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00:00 Good morning and happy Monday to you.
00:16 Welcome.
00:17 This is NDTV Prophet.
00:18 My name is Alex Mathew and you are watching All You Need To Know.
00:20 Let us take a look at the headlines this morning.
00:24 Rate cuts are unlikely in March in the US, according to Fed Chair Jerome Powell.
00:29 He says this in an interview aired on Sunday.
00:31 He adds that the committee wants more confidence before moving to a restrictive stance.
00:37 Quality, competitiveness and valuation matter when it comes to divestment of PSUs, says
00:44 the Finance Minister in an exclusive NDTV interview.
00:49 Focus shifts to the RBI policy after the budget.
00:52 SBI Chairman says he sees no change in the stance or tone, the status quo is likely to
00:59 continue, he says this in an NDTV Prophet exclusive.
01:03 BTM denies probe by EDE, says it is not involved in money laundering.
01:09 Separately, Trader's Body advises customers to switch to other payment applications.
01:16 The Adani Group will start operations at what will be the world's largest single-location
01:22 copper plant by March.
01:26 The top news this morning.
01:27 Fed Chair Jerome Powell has said that the central bank will proceed carefully with interest
01:32 rate cuts this year and will move at a considerably lower or slower pace than the market expects.
01:40 When asked about the likeliness of a rate cut in March, he said, "We've said that we
01:47 want to be more confident that inflation is moving down to 2 percent, and I did say yesterday
01:53 that I think it's not likely that this committee will reach that level of confidence in time
01:58 for the March meeting, which is in seven weeks.
02:01 So I would say that's not the most likely or base case."
02:06 As of Friday, the bet of a rate cut had fallen to 20 percent from 40 percent, according to
02:12 a Bloomberg report.
02:14 That's because the economy has remained resilient despite higher interest rates.
02:18 And that's visible in the jobs data for the month of January, which came in much better
02:23 than expectations at 353,000.
02:26 This after December's figure was also significantly revised upwards to 333,000, according to the
02:34 Labor Department data.
02:37 All of that has prompted selling in bonds at the end of the trading week last week,
02:42 and that pushed the yield on the 10-year Treasury to close to 4.1 percent.
02:46 It had fallen to below 4 percent just last week.
02:51 Markets are reacting to Powell's statement this morning, with the Dow futures currently
02:56 negative and you have quite a few of the Asian markets that are trading with a negative bias
03:01 as well.
03:02 Among the early risers, you had a couple of the three early risers trade in the red, with
03:06 the Kospi losing about a percent or more than that, and the Australian benchmark also losing
03:11 that amount.
03:12 And you have the Hang Seng as well as China, or Chinese onshore markets, which opened in
03:18 the red this morning.
03:19 Of course, a lot more happening in China that is reflected in that downtick this morning.
03:25 But let's turn to the Indian equity markets, and you had quite a rollercoaster ride on
03:31 Friday to end the week, an unusual 300-plus point range for the Nifty 50.
03:37 What are the latest cues from the F&O space heading into the new trading week?
03:42 Samina is joining in to give you some perspective on that.
03:45 Samina, like I was saying, it was a frenetic session on Friday.
03:50 What do we see at the start of the week?
03:51 Indeed, Alex, I think you put it right.
03:53 It was a rollercoaster ride for traders on the street on Friday.
03:57 It was a wide range of trading, finally the Nifty made a new life high in terms of intraday
04:03 close, but finally closed at levels of 21,853, 0.7% higher.
04:09 What was also interesting is that it was a wide-based buying that was seen across the
04:13 board.
04:14 Bang Nifty, if you can quickly pull that up and see what's happening there, because this
04:17 continues to be a bit of a sore point for the markets.
04:21 The level of 21,100 was an important level, but the struggle really was felt at 46,500,
04:27 but the spot finally closed on Bang Nifty with a 0.5% cut.
