- #Syrma SGSTechnologies has seen its stock decline nearly 9% since it posted its Q3 results
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TVTranscript
00:00 (upbeat music)
00:02 (upbeat music)
00:05 - Good morning.
00:31 Hello, watching Ask Prophet on MTV Prophet.
00:33 I'm Smriti Choudhury and with me is Alex Matthew.
00:36 Now for the next 30 minutes,
00:38 we'll take all your stock related questions.
00:40 So you can write all your questions to us
00:43 on any of our social media channels
00:45 or on the YouTube live chat.
00:47 We'll also be tracking the WhatsApp number
00:49 that will be flashing on your screen
00:50 and we'll take up questions from there as well.
00:53 Now, before we move on,
00:54 let me introduce you to the guests for today.
00:56 We have with us Mr. Sunny Agarwal,
01:00 SBI Cap from SBI Cap and Ayush Mehta
01:03 from Nirmal Bang Securities.
01:04 Welcome to both of you
01:05 and thank you for taking the time out.
01:08 Now, before we jump into the questions,
01:10 let's take a quick look at the markets.
01:12 Alex, we started on a strong note in the morning,
01:15 but where do we currently stand?
01:17 - As flat as flat can be.
01:19 And I think in this certain situation,
01:21 one of my colleagues has called it flat as a pancake.
01:24 That's essentially what we are right now,
01:27 completely unchanged from the previous close.
01:29 And as Smriti pointed out,
01:31 we've given up some gains on the benchmark index.
01:34 The broader markets continue to hold on to some gains,
01:37 just about a third of a percent each
01:39 for the nifty mid-cap 150 index.
01:42 Right now, in fact, even lower than that
01:44 and a third of a percent for the small cap 250 index as well.
01:47 Perhaps, you know, the market breadth
01:50 losing out a little bit.
01:51 In fact, let's pull up the advanced decline ratio
01:53 and that will probably show you
01:55 that that gap between the advances and declines
01:57 would have narrowed quite significantly.
01:59 In fact, yeah, so there you go.
02:01 A very clear representation of what's playing out
02:03 in the market right now.
02:05 Let's take a look at some of the key indices as well.
02:08 And you will notice that there are a few
02:09 standard performers.
02:10 Of course, the auto index was outperforming
02:12 at the start of trade, but it's no longer the case.
02:14 In fact, it's losing ground as a pack.
02:16 The PSU banking pack continues to be the top gainer,
02:19 followed by Realty, Media and Pharma,
02:22 but not very big gains to speak of.
02:24 We are, however, focusing on one particular stock
02:27 from the broader markets and that is Sirma.
02:29 And this is an EMS play from what I have seen
02:33 and I must say that I have not seen
02:35 the numbers very closely.
02:36 Smriti, what are you picking up?
02:37 - Well, the results were kind of disappointing,
02:40 which is why we're seeing a sharp down tick
02:42 in the stock as well.
02:43 We saw revenues grow 38% to 709 crores.
02:47 However, EBITDA was down about 14% to 41 crores
02:50 and margins contracted to 7% from 11%
02:55 in the previous quarter.
02:57 Net profit was down 40% to 20 crores.
03:00 However, we also spoke to the management of Sirma
03:03 and two points that were highlighted
03:06 was their order book.
03:09 Now, they have an order book of about 4,500 crores
03:14 and they expect to execute 4,000 crore
03:18 of this 4,500 crore in the next 12 months.
03:21 However, their revenue, they said,
03:23 is likely to remain at these levels only.
03:26 So, which is kind of a, you know,
03:30 contrary to what we usually have
03:32 and you start executing orders,
03:33 your revenue should start to go up as well.
03:37 But that's what we got from the management.
03:40 Now, we will be joined by Sunny Agarwal in a bit.
03:44 - But in the meanwhile, let's in fact take a very quick check
03:47 of where the markets are right now
03:49 while we're waiting for Sunny to join.
03:51 Ayush, coming to you, good morning to you.
03:54 What are the key levels for the benchmark Nifty 50
03:56 as well as the Bank Nifty today?
03:58 - Good morning, Alex.
04:00 Thank you for having me on the show.
04:01 As we talk about Nifty,
04:03 Nifty is taking continuous resistance
04:05 around 22,125 levels and today it has made
04:08 a high of approximately 22,050.
04:11 We feel there's a big support zone at Nifty
04:13 at around 21,700 levels, which is its 20-day moving average,
04:17 which it has sustained and surpassed
04:19 on approximately 31st of January.
