead as well.
01:07:11 Input costs have definitely moderated and to that extent of the expectations in terms of stable margins going forward is something that the street believes can continue.
01:07:19 So United Spirit is something that I'll watch out for, as well as Piddle Light.
01:07:23 In my opinion, again, I think for every call, come what you would chode, I think those numbers are probably getting reflected, both in terms of volume growth.
01:07:30 Super margins, I think, they did not just beat the estimates, but I think the margin delivery was far, far better than what anybody expected off the street.
01:07:39 Now, the large part of the expectations here, again, is more products being introduced, more value added products to a large extent.
01:07:46 And the kind of investments that they've been doing over the past few quarters in terms of new products expected to come into the market,
01:07:53 I think that will start yielding results to their distribution chain and the brand that they've got, to the master brands that they probably can lead the market.
01:08:01 So I think both United Spirits and Piddle Light, solid set of numbers, expect good moves here going forward as well.
01:08:06 Right. Chandan, on the charts, do they look as good? Piddle Light indicating to a 4% gap up.
01:08:13 United Spirits as well, like Mayuresh said, will keep the spirits of the markets high today.
01:08:18 And Throw and Sona as well. All those three companies on the charts looking like a good trade anywhere here?
01:08:24 Yeah. So, yes, I also agree that the spirit is high as we're heading towards month-end and weekend.
01:08:31 So I agree to the McDowell view, positive setup, and taking the counter from last couple of months, earlier it used to find hurdle at 11.25,
01:08:40 and hold above the same will open the further upside of 5-7%. So one can buy.
01:08:45 As per the previous closing, support will be around 1100 and it can head towards 1160 to 1180 levels.
01:08:52 Talking about Piddle Light, again, we believe that if market turns volatile, then such name usually comes in support, but that is not visible.
01:09:00 Pressure is clearly seen in the counter. So look at some more weakness. It can drip lower further from current.
01:09:07 Pre-open rates have settled. I want to mark HDFC Bank and just see what has that stock done in the first eight minutes.
01:09:17 I reckon it started off or looking to start off lower. And I think that is the pain point.
01:09:22 Pull up HDFC Bank, the pre-open rates, 1380, you know, the stock looked valuable at 1600, looked great value at 1500,
01:09:30 then corrected all the way to 1427 yesterday, and currently 1380. If you were looking for one pain point for the market, it is HDFC Bank.
01:09:40 I'm adding access to your list. 5% down in pre-open. Those numbers were not bad. I don't know what this reaction is.
01:09:50 And by the way, this is after HD access bank having a significant corrective move already in the last two days as well.
01:09:58 So there is clearly a problem here. Now, you know, Mayuresh, maybe fundamental.
01:10:03 Okay, actually, let's get this fundamental thing going, right? HDFC Bank, India's biggest bank, certainly very valuable, great price,
01:10:12 great value, price to book relative to averages. It's not seen buying. Are you a buyer?
01:10:18 No. Why not? Exactly. The logic is very simple. I think what the street is expecting and what the bank is delivering, Mayuresh,
01:10:27 I think there is a huge expectation mismatch. Now, at some point, right, considering HDFC Bank's base,
01:10:34 there is going to be some amount of stability that will come through. Obviously, the bank has mentioned they are not going to chase growth,
01:10:40 for the heck of chasing growth. So they're going to be very, very cautious when it comes to both the cost of mobilization as well as the advances growth.
01:10:47 As a trend for the industry as well, the risk weighted assets have gone up significantly as a percentage of total assets.
01:10:53 With the conservative management that we probably got, the expectation largely is that over the next couple of quarters, to say the least,
01:11:00 the bank will keep on continuing a very stable show on what it has delivered in Q3.
01:11:05 So to that extent, expecting an earnings turnaround happening in Q4 or Q1 probably looks very, very bleak.
01:11:12 At the same time, if you do a comparison check for PetCap, PSU Banks, and I might be a little bit biased here,
01:11:18 but I think the logic here, Mayuresh, is again, a large part of the whole universe, the customers that PSU Banks have got,
01:11:24 are ex-bankers, pensioners who depend on the bank in terms of their deposit mobilization as well.
01:11:29 So even if NIMS might be a tad bit lower than the larger private banks, the accretion or the acceleration in terms of deposit and advances growth
01:11:37 is still pretty robust as well as valuations. So to that extent, my sense is that it might just be an underperformer.
01:11:43 Some point of time in the next couple of quarters, there might be a vying opportunity, not right now.
01:11:47 That's exactly what I want to ask you. It's all about risk reward. At what stage does HDFC start looking attractive?