04:30 Now, what is also important to note is that Nifty Bank Premium is trading at a 265-point
04:37 premium on Bang Nifty, but the best-case scenario is that activity is largely focused and Bang
04:42 Nifty starts contributing to the Nifty up move this week.
04:46 What you also want to note is that the Wix index has cooled off a little bit, so that's
04:50 a little bit of a comfort coming in for the street.
04:52 That's really where the open interest change is visible.
04:55 Open positions, the futures and options picture indicate that in this week if you see more
05:00 activity in terms of puts being written at levels of 22,200, you may see the Nifty scale
05:05 up to new highs.
05:06 But open interest clearly focused and indicating that a new record close for the Nifty could
05:11 be on the cards.
05:12 That's largely what the picture has been.
05:14 What you also want to take note of is the short-long, the ratio that you have for your
05:19 FPIs or FIs has also dropped significantly indicating that foreign investors have now
05:26 actually cut off their short positions, now betting on the long side of the market.
05:31 What you also saw that FI activity picked up on Friday, so they did come in as net buyers
05:35 as opposed to selling in the equity market all through the month of January.
05:39 So, a couple of positive cues, right?
05:41 Foreign Nifty is required to participate, so that's going to be very, very critical
05:45 for the Nifty to close, make a new closing high.
05:48 Along with that, your Wix looks comfortable, so that's something what we're taking comfort
05:51 from as well.
05:52 Your maximum call open interest sits at levels of 22,200, so what we really need is that
05:58 the Nifty needs to break out about 22,000.
06:01 Once those levels are taken out, you could see new record close closer to levels of 22,200.
06:07 In order to do that, call writers need to exit 22,000 and put writers need to enter
06:12 that level.
06:13 So, if you see more put activity building up at 22,000 up here, which is what we are
06:17 seeing in terms of call activity, if that ratio sort of changes over the next few days,
06:21 you may see the Nifty actually doing quite well over the next couple of days.
06:26 Worth a mention, GIF Nifty, like you said, is indicating to a flat start.
06:29 So, don't expect fireworks in today's day of trade.
06:31 It's going to be earnings again.
06:33 Could be a volatile week again, but new highs still cannot be ruled out.
06:36 Alex.
06:37 And that there is the indicator open.
06:39 Thanks so much, Samina, for laying that out for us.
06:41 Of course, Samina will be back in just a bit to take you through the nitty-gritties of
06:45 things before the start of trade.
06:46 But let's move on, in fact, and talk about State Bank of India, which is the first Nifty
06:51 company we are focusing on on the earnings front and the bank's net profit dipped by
06:55 over 30%.
06:56 I believe there is a one-time item to talk about, which has caused that decline in the
07:02 bottom line.
07:03 We've got Mimansa joining in to give us the fine print and the key takeaways.
07:06 Mimansa, what can you tell us?
07:07 Good morning.
07:08 Good morning, Alex.
07:09 So, yes, the bank showed that one-time provision for pensions as an exceptional item and that
07:16 has led to a 35% fall in its year-on-year net profit.
07:20 Now, with this, the return on assets has also come down very sharply to 0.62%.
07:27 If the bank had not provided for this pension-related provision, the return on asset would have
07:34 been around 1%.
07:36 The net interest income grew by mere 4% year-on-year, which led to a 7-basis point compression in
07:43 net interest margins as well.
07:45 Now, this is because SBI's cost of deposits rose while the yield on advances remained
07:51 almost flat in Q3.
07:53 So, all in all, deposit repricing is one of the reasons that is leading to a margin compression
07:58 for SBI as well as across the banking system.
08:03 If we talk about deposit growth in particular, Bernstein has pointed out that even though
08:08 YOY growth for a country's largest bank was in line with the system deposit growth,
08:15 the sequential deposits only grew 1.6%, which is lower than other banks and top private
08:22 banks as well.
08:23 Loan growth, however, continued to be led by retail loans, but management expects a
08:27 significant pickup in the corporate credit book due to the private capex push.