04:21 As long as 21,700 Nifty is holding,
04:24 I don't see a big downside apart from that.
04:26 But if that is broken on closing basis,
04:28 then we can expect a level up to 21,400.
04:30 But today I feel market will be a slightish
04:32 on the sideways front only.
04:34 And moving on to Bank Nifty,
04:36 Bank Nifty has shown some selling pressure
04:40 from the higher levels of 46,300 levels.
04:44 The support zone for Bank Nifty currently lies
04:46 at 45,800 levels, which is 150 and then 80 points from here.
04:51 If that is broken, then we'll expect a downside
04:53 towards 45,500.
04:55 I feel Bank Nifty, there are certain stocks,
04:58 like PSU stocks are still performing okay,
05:00 but the major Bank Nifty stocks
05:02 are not doing that very good.
05:03 - Point.
05:05 In fact, let's jump straight into the questions
05:06 and I will focus on the technical questions at the start
05:10 while we wait for Sunny to join.
05:12 We've got Tushar Kamble from Mumbai
05:14 who is asking about Orient Green,
05:17 which has been doing quite well over the last few sessions.
05:21 Let's pull up the chart and see
05:22 where it's currently trading, Orient Green,
05:24 because he's wondering whether to buy at the current level.
05:28 Is this a good time to enter?
05:29 It's in fact at an upper circuit today as well.
05:32 Oh, very close, yeah, there you go.
05:33 So upper circuit.
05:34 What would you say on the charts?
05:36 So Ayush, no sellers in the stock, only buyers.
05:41 So therefore, would you try to venture into this
05:44 if given the chance?
05:46 - Well, I feel trading is a little limited over here
05:50 because of the upper circuit
05:51 and it is happening since approximately 31st of January
05:55 from the breakout level of 25, now it is steady to 85.
05:57 I'll suggest whoever is holding the stock,
06:00 they should keep it with a trading stop loss
06:02 and the trading stop loss should be around 31.75,
06:06 that is the support zone actually.
06:07 If that is broken, I feel you should exit
06:09 because of the continuous upper circuit.
06:11 We may see a slight replacement in the stock,
06:14 retracement in the stock.
06:15 - All right, next up we're talking about
06:17 Brigade Enterprises, we're seeing an uptick
06:20 in actually the Realty Index itself,
06:22 but Brigade Enterprises as well.
06:24 It's currently up about more than 1.5%.
06:28 This one's from Parag and they want to know
06:30 if this is a good time to enter the stock.
06:33 - Well, Brigade Enterprises is looking good
06:36 at current levels, it has taken the support
06:37 with a boiling up bands, upper band,
06:39 that was at around 1070.
06:41 If you want to enter, if the customer,
06:43 the plan was to enter at this price,
06:45 it can definitely be entered for a short-term target
06:48 coming out to be around 1080, sorry, 1080,
06:53 the CMP, the short-term target is coming out to be 1125.
06:57 If that is broken, then we can expect a rally
06:59 up to 1120 in the stock.
07:02 - I believe we've got Sunny joining in.
07:04 Sunny, thanks as always for taking the time.
07:07 We were discussing Sirma a little earlier
07:09 and Smriti has broken down the numbers as well.
07:11 The stock is under pressure today,
07:13 a little bit of a disappointment.
07:15 What would you reckon that the fundamental analysis,
07:19 or what do you think that an investor should do
07:21 from the long-term perspective based on the fundamentals?
07:24 - Yeah, thanks Alex, thanks for having me on the show.
07:27 Definitely a weaker set of number
07:29 as compared to the sweet expectation.
07:33 However, what I believe is that in a company like Sirma,
07:36 where there are multiple sectors at play,
07:38 so due to some time, due to adverse product mix,
07:41 we may have seen some pressure on the margin
07:45 and the clarity, more clarity will be emerging
07:47 out of the analyst call, which is scheduled today.
07:50 But what I feel from a long-term perspective,
07:52 the opportunities still continue to remain pretty robust
07:55 for Sirma in terms of growth opportunity.
07:58 So entire EMS space is doing well.
08:00 At the same time, we are yet to hear from Sirma
08:03 on a tie-up for PLI-2 scheme for manufacturing of laptop.
08:07 And I'm sure the management is in talk
08:10 with multiple brands to get that contract.
08:12 And once that is in place, I believe FI25 and 26,
08:15 we will see a decent growth
08:18 in terms of profitability and earning.