01:11:55 I mean, the way it's fallen is almost nerve-wracking. It's not an expensive bank.
01:12:02 Sure, there could be a little bit of a disconnect between what the street was looking for and what the bank is delivering.
01:12:07 But at no point had the bank also over-committed in such a big way that we are punishing the stock to this level.
01:12:14 And let's not forget, there is history. There is the fact that this has been a solid bank for many, many decades to come.
01:12:20 Or decades behind us, rather. At what price would you buy HDFC? 1300, 1350, 1250, 1200? Put it out there.
01:12:29 I think I need a price change to happen on the positive side.
01:12:34 So my own sense is that at some point of time in the coming quarter, as the selling pressure gets off,
01:12:40 most institutions, there are a huge amount of institutions in HDFC Bank as well,
01:12:44 as they start throwing in the towel that nothing will probably happen,
01:12:47 I think at some point of time it will bottom out and start showing a price rise.
01:12:51 And that happens, I think, if it crosses. And our own sense is that we look at pivot levels and growth levels as well.
01:12:57 So it has to cross that 1500, 1550 mark. Unless it does that, I think that supply pressure will continue.
01:13:03 Chandan, just a couple of minutes to close. Let's get an idea of what you're constructive on in today's market.
01:13:10 You've given us your picks, but what are the spaces where you would look for opportunity?
01:13:14 Do you think IT, pharma, maybe some of those plays are still showing promise?
01:13:20 Yeah, like in indices, we need to look at sell and buy systems with the view that further we may see profit-looking decline.
01:13:27 But yes, selective stocks could do well. So definitely I'll go with the IT name or can select selective pharma.
01:13:34 So even in the last trading season when the entire market was falling down, selective pharma stocks are holding well.
01:13:39 And that is the reason that I selected one pick, Bhartiya Tell, as it being low beta in the APAMU side.
01:13:44 So yes, accordingly, in the same theme, CIPLA, we can focus.
01:13:47 Any decline towards 1400 could be bought with support of 1385 and a stock can head towards 1440.
01:13:54 So I can select CIPLA from your pharma basket. BSOFT will be other name in IT basket where trend is positive.
01:14:01 Every small decline could be bought. One can buy with support of 780. It can head towards 835.
01:14:07 So BSOFT, CIPLA, Bhartiya, these are the couple of names which can see resilience and generating alpha with some outperformance in the market.
01:14:14 Indeed. Just take you through a few stocks that will be in focus.
01:14:18 Interestingly, ZEE after a 30% fall yesterday is expected to see a flat start.
01:14:24 Your gainers are your usual suspects that have posted strong earnings, Spitlight, Sona, BLW, Mahanagar, L&T Finance Holdings.
01:14:33 All these counters in focus on back of earnings, Tata, Alexey, Axis Bank getting a thumbs down post reporting.
01:14:40 Chandan, we only actually have 50 seconds. So I am going to quickly toss it to you.
01:14:46 But from the face of it, it is looking like it is going to be a half decent start.
01:14:50 Axis Bank will put some pressure again on the index along with HDFC Bank.
01:14:56 It will be interesting to see how SPI also reacts in today's trade.
01:15:00 Most certainly, Samina. The pocket that we will also talk about is this whole renewable pocket that we marked yesterday.
01:15:12 Vari Renewables is up 5% in the pre-open session yet again. Adani Green is in the green this morning as well.
01:15:18 I must say for all the pain that we have seen in the markets, Adani Enterprises, it is an index stock, has stood rock solid at that 2900 mark as well.
01:15:28 So it is pretty interesting as to what is happening in some of the individual pockets.
01:15:32 But the first trades this Wednesday morning on your screen.
01:15:38 We will start off with a mild negative courtesy banks.
01:15:44 The Bank Nifty will be deeper in the red, I would reckon. The Nifty is trying to claw its way back.
01:15:48 The Bank Nifty certainly down there. Mid caps and small caps very quickly before we get the heat map.
01:15:54 Flat for the mid cap index, flat for the small caps. Yes.
01:15:58 And this is because of the two stocks at the bottom of the heap here on the heat map.
01:16:03 HDFC Bank and Axis Bank will come up on your screen right here.
01:16:07 Axis Bank 3.5%, HDFC Bank not as bad as the pre-open was suggesting, by the way.
01:16:12 And in fact, HDFC Bank seems to be clawing its way back just about a percent or less than a percent now.
01:16:18 Airtel on cue. It was not a big announcement that prepayment hardly any difference.
01:16:24 The stock was up 3% yesterday, giving back some of its gains.