08:36 The slippages this quarter, the management has said that one SME account has led to higher
08:42 slippages on a sequential basis, having said that the staff costs are expected to remain
08:48 elevated in Q4 due to provisions of Rs 5,400 crore, according to MK analysts.
08:56 This is why some brokerages have trimmed down their earnings outlook for FY24, but they
09:03 have maintained their buy rating on the bank.
09:06 One interesting bit in this quarter that I would want to highlight here, Alex, is that
09:10 the SBI's intent to raise capital going forward.
09:13 On net basis, the bank is capital adequate, like Mr. Dinesh Khara, SBI chairman, had said
09:18 in the post-earnings conversation with us, but they are open to raising growth capital
09:24 if the loan growth exceeds the return on earnings growth.
09:29 Thanks so much for giving us that perspective, Mansa, this morning.
09:32 Let's also focus on UPL then.
09:35 It's reported a December quarter that was quite disappointing.
09:38 The company's revenue dipped over 27% and margins have also contracted quite substantially.
09:44 Varsha is joining in to give you some perspective on that.
09:47 Varsha, seemingly the pain in the chemical space is not over.
09:50 Good morning, Alex.
09:52 As you rightly said, the pain isn't over and I think they may require one more quarter
09:58 to make things improve.
10:00 Now if you see, when it comes to UPL, we saw weak results.
10:04 Now company did post net loss of Rs.1,600 crores.
10:08 Now what are the reasons behind this weak results?
10:12 Now one of the reasons is pricing and destocking has hit earnings.
10:15 If you see, revenue decline is due to destocking, low channel demand in North America and Europe
10:20 also the ongoing pricing pressure in Brazil and other key markets have actually affected
10:26 this growth where their demand is weak.
10:28 Also if you see, a contribution margin has been impacted by high cost inventory liquidation
10:32 and higher debates to support channel partners.
10:35 Now UPL did had a con call.
10:37 So few highlights from the con call is the company is launching new products which will
10:41 help its recovery in next two to three quarters.
10:44 Also UPL is aiming at 100 million US dollars operating cost savings in FY25 over FY23 pace.
10:50 Also in Brazil, companies facing pricing related challenges though they have gained the market
10:55 share from 8% to 10% and in Europe channel inventory is a key challenge apart from product
11:02 bandwidth results in volume decline.
11:05 Also if you see, volume may decline in Q4 FY24 but likely to show some growth quarter
11:11 on quarter and companies expecting a lower cost in inventory for FY25.
11:16 Also the management expects sequential margin improvement in Q4 FY24 although companies
11:22 expecting to normalize business in Q2 of FY25 as destocking subsides.
11:28 Also there has been some rating issues with this company.
11:31 So the weak year to date results and high rate of almost 1,000 crores of debt raise
11:37 concerns on sustaining investment grade for the company.
11:40 So the company said that it will await feedback from rating agencies after submitting details
11:44 and since UPL earnings have been crushed, it is possible that rating agency may extend
11:50 time for UPL.
11:51 All right, thanks so much Varsha for breaking down the numbers for UPL today.
11:55 It could be under pressure based on the print of its earnings.
11:59 We got Tata Motors also to focus on and this was expected to be a stellar set of numbers
12:04 and likely also on the back of a lower base last year.
12:07 And you have margins that have improved quite substantially and the JLR performance is something
12:11 to look at very closely.
12:13 It has performed well.
12:15 We've got Vinay to give you some of those key takeaways.
12:17 Vinay, what can you tell us?
12:19 How does it stack up to the expectations?
12:21 Yeah, so if you see that the profit has more than doubled on higher JLR sales and it has
12:27 significantly beat the estimates of the streets.
12:30 So this is the fifth consecutive quarter of profits for the company and you could say
12:34 that a likely turnaround has been completed because now the company is expecting an even
12:40 better performance in Q4.
12:42 So if you look at the JLR sales, excluding its China JV, the sales rose 27% in the quarter.
12:49 And if you look at the Indian business, which is the passenger vehicle and CV, so passenger
12:54 vehicle sales rose 5% in the quarter and commercial vehicle sales rose 1%.