08:21 So we continue to remain bullish on Sirma
08:23 from a medium to long-term investment.
08:25 - Fair point.
08:27 Let's talk about Tata Coffee.
08:29 Rashida has bought shares at 215 levels
08:33 and they have a general question on mergers as well.
08:36 They're talking about why do companies go for a merger
08:39 like HDFC and HDFC Bank went on,
08:42 and there's Tata Coffee that's gonna merge
08:44 with Tata Consumer as well.
08:45 Sunny, if you could talk about the stock
08:47 and the overall merger strategies
08:49 of these companies as well.
08:51 And what do investors get out of it?
08:52 - And also, let me add to that
08:54 because she's also wondering whether to add more
08:57 of Tata Consumer at this price.
09:00 - Yeah, so Alex, I think the merger issue
09:01 is already in place between Tata Consumer and Tata Coffee.
09:05 So I think until the time merger is over,
09:08 both the stock prices will move in tandem with each other.
09:12 So I don't know right now, I don't have competition
09:14 whether there is an arbitrage between Tata Consumer
09:16 and Tata Coffee at this point of time.
09:18 But ultimately, Tata Coffee will get merged
09:21 with Tata Consumer and the shareholders of Tata Coffee
09:23 will get shares of Tata Consumer.
09:25 Coming to the outlook on Tata Consumer,
09:27 yes, we continue to remain bullish
09:29 on Tata Consumer as a business.
09:31 The reason being that company continue to grow well,
09:34 both organically as well as inorganically.
09:37 And it is one of the fastest growing FMCG company
09:41 in India as of now.
09:42 And if somebody is a long-term investor,
09:45 he can either buy Tata Consumer or Tata Coffee,
09:48 anyway, the merger is already in place.
09:50 And why usually company announced merger?
09:52 So obviously, there are synergies
09:57 between the businesses which can be derived
09:59 out of the merger and that is the sole intent
10:01 for any merger or marriage between the two organizations.
10:05 - Fair point, all right.
10:06 SJVN is the next stock that we're focusing on,
10:09 not doing too much in trade today.
10:11 But I mean, just look at the last month or so,
10:15 it's been a phenomenal story.
10:18 Year-to-date gains of 57%.
10:22 And it's, I mean, I'm losing adjectives right now.
10:26 The question is coming in from Deepankar,
10:28 asking for a short-term and long-term view
10:31 and whether or not it should be bought at the current level.
10:33 Ayush, on the charts, stellar pattern for this,
10:37 I would think, but would you buy at these levels?
10:40 - Well, I would not recommend buying at these levels,
10:42 I feel because the stock has moved up really well
10:45 from last so many weeks and months
10:46 and the weekly and monthly volume in the stock is phenomenal.
10:50 And I feel there can be a little retacement here,
10:54 which we are facing since from 170 levels, it is already 146.
10:58 The ideal buying zone for this stock
10:59 would be around 120 to 130.
11:01 If you get this in this price range,
11:03 I feel that would be an ideal buying zone.
11:05 And for a long-term target, I feel it can zoom up to 175,
11:10 long-term as in one month's target,
11:12 can zoom up to 175 after breaking the previous higher 170.
11:16 And the short-term will be around 160 only,
11:21 because there's a complete,
11:22 there's a resistance at higher levels.
11:24 - All right, next up, we're talking about Yes Bank.
11:27 This one's from GC Prakash.
11:29 They've bought the stock at very high levels at 250.
11:32 The stock is currently trading around 26 rupees.
11:36 Now they want to know if they should continue
11:38 holding onto this and if it'll reach their buy levels
11:43 and what is the time period that they can wait for?
11:47 Sunny, Yes Bank.
11:50 - I'm sorry, I can't share my view on Yes Bank
11:52 being an associate company of SDI.
11:55 The compliance doesn't allow us to talk on any companies
11:57 which are related to it.
11:58 - All right, let's quickly take a technical check
12:01 on this as well.
12:02 How does Yes Bank look on the charts?
12:06 - Yes Bank is looking really positive on the charts.
12:08 And today it has given a breakout of six black pattern
12:11 in its daily, in its 16 minutes in daily charts.
12:14 And I feel that this stock should be holding
12:17 for a target of around 40 to 45 days in the coming months.
12:20 The stock is really positive in all the time frame,
12:22 weekly, monthly or daily.
12:24 Plus it has played well itself
12:27 from above all the moving averages.
12:29 So I feel definitely it should be holding
12:30 for a long time now.