01:16:27 What's done well are some gains for Hindalco. Well, metals have had a belated rally.
01:16:33 There is some excitement towards Chinese markets yesterday.
01:16:36 China did well yesterday and some policy moves, maybe that is aiding a belated move on Hindalco.
01:16:43 I could see no other reason. Maybe I'm wrong, but let's wait and watch.
01:16:46 Is there something else on the large cap end that is reacting to numbers or news?
01:16:52 Not really. Reliance is flat. Infi is about a percent. So, yes, IT seems to be resilient.
01:16:57 We spoke about this and that resilience is visible here because Infi, LTI, HCL Tech, Wipro are amongst the key movers on the session.
01:17:05 Axis, clearly the main culprit and HDFC Bank trying to fight its way back.
01:17:12 Tamanna, what are the broadening of the spectrum? We'll pick the stocks that you may see a reaction here.
01:17:18 But I would just add that look at your AutoPAC also feeling the pressure ahead of some key numbers today and Hiromoto feeling the heat.
01:17:27 But let's look at other stocks that may react to news today and we'll pick Havels to go first.
01:17:33 A bit of pressure on margins that has been seen in Havels. Your rural demand continues to be muted, although your revenues are up 7%.
01:17:43 That's talked about 2% down. JSW Energy, again, the numbers on the face of it looked decent.
01:17:51 Jefferies has a buy call at 600 as well, but the stock not doing too much this morning.
01:17:57 Sona BLW, another one that we should look at and that's up in the green.
01:18:03 Again, a buy call from Jefferies on their numbers with a target of 750. So quite an upside over there.
01:18:11 And that's showing some spot of relief. AU Small Finance Bank is the other one I would look at.
01:18:16 AU Small Finance Bank had some news coming in where they received approval to merge with Fincare.
01:18:22 But that entire pressure on the banking space panning out here as well.
01:18:28 And let's take a look at Lupin. Lupin is something that we put on our list and Lupin showing some positive signs over there.
01:18:36 They've received approval for a genetic drug that works in preventing strokes.
01:18:42 So these are some of the stocks that are on the radar. But of course, a lot more that are showing action this morning.
01:18:50 Lots of other stocks that are catching my attention. I'm going to mention some of the top gainers,
01:18:55 Tamana from the broader markets and Zee after the big fall yesterday is actually up this morning.
01:19:00 Almost 6% gain playing out on Zee Entertainment up to about levels of Rs. 165.
01:19:08 BiddleLight, I'm not sure if that was mentioned, but again, a quick word on that one.
01:19:12 Really solid earnings. The stock is up 4% in trade.
01:19:16 Well, you've also got a few other counters that are trading well.
01:19:20 So some of your media names that got beaten out of style yesterday after the Zee debacle are seeing on finding their feet this morning.
01:19:28 So TV18 is up marginally. Network 80 is up about 1.5% to 2%. Not doing too badly in early hours of trade.
01:19:38 Some of your other counters worth mentioning is Borosil Renewables after a very sharp run up yesterday
01:19:43 because of the solar renewable energy push that we saw on that sector is trading flat.
01:19:49 So after 15% up move, the stock is lower.
01:19:52 Neeraj indicated Vari is actually having another very pleasant morning.
01:19:55 So I'll quickly pull up that one to see what's happening on the stock.
01:19:59 It's another 5% up move from what I understand on Vari Renewables.
01:20:05 So both those counters looking good on the gaining side.
01:20:08 On the sell side, railway was a weak spot in trade after many, many days of doing quite well.
01:20:15 So Rail Vikas Nigam is down 7% this morning.
01:20:18 Pull up IRFC, IRCTC because these are stocks that have really ran up significantly in trade.
01:20:25 And IRCTC after a 400% up move over the last few months saw a big correction yesterday, down another percent and a half.
01:20:33 IRFC is also down about 5%. In fact, IRFC is the one that has been leading the gains recently.
01:20:39 It's down about another 6% in trade this morning.
01:20:42 Well, real estate is weak again. Oberoi is down 5%.
01:20:46 Prestige is down 5%. Sobha is down about 5%.
01:20:50 Tata Elexy post its numbers is getting a little bit of a beating this morning, 5% low on Tata Elexy.
01:20:55 Apart from that, yeah, it's aptly seeing a correction of 2.5%.
01:21:01 PSU Banks as a whole pack aren't doing too well in trade this morning.
01:21:05 So all in all, there is selling pressure at higher levels.
01:21:09 Remember, the GIFT Nifty was indicating to a positive start.
01:21:12 Asian markets aren't doing too badly.
01:21:14 Wall Street as well ended on a slightly higher note.