12:59 So the company is saying that all auto segment businesses are performing well and they continue
13:05 to expect that it will continue the performance in the coming quarters as well.
13:10 The company is confident because they are saying that new launches will be coming at
13:15 Tata Motors passenger vehicle business and the supplies at JLR will also improve.
13:21 And you can see that the improvement in JLR sales has also led to an expansion in the
13:25 margins as well.
13:26 The company is confident of achieving its deleveraging plans as well.
13:31 So they are saying that they are confident that they will end the financial year 2024
13:35 with the net debt of less than $1 billion, which was their earlier goal.
13:40 And they are also sticking to their plans regarding the cash flows of the company.
13:45 Right.
13:46 Thanks so much, Vinay, for bringing us this detailed consolidated basis.
13:49 The EBITDA margin standing at close to 14% for the quarter, which indicates that the
13:54 Jaguar Land Rover margins have improved quite substantially and that's certainly a stock
13:58 to watch out for in trade today.
14:01 We have to slip into a very quick break.
14:02 We've got more stock specific action on the other side.
14:04 So do stay tuned.
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15:10 - Welcome back, you're watching All You Need to Know.
15:19 We've got an update on the ZSony case,
15:21 where Sony has just said that they are disappointed
15:23 with the SISC's denial of emergency internal relief
15:28 that came over the weekend.
15:30 To put this in context and tell you what this means,
15:32 we've got Sajid joining in.
15:33 Sajid, essentially what Sony was asking for
15:37 was an emergency interruption in what Z is intending
15:41 to do with the NCLT, right?
15:43 What can you tell us about the latest development?
15:45 - It's a setback for Sony for sure,
15:48 because they were seeking an injunction against Z
15:53 from approaching the NCLT with respect to,
15:56 you know, the existing case,
15:58 which is basically to enforce the entire merger
16:01 through the NCLT process.
16:04 What SISC, which is a tribunal arbitration,
16:07 international arbitration tribunal based out of Singapore,
16:10 has said that it doesn't have any authority
16:12 to direct NCLT at this point in time.
16:15 And so the interim application,
16:17 which was moved by Sony through its companies,
16:22 has been rejected by SISC in that sense.
16:25 But Sony continues to say that it will fight the arbitration
16:28 to ensure that, you know, it gets a termination fee,
16:31 which is $90 million, which it's seeking from Z.
16:35 And Z, on the other hand, is in NCLT to enforce
16:39 the merger which was approved by the NCLT
16:42 and which was later on terminated
16:46 after the deadline for the merger ended in January.
16:49 - Right, thanks so much, Sajeev,
16:51 for breaking that down for us.
16:53 Another stock to watch.
16:54 It's gonna be an action-packed day for sure.
16:56 There are more stocks and the likes of Aurobindo Pharma
16:59 as well as HG Infra and more Eye & Focus.
17:01 Mika is joining in with some of the key details there.
17:03 Mika, morning, what can you tell us?
17:05 - Yes, so I'll start with Aurobindo Pharma,
17:07 where the USFDA has finished an inspection
17:10 at its unit three of its wholly subsidiary
17:13 UGR Pharma Specialties.
17:15 Now, the inspection ended with nine observations,
17:17 which is gonna lead the company to stop
17:19 manufacturing lines of certain products,
17:22 but doesn't say any material impact on the business.
17:24 Then we have HG Infra Engineering,
17:26 which has received an LOA from the Central Railways,
17:29 where it's gonna construct a new BG line
17:32 approximately of 50 kilometers,
17:34 and the order is valued at 716.11 crores
17:38 for a construction period of 30 months.
17:40 Then we have Cochin Shipyards,
17:41 which has signed a new contract with the Indian Navy
17:44 to undertake medium refits
17:46 for two of its Indian Navy vessels.
17:48 Now, the contract value is at 150 crores,
17:50 taking the total order intake in Q4 to 750 crores.