12:31 - All right, Deepika from Delhi is asking this next question.
12:34 Astral Limited is the name of the counter
12:36 that she's looking at.
12:37 And she's bought at levels of 1925
12:40 and she's bought 38 shares.
12:41 Ayush, on the technicals,
12:44 she's looking at both the long-term as well as the short,
12:46 no, sorry, she's looking at a short-term perspective
12:48 for the next three months.
12:49 Would you hold or sell?
12:50 - Well, I would recommend to hold
12:53 because the stock is currently at the support zone
12:55 of 50 day and 100 day moving average,
12:57 which is coming out to be around 1880.
12:59 As long as it is holding 1880 on the closing basis,
13:02 I think you should hold the stock.
13:04 And, but the short-term target and the upside resistance
13:06 is currently paid at 2015.
13:08 So I think once it crosses 2015,
13:11 then only we'll see a bigger value in the stock.
13:13 2015 will be the first resistance
13:15 and 1880 will be the support zone for this stock.
13:18 - All right, next up, we're talking about Ratan India Power
13:22 and this one's from Udit.
13:23 They want to know if this is a good time
13:25 to get into the stock.
13:26 Now, if you look at one year performance,
13:28 it's given over 200% gains.
13:31 Sunny, would you suggest entering
13:33 Ratan India Power right now?
13:34 - So Ratan India basically, again, a thermal power company.
13:39 So there are two plants which are operational in the company.
13:41 One is Amravati Power Plant and one is Nasik.
13:44 So the Amravati Power Plant continue to remain profitable.
13:46 However, the Nasik Power Plant
13:48 is yet to kick off the operation.
13:51 And recently there was, I think, ruling from the NCLT
13:54 that this power plant may be hyped up
13:57 and some new player will be buyer in this company.
14:02 So kind of high-risk, high-return bet
14:04 in case that Nasik Power Plant is divested
14:07 and the only sole Amravati Power Plant
14:10 continue to remain in the company,
14:12 then one can expect a bump up in profit for Ratan India Power.
14:17 So the stock is only for high-risk, high-return investor.
14:21 And one need to be, the allocation has to be proper
14:25 in such kind of name.
14:27 Maybe one or 2% of the portfolio should be the limit
14:30 wherein one can bet on such name.
14:32 - Okay, fair point.
14:33 Gentlemen, do stay with us
14:34 and viewers, do stay with us as well.
14:36 We will take more queries, but after this very quick break.
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17:30 - Welcome back, you're watching Ask Profit.
17:39 And the first question we're taking on this side of the program
17:42 is from V.S. Mohan.
17:44 He's writing in from Talcher and he's asking about
17:46 IndusInd Bank, which he's bought at levels of 1,530.
17:51 Of course, in the recent past, you've seen the stock run up
17:54 because of certain regulatory, or not regulatory rather,
17:59 stock exchange notifications were sent out.
18:02 But there was of course a clarification of the HDFC group.
18:05 I'm wondering, do you have a view on this one, Sunny?
18:07 What would you say for Mohan?
18:09 Should he hold on to this one?
18:11 Sunny, if you can hear me, we're asking about IndusInd Bank.
18:18 - I think one can hold on to the IndusInd Bank
18:21 in a medium to long term portfolio.
18:24 And the bank continue to do well.
18:26 And what we feel is that the fair value of the business
18:29 is close to 1800 rupees over the period of next 12 months.
18:33 So please continue to hold IndusInd Bank.
18:35 - All right, next one's from Amit Rastogi.
18:37 They want to invest into green energy sector
18:40 for the next one to two years.
18:42 Sunny, what are your stock picks within the sector?
18:45 - So again, first of all, a lot of questions.
18:48 So we have already seen a lot of exuberance
18:50 in the entire green energy space.
18:53 So recently one stock which was getting discussed
18:55 was HGVN, again, one of the nodal agency
18:58 for implementing a green energy project.
19:01 So the stock which we like is HGVN, again, REC, PFC.
19:04 So ultimately the power finance companies
19:07 are the one which will get benefited
19:09 because of the green energy project.
19:11 And at the same time, larger players like Adani and Reliance.
19:16 So we have seen a new energy business
19:19 being set up under the Reliance.
19:21 So ultimately that business will see a substantial ramp up
19:25 over the period of next four to five years.
19:27 Adani, we are seeing a substantial ramp up
19:30 in the green energy side.
19:32 Tata Power, again, a Tata Group company
19:37 doing a lot of work on the green energy side.