01:21:17 But despite a whole bunch of positive global cues, nervousness is being felt on our street.
01:21:22 So any sort of a minuscule rally as well is being met with heavy selling.
01:21:27 And Bank Nifty, I think the consensus out is the big culprit even this morning, guys.
01:21:32 Yeah, all I would add, Samina, is that look at how numbers are getting punished in the markets today.
01:21:40 And after results, the impact you're seeing on a man industries, a Karnataka Bank,
01:21:46 you talked about Tata Elexy, a Glenmark, all of these seeing that kind of a push.
01:21:52 And, you know, if I were to look at a theme, we talked about Purvankara in our Stocks to Watch.
01:21:56 And that one on the back of healthy numbers is up 6 percent.
01:22:02 So this is in that sense a time of reckoning as we are seeing Q3 numbers.
01:22:06 You've had a fantastic run up all of last quarter in anticipation.
01:22:11 And now you are seeing the reality check, so to speak.
01:22:15 So numbers that have disappointed definitely getting punished.
01:22:19 Quick take from Chandan Taparia and Mayuresh Joshi.
01:22:23 And then I'll start with you on where you're seeing the markets going today.
01:22:28 A muted kind of a start, not too negative, trying to find its feet with the Nifty IT showing the most promise.
01:22:34 Yeah. So like two or three things we need to notice.
01:22:38 First, today India VIX is up by around 5 percent.
01:22:40 So market opened down, recovered, but VIX is at high.
01:22:43 So that first thing we need to keep in mind because of that volatile swings cannot be ruled out in the market.
01:22:49 For Nifty now major support will be around 50 exponential moving average and that goes near 21100.
01:22:55 So 21100 we need to look at key support. Upside 21400 is the job.
01:23:00 Now if I talk about the Bank Nifty Index, we were having key support at 44444 and exactly mid high near to the same.
01:23:07 So that level could act as a key level. And because of that, we may see one bounce to us 40 by 250.
01:23:13 So some sort of bounce could be there in both indices.
01:23:16 However, structure is negative. Bounce could be kept, but those who are looking for early play or some swing, they can play with some bounce.
01:23:23 Now looking at the stock wise, I'll recommend BSOFT as a buy in IT peg holding well, lesser risk.
01:23:29 So one can go with BSOFT for an upside move to us 830, 840 zone.
01:23:33 And apart from that, a selective consumption theme could be in focus.
01:23:37 Indian hotel after the previous day decline, now taking it key support.
01:23:40 So with support of 465, we can see a move to us 485, 488.
01:23:45 Well, you know, Birla Soft has had a really strong move and no surprise that there is some more upside that is being seen by Chandan Taparia on Birla Soft.
01:23:57 So watch out for that one. I want to mark stocks which have come off in a one month chart, for example, of a Praveg, for example.
01:24:04 We'll show you the importance of paying heat to valuations.
01:24:08 Praveg had gone up all the way to 1250 or thereabouts. It's now reeling at 950.
01:24:13 Reeling would be a wrong term because it's had a very strong move.
01:24:15 Otherwise, can we bring the one month chart of Praveg? Look at the corrective move that has happened there.
01:24:19 Then look at the corrective move that's happened in Angel One.
01:24:22 Very strong numbers, but just that the rally was so strong from 37, 3800.
01:24:27 Angel One is now down to 3000. Again, a sharp corrective move there.
01:24:31 So watch out. I mean, yes, paying top dollar for growth is great, but not at egregious valuations.
01:24:38 That's the key point. Now, Mahiresh, come in on Angel One.
01:24:42 Now you'd be at a liberty to talk about it.
01:24:45 So I'm just trying to understand what happens to businesses like these.
01:24:48 Very strong growth. But is it priced in?
01:24:53 And is that the reason why the stock is now corrected nearly 20, 22 percent from the highs that it made?
01:25:00 Absolutely. And again, I think it's an entire proxy to how capital markets will move.
01:25:06 And the numbers that have probably justified the kind of price move that Angel One has delivered over the past few months.
01:25:13 But again, I think the price action in the past three months itself,
01:25:16 the chart that I'm now seeing on the screen has a little bit too excessive in terms of most expectations being built in.
01:25:23 Obviously, the data points that are coming through in terms of a month on month, a quarter on quarter accretion,
01:25:29 the super app that Angel One has created,
01:25:31 which means there is a lot of cost optimization that happens behind the dynamics on how numbers will move going forward.
01:25:38 But to a certain extent, as you rightly put out, I think there is a certain price that you'll pay for growth in the next two years.