17:55 Then we have Torin Power,
17:56 which will set up 150 megawatts of solar power projects
18:00 at four Sharp Burji desalination plants,
18:03 and the last mention is Mahindra and Mandra
18:05 financial companies, where the company did report
18:08 disembursements of 4,440 crores,
18:11 which is an 11% year-on-year growth,
18:14 and its collection efficiency stood at 95%.
18:16 - Right, thanks so much
18:17 for getting us those details, Meeka.
18:19 Let's continue to focus on earnings,
18:21 and we've got Interglobe Aviation, as well as Delivery.
18:24 Chittaggar Rail and AFL India
18:27 that have reported their third quarter numbers,
18:29 and Anushi is joining in to give you
18:31 all the key details there.
18:32 Morning, Anushi, what can you tell us?
18:33 - Morning, Alex.
18:34 So, starting off with Interglobe Aviation, which is Indigo,
18:37 has reported a strong beat on its results,
18:40 with its revenues growing about 30%
18:42 at rupees 19,452 crores.
18:44 This was mainly led by its improvement in yields,
18:48 which saw about a 2% ROI increase
18:50 at rupees 5.48 per kilometer.
18:53 Now, even the EBITDA showed about a 40% growth,
18:56 with the margins improving at 28% compared to 25% earlier.
19:00 The net profit also almost was like 2.1 times
19:04 at about 2,998 crores compared to 1,400 crores of last year.
19:09 In other key highlights, also,
19:10 the capacity growth guidance was revised to 20%
19:13 compared to the north of 10 guidance
19:15 that they had maintained earlier.
19:17 Now, coming to Delivery,
19:18 the revenues showed about a 20% growth,
19:21 which was led by its express parcel segment,
19:23 and the park truck load business,
19:25 while the EBITDA now was like positive
19:28 compared to about EBITDA negative loss of about 73 crore,
19:33 with the aid of its transportation business.
19:35 With this, the margins now stand at about 5%,
19:38 with a net profit at about 11.7 crore
19:41 compared to a loss of 195 crore in the last year.
19:46 Third, we have is Titagad Rail System,
19:48 which again was a beat on its expectations,
19:51 with the revenues showing about a 25% growth,
19:55 led by its freight rail system.
19:56 However, the company's other segment,
19:58 passenger system, did record a decline in this.
20:01 Now, EBITDA was up about 52%,
20:04 with the margins also improving at 11.5% compared to 9.5%.
20:09 And last on the list is AFLIL India,
20:12 with the revenue growing about 15%,
20:14 driven by its core CPCU business,
20:17 while the EBIT was about,
20:19 the margins were down about 25 bps
20:21 compared to 15.7% compared to 15.9.4% earlier.
20:26 So these are the four results that we should keep on focus.
20:31 - All right, thanks so much Anushi
20:32 for bringing those numbers down for us.
20:34 From the Nifty 50 pack today on the earnings front,
20:37 you've got Bharti Airtel,
20:39 that will be posting its numbers for the third quarter.
20:41 And its net profit is expected to be a little bit restricted
20:46 on account of its spend on 5G CapEx.
20:50 We've got Smriti joining us
20:51 to tell you more about the key expectations.
20:53 Yeah, Smriti, morning.
20:55 What are the key numbers to focus on here?
20:57 - Good morning, Alex.
20:58 Alex, you rightly mentioned that net profit
21:02 will remain restricted on the back of 5G CapEx spend,
21:05 and even devaluation of its African currency.
21:08 If you look at the other metrics, that's revenue,
21:10 that's likely to rise about 3.5%,
21:14 about nearly about 38,338 crores.
21:18 Whereas if you look at EBITDA,
21:20 that will also remain restricted to about,
21:24 because of 5G spend as well,
21:25 and is likely to increase only 2.5%.
21:28 Margin's likely to remain flat.
21:30 If you look at APU,
21:32 that's likely to increase only 1.1% quarter on quarter
21:37 to nearly 205 rupees,
21:40 as compared to 203 in the last quarter.