19:40 Sujlon, again, on wind energy side.
19:42 But again, what we have seen is that
19:44 there is a lot of run-up
19:46 which we have seen during the last one month.
19:48 And maybe buy-on-dip is something
19:49 which one should adopt in his or her portfolio.
19:53 - A lot of long-term queries today.
19:56 And Sunny, I'm coming back to you on this one.
19:58 It's a little long, so pay attention to this one.
20:00 We've got ACE boarded levels of 68,
20:03 Sanghvi Movers boarded levels of 71,
20:06 Escorts boarded levels of 750.
20:09 All of this is from Sagar,
20:10 and he's buying these companies
20:13 in the construction equipment space
20:15 as a proxy to the infraspace.
20:18 Because from his experience,
20:19 and of course what we've seen in the past,
20:21 is that some of these infrastructure companies
20:23 have a significant amount of debt.
20:25 So is it the right approach to have
20:29 to use this as a proxy?
20:31 And what would you say about the companies
20:32 that he has picked?
20:33 - Yeah, that's the right approach
20:36 to ride an infrastructure growth story in India.
20:39 And the company which we like within this space
20:41 is ACE Action Construction Equipment.
20:44 So yesterday evening,
20:45 the company has posted
20:46 the very rock-solid set of numbers.
20:48 So profit has increased to close to 65 to 70 crore
20:52 on a quarterly basis.
20:53 And we are seeing a very strong reaction
20:56 to that in the trade today.
20:58 So for Escort, again,
21:00 that's one of the business division
21:02 as far as the construction equipment is concerned.
21:04 But the contribution to the overall top line
21:06 is close to 25 to 30% only.
21:09 And the majority of the profitability
21:11 still comes from the farm equipment segment.
21:14 So I think the right way to ride this sector,
21:16 if somebody wants to ride
21:17 in construction equipment spaces
21:20 through Action Construction Equipment is.
21:22 - All right, next up,
21:24 we're talking about a recent listing.
21:26 This is from Parag,
21:27 and they're talking about Mufti.
21:29 It got listed in December
21:31 and currently it's up in trade today about 1%.
21:36 From the longer term perspective,
21:39 Sunny, would you have a view on this?
21:41 - Sorry, I missed the name.
21:44 - Mufti, it's a credo brands marketing.
21:46 - Yeah, so credo, yeah,
21:48 so definitely it's a strong brand.
21:50 And recently management has went on record
21:53 to say that the brand has got a potential
21:54 to grow at 15 to 16% CAGR
21:57 over the period of three to five years.
21:59 So it's a typical apparel fashion
22:03 led consumer story.
22:04 The brand is pretty strong
22:05 and company continue to do well.
22:07 So one can expect 15 to 16% of CAGR return
22:12 over the period of next three to five years.
22:14 So that should be the return expectation from the credo.
22:16 And I would recommend to buy
22:18 with an investment or as an offer medium to long.
22:21 - Okay, fair point.
22:22 I'm coming to you.
22:23 I'm sorry to keep you waiting.
22:24 We've got Ramesh from Hyderabad
22:26 who's asking about Max Health,
22:27 which he's bought 25 off at 580 levels.
22:32 And he's wondering whether to add more
22:34 the current market price.
22:35 If not at this price,
22:36 and at what level should he consider accumulating?
22:39 - We keep that so very good.
22:42 It is forming a higher order formation.
22:44 I would say not,
22:45 I would not recommend to buy at this current price
22:48 as this reward is not very favorable.
22:51 770 is the ideal buying zone for this stock.
22:54 Today it has made a loss 799
22:56 and the previous support zone lies around 765 to 770.
22:59 That would be an ideal investment zone for this stock.
23:02 And in the long side,
23:03 I can see a target up to 920 in this stock.
23:07 - All right, next one's from Satya
23:10 and they're talking about RCF.
23:12 They wanna know if this is the right time
23:13 to enter this stock from medium term perspective.
23:17 Now, are you sure?
23:18 Should they wait for a little bit of a correction
23:21 in the stock or should they just go ahead and buy this?
23:24 - RCF can be bought at current levels.
23:26 It has given a breakout of down the sloping trend line
23:28 in its intraday charts as well.
23:30 And it has taken a support of weekly trend line.
23:33 So I think RCF is quite okay to buy now.
23:36 The support zone for this stock is currently placed at 160.
23:41 Once it crosses 175 on the closing basis,
23:45 we'll see a big value up to 200,
23:47 followed by 224 levels.