01:25:45 And if there is another big slip for whatever reason in the next few quarters,
01:25:50 I think the stock will get punished quite significantly because of excessive valuation.
01:25:54 So you have to be very, very careful what you're paying for and what price you're paying for.
01:25:58 Anybody holding can write the momentum, price investors will be too important.
01:26:02 Sorry, you want to?
01:26:04 No, I just have you marked Z.
01:26:06 Yes, I have.
01:26:07 Because Z is up 6%.
01:26:10 So just a bit of news that has come in on Z.
01:26:13 A letter has surfaced, which we also have access to, written by Subhash Chandra to the finance minister,
01:26:20 saying that SEBI has not been treating them fairly.
01:26:24 And a lot of announcements being made by SEBI will end up scuttling the deal.
01:26:29 The timeline of that letter is important.
01:26:31 It was written on the 16th of January.
01:26:33 Of course, all the events happened post that.
01:26:36 And on 22nd, officially, that deal was called off by Sony.
01:26:40 But Subhash Chandra did write a letter saying that SEBI has scuttled the merger.
01:26:45 A lot of news flow around Z, Sony.
01:26:48 I mean, that stock fell 32% yesterday.
01:26:51 Why at all there is a jump right now is the key question.
01:26:56 And I don't know who would want to speculate on this right now with not enough clarity on what's happening next.
01:27:02 Mayuresh, is that a stock you're tracking or have any thoughts on?
01:27:05 No, I think we'll wait out for everything that is expected to play out.
01:27:10 So just let's wait out for whatever will happen over the next few days.
01:27:13 Right. That's Z for us, the stock seeing a pullback after a decline of 30% in trade yesterday.
01:27:21 Remember, the price targets were about a 170 odd on the stock.
01:27:25 So you may see a little bit of recovery going back to those levels.
01:27:27 Chandan, I want to ask you about a shorting opportunity across some of those railway stocks.
01:27:33 So Rail Vikas, IRFC, finally, after weeks of moving in a one-way direction, let up in trade yesterday.
01:27:42 There was pressure on them. Some selling continuously as well.
01:27:45 Would you short any of these rail names?
01:27:49 I know budget's around the corner as well, so we'd be a little mindful.
01:27:52 But nevertheless, for a quick buck.
01:27:54 No, I don't want to go and short the counter where trend is intact.
01:27:58 However, yesterday we have seen good selling pressure, but it doesn't mean the trend has changed.
01:28:02 So I'll go with buy on decline instance.
01:28:04 You can notice that this stock has really done well.
01:28:06 And after small decline, I think that provide the next leg of opportunity.
01:28:10 In fact, I'll go with buy on decline in such kind of name to be with the trend,
01:28:14 with the view that first leg of rally could be there as we head towards the budget.
01:28:18 And these are one of the strongest sector in the market.
01:28:21 Which ones would you buy? At what level is what I'd like to know.
01:28:24 Buy on dip, but a price or maybe a level. And what stock would you buy?
01:28:30 Yeah. So looking at the stock wise, I'll go with the IRCTC.
01:28:34 There is an FNO as well. As of now, it has major support near 900 to 910.
01:28:40 So near 900 to 910 I'll buy with support of 850. I look for again 1020 kind of level.
01:28:46 If you look at the other stocks in railway, then I can focus on counter like RVNL,
01:28:52 Railway Cars Nigam Limited, major trend is up.
01:28:55 The stock is already up by around 60% in this month.
01:28:58 And any decline towards 280, 285 I'll buy. For upside move towards 320, 340.
01:29:06 Okay. Watch out for that. Chandan, leave it at that. Thanks so much for taking the time out.
01:29:09 Mayuresh, just one quick question. Karnataka Bank numbers,
01:29:12 did they seem so bad for the stock to do what it is doing? It is down about 11% now.
01:29:19 We'll wait it out for management commentary, Neeraj, because there is some clarification that is needed
01:29:23 in terms of how the growth dynamics are looking going forward.
01:29:27 On the flip side, I think, have a look at something like a Karur BS,
01:29:30 I think exactly the opposite in terms of both numbers and management conversation.
01:29:35 Okay. Fair point. Wait for the commentary thereof.
01:29:38 That's happening in a lot of stocks. People are talking for the commentary for United Spirits as well.
01:29:42 Mayuresh, take a moment to thank you for joining in today and giving us your thoughts.
01:29:45 Really appreciate your time. Time for a short break on the news that it's a flattish to a marginally lower start.
01:29:49 On the other side of the break, a clutch of management conversations.
01:29:52 Start off with granules on the Q3 earnings and then get in L&T finance holdings. Stay tuned.
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