21:43 Now, the African enterprise and home services
21:47 are likely to show steady growth in this quarter.
21:50 The underlying constant currency growth
21:52 is also likely to be healthy,
21:54 even though there's going to be some devaluation
21:57 in the African currency.
21:59 Now, the company is targeting at least 500 billion
22:03 of market opportunity with the enterprise segment.
22:07 So that's a big plus for Airtel.
22:10 Then the company is also expecting about 80%
22:13 of corporates will be putting in,
22:16 or will be using 5G in the next three years.
22:19 So that's also another plus for Bharti Airtel.
22:22 And we keep a track of earning
22:24 and we'll bring you all the updates on that.
22:26 - Absolutely.
22:27 Thanks so much for getting us those details this morning.
22:30 That ARPU number certainly one to watch,
22:32 205 is the expectation.
22:33 Let's see where it comes in at.
22:36 There's action from the primary markets,
22:38 and in fact, it's quite a lot of activity at that this week.
22:43 Not a lot to be raised,
22:44 a cumulative amount of 2,600 crore rupees,
22:47 but there's many as four public issues to watch this week.
22:51 Saloni is joining in to give you some details
22:52 on the companies that are hitting the market.
22:56 Saloni, morning, what can you tell us?
22:58 - Good morning, Alex.
23:00 To break down these numbers
23:01 and how much these companies are raising individually
23:03 and which issue is opening when,
23:05 our first is Park Hotels, which is opening today
23:07 with the aim to raise about rupees 900 crore.
23:09 Now it combines a fresh issue
23:11 of about to be 600 crore worth of shares
23:14 and offer for sale of rupees 320 crore.
23:17 It has an issue price of rupees 147 to 155 rupees per share.
23:21 And the price to earnings,
23:24 price to equity ratio is about 68 X.
23:27 Now, when we compare it to its listed peers,
23:29 which is Indian hotels, Sami hotels, Leventry,
23:32 they are in the range of about 56 to 70 X,
23:36 pretty much in that range.
23:38 And the implied market cap of the companies
23:41 at the upper price band is over rupees 3,300 crore.
23:45 Now it's among the eight largest hotel chains in India
23:48 and the diversified portfolio that it has
23:50 is making analysts bullish on this.
23:52 And in fact, Anand Rati and IDBI Capital
23:54 have subscribed to the IPO.
23:56 Now talking about the other three IPOs
23:58 which are opening on Wednesday,
24:00 two is from the small finance bank space,
24:02 talking about capital SFB IPO,
24:05 it is priced in the range of rupees 445 to 468 per share.
24:08 And it's going to raise about rupees 520 crore,
24:10 which is going to be a mix of fresh issue
24:12 as well as offers it.
24:14 That means that the existing shareholders
24:16 will bear some stake.
24:17 Another price to book ratio is going to be about 2.6 X.
24:21 Price to book is something that we,
24:23 is a metric that you go for financial services.
24:26 And implied market cap is going to be
24:28 about rupees 2,000 crore.
24:30 General small finance bank on the other hand
24:33 is priced in the range of rupees 393 to 414 per share.
24:37 It's going to raise about rupees 570 crore,
24:39 again a mix of fresh issue and offer for sale.
24:42 And it has a price to book ratio of 1.2 X
24:46 with an implied market cap of over rupees 4,300 crore,
24:49 which is at the upper price of the price band.
24:52 Rashi Peri Pheris,
24:53 it's a Mumbai based distributor of technology brands.
24:57 It is priced in the range of rupees 295 to 311 per share.
25:01 It's going to raise about rupees 600 crore of shares,
25:03 which is entirely a fresh issue of shares.
25:05 All right, thanks so much for breaking that down for us.
25:08 We're completely out of time on this particular edition
25:10 of All You Need to Know,
25:11 but there's lots lined up in the next hour or so
25:14 before the start of trade.
25:14 So do stay tuned.
25:15 This is EngTV Profit.
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