23:50 - Okay, this next one's also for you, Ayush.
23:53 This is on Birla Soft.
23:55 We've got a question from Vivek
23:56 and he's got a call that he's bought at levels of,
24:00 at a strike of 860.
24:03 What is the strategy that you would suggest that he employs?
24:06 - I feel we should do a trading stop loss
24:09 since I'm a technical analyst,
24:10 I won't be able to give a derivatives call on this.
24:12 - Okay, fair point.
24:14 - All right, we'll take a fundamental question now.
24:16 This one's a longer term.
24:17 This one's from Sid on YouTube.
24:19 They're talking about Rosari Biotech.
24:21 They have bought the stock at 810 levels.
24:25 Now, Sunny, I think they've given a guidance
24:28 of about 10 to 12% revenue growth in FY24.
24:33 Based on all this, how does this look for the longer term?
24:38 Sunny, am I audible to you?
24:44 - Yeah, the entire chemical and specialty chemical
24:48 sector is under pressure.
24:50 And that is purely led by the global demand
24:53 supply environment dumping by the China.
24:55 So what I feel is that, again,
24:57 one need to be very patient as far as the investment
25:00 in any chemical company is concerned.
25:02 And the same applies to the Rosari Biotech also.
25:06 So let us see when the sector,
25:08 I mean the dynamic will change favorably for Rosari.
25:13 So let us, I mean, I would recommend to wait company
25:15 and the business continue to do well in a good scenario.
25:19 As of now, the overall market dynamics are not favorable.
25:23 So it is kind of a hold and let us see whether the things
25:27 are turn out in the next one or two quarters.
25:29 - If I point the last question,
25:30 I use is coming towards you.
25:32 Lavish from Indore is asking about Time Tectoplast,
25:34 which is bought at levels of 184.
25:37 And he's looking for a one year time,
25:38 rather one year target.
25:40 What level would you recommend that he watch for?
25:44 - Well, Time Tectoplast is a really positive stock.
25:46 It has given a good volume as a breakout.
25:49 The charts are looking really positive,
25:51 higher to higher bottom formation,
25:52 well above the averages.
25:54 I feel that the person should definitely hold it.
25:56 If they want to add it current level,
25:58 they should definitely add it.
26:00 There's a big target coming out for this stock
26:02 in the recent time.
26:03 I feel 232 should be there on the charts
26:06 in the coming months.
26:07 And once that is broken,
26:09 we can expect a level of 300 also in the stock.
26:11 The stock is showing a good value
26:13 since quite some levels now.
26:15 So I feel Time Tectonics should be bought at current levels
26:18 and if someone's holding,
26:19 they should definitely hold it.
26:20 - All right.
26:21 Thank you, Ayush and Sunny for joining us today.
26:24 We're unfortunately completely out of time.
26:26 And thanks for taking time out
26:29 and answering so many questions for us.
26:31 And viewers, thanks for tuning in.
26:32 We'll be back tomorrow, same time at 11.30 AM,
26:35 but lots more coming up on NDTV Profit.
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30:24 - Hello and welcome to Earnings Edge.
30:26 I'm Heeral Dhadia and with me is Agam Vakil.
30:29 Clearly if you see, you know,
30:31 three stocks that we are gonna focus on
30:33 in today's year of trade on the back of earnings,
30:36 you have GSFC that has reported numbers.
30:38 We'll be talking to the management.
30:40 Signity Technologies is a second one.
30:42 And thirdly, Jumeirah Realty,
30:44 three from diverse sectors coming in there.
30:47 GSFC is the first one, 5.5% kind of cuts coming in.
30:50 On this counter, and if you see it
30:52 from an earnings perspective,
30:55 overall you have the revenues which have dipped,
30:58 margins have taken a beating,
30:59 and the profits are down 71%.
31:02 Mr. B.D. Nanavati, Executive Director of Finance and CFO
31:07 at GSFC joins in.
31:09 Mr. Nanavati, good afternoon and welcome to the show.
31:12 What's gone wrong this time around?
31:14 Because clearly, you know, you have seen headwinds
31:18 in the external markets which are causing this kind of a dip.
31:22 But how are you seeing the trajectory going ahead?
31:25 Yeah, so subsidy reduction against the rising input
31:30 was the main headwind that stopped in quarter three.
31:36 Most of the fertilizer companies are also
31:38 selling at the same boat.
31:41 But going forward, we expect things to improve,
31:46 not immediately in Q4, but next financial year.
31:49 Maybe post-election, government will take a reasonable call
31:53 on subsidy versus input price,
31:56 and that should help in improving the margin.
32:01 Mr. Nanavati, this is Agam here.
32:02 Can you tell us a little more about the demand environment
32:04 at the moment and how things are panning out in Q4
32:08 and perhaps how things could possibly change in FY25 going in?
32:14 Yeah, so on overall basis, FY24,
32:17 we expect a growth of 10% in fertilizer volume.
32:21 And FY25, we see a growth of 25% in fertilizer volume.
32:28 So we look for a robust demand and our brand value
32:35 and the quality to play around.
32:38 The new plant that has been commissioned in January 24,
32:44 of ammonium sulfate that will help in driving the volume in part,
32:49 and SIGCHI will need 100% production will help in increasing the volume.
32:55 So we are sure to have turnaround in next year.
32:59 Okay, Mr. Nanavati, also a word on your capital expenditure.
33:03 I'm looking at the investor presentation
33:05 and you do have capacity expansion plans on the annual as well.
33:11 Can you tell us about the kind of investments
33:13 which will go into your capital expenditure
33:16 and what kind of expansion, after expansion,
33:19 what kind of capacity can we expect from the company?
33:22 Yeah, so we are expanding HX Crystal project.
33:27 We already have one plant.
33:29 We are setting up another plant that goes for the pharma intermediates.
33:36 There is a plan for setting up sulfuric acid plant.
33:40 Then there is a windmill, I mean solar plant coming for reduction of energy cost.
33:45 And then we have a urea revamp plant for reducing the energy consumption for production of urea.
33:52 So all this thing will be commissioned by 2025 year end.
33:57 And we expect this to cost a thousand crore capex.
34:02 Right. Mr. Nanavati, when you're talking about this 10,000 crore capex
34:06 and the plans that you have, with the performance that we've seen right now due to the external headwinds,
34:13 do you think there could be a delay in terms of spending the capex?
34:18 Because the utilizations could be lower.
34:20 So is there a change happening on that front?
34:23 No, no. As most of the plants are related to fertilizer segment.
34:30 So as I said, we look for 25 percent rise in volume.
34:35 So there is no question of this plant not operating fully.
34:40 So in fact, we expect the plant to run.
34:44 Of course, there are two things problems at the beginning, but then they will stabilize and produce fully.
34:52 OK, so in terms of your ongoing projects, you know, you have the HX Crystal project.
34:58 You also have the 15 megawatt solar project in Charanka.
35:03 Also the Urea 2 revamping project. Can you talk us through the timelines?
35:08 You have mentioned a bit of that in your presentation.
35:11 Can you talk us through how things will pan out out here?
35:16 Yeah, so solar project is expected to be commissioned in June 24.
35:22 And then sulfuric acid and HX Crystal will be coming by September and November 24.
35:30 And Urea revamp will come by February 25.
35:35 OK, so if you have to look at FY 24 and 25,
35:41 what's that milestone expected to look like in terms of top line revenue and margins,
35:47 taking the current run rate into consideration and the additional sales that you will see on the back of the capacities that will come on stream in FY 25 as well?
36:00 So right now we have not found our next year budget in terms of financials.
36:05 So it will be a little early to say top line and expected bottom line for FY 25.
36:15 We'll come back to that once it is finalized. We will have a small call on this.
36:24 Sure. So and finally, a word on debt as well.
36:29 With the plans that you have on the annual, do you think that we could perhaps see that particular component increase going ahead?
36:38 Right now, we are a debt free company and for 1000 crore capex, I don't think we need any debt.
36:46 So our recurring profit and past reserves are sufficient to give us the required funding.
36:56 So but when we come with the larger capex, those are also in the pipeline at different stages.
37:03 I think that will be required, but definitely not anything in FY 25.
37:10 OK, Mr. Nanavati, we leave it at that. Thank you so much for joining us and taking us through this quarter's earnings.
37:15 We wish you the best. Well, on that note, it's time to slip into another short break, but we'll be back with more management.
37:21 Stay tuned. And.
37:36 And.
38:03 And.
38:18 And.
38:44 And.
39:12 And.
39:32 Welcome back, and now we take stock where born signity technology as well.
39:37 We've had earnings from there as well. Let's take a quick look at how the stocks fairing.
39:41 Well, Marjoli in the green for now. So certainly advancing.
39:44 But it's been a little bit of a choppy day of trade for this particular company.
39:48 That said, it does certainly look like a pretty steady quarter where we have seen revenues grow about three point six percent.
39:56 And there is a margin is a largely flattish, you know, barring the marginal decline.
40:01 But let's get in the management of the company. We have Christian Venkatesh, CFO of Signity Technologies.
40:09 Christian, more. Good afternoon. Thanks for joining in.
40:12 Can you take us through the quarter's highlights? What's led to this?
40:16 And what are the expectations? Keeping in mind the pipeline as far as deals go for this particular company?
40:23 Good afternoon and thanks for the opportunity.
40:26 It's been a pretty stable quarter considering the economic environment and maybe about a couple of quarters back as to what we envisaged.
40:35 I think we will still our strategy in terms of working with strategic and growth accounts,
40:41 categorized and putting our efforts into these directions and also coupled with that on the digital transformation has helped us consolidate the positions.
40:49 While the growth has been a margin at about three, three and a percent.
40:55 But I think on the client points, I think still we have one about nine clients during the quarter,
41:01 which is always a muted quarter with Thanksgiving and New Year and the decision making getting deferred.
41:06 So that is one thing. And then our strength has been within the top 20 clients and the top 50 clients continuing to contribute in a bigger way for us.
41:14 And which has been our strategy in terms of trying to push through and focus and garnering and winning a sizable pie through these larger clients.
41:25 That is one thing. Having said that, I think on the margin front, we are while we anticipated the margin to move up,
41:32 it would have been at about 14.9 percent on a normalized basis.
41:35 But I think as a one off expenditure on legal, we had to spend on certain employee separations.
41:41 And that was essential and necessitated for us to get it out of the books.
41:45 And that settlement took a toll. And we are fine with that.
41:50 But we know that for sure that will bounce back and we're trying to improve on the margin front overall for the year to look through.
41:55 Basically, I think the three quarters have been a progressive quarter,
41:58 but I think the quality of the revenues and the consistent and the stability and predictability has increased beyond the level.
42:05 And while we anticipated that, we initially anticipated that we should do as a CAGR of average of about 20, 22 percent over the next four years.
42:15 I think that took a setback during the current year where the growth could be in the region of about eight to 10 percent comparing to year over year.
42:23 For the reasons in terms of the client deferrals and the economic environment.
42:29 I think bearing that instance, probably I think we are optimistic and we are running at the while we'll be able to sustain and maintain the EBITDA.
42:38 In spite of all this one off expenditures to the last year levels in terms of trying to get there.
42:44 But I think the efforts are on basically to improve it in the next year.
42:48 We have just concluded the strategic discussions in terms of how much do we grow and what are the areas to focus and where we would move ahead with respect to the EBITDA in the coming financial year and there on.
43:00 Right. Krishnan, Hiral on this side. One question I want to take with you on the margin front is clearly you have a strategy where you've actually started removing the lower negative margin customers
43:12 and high margin ones were on boarded as well. Now taking that into consideration, the margin profile is still in that 12 to 12 and a half percent range.
43:22 How long do you think it will take you to get back to that 20 percent mark, which we have seen in the past?
43:29 Yeah, I think in the in the peak history of the company, we have been there at about 17 percent and currently we are hovering around 14 percent, which is about 13.8.
43:37 If you look at it on the EBITDA, I'm talking about you're talking about a bit probably I'm talking about the EBITDA.
43:42 At the EBITDA level, probably we are measured we are there at about 13.8, 14 percent.
43:49 We are, as I told you, that we are taking extra precautions on the process front in terms of the businesses so that we don't slip out on this one off expenditure.
43:57 But I think we are pretty confident that we'll be able to get to the 16 percent in the coming year.
44:02 That's a target in terms of taking a strong growth coupled with all this digital engineering and with the optimizations in various areas, what we are trying to look through.
44:13 I think we should be there at about close to 16 percent plus.
44:17 If you ask me honestly that whether we'll be there at about 20 percent, the whole idea in terms of 2028 to reach the original plan was to reach to a billion dollar and move north of 18 percent plus to be there at about 20 percent or so.
44:29 Is there that's a target where we will have completely the digital engineering space contributing about 50 percent and 40 percent from the quality engineering space.
44:37 That's a target and it's a step by step target. But I think for sure in the coming year, we should be there with the margin.
44:42 I think we have a good point that we are trying to eliminate all the low margin yielding accounts.
44:48 And even in this year and during this quarter and the coming quarter, we are eliminating few of the accounts which should give a thrust for us in terms of enhancement in the margin.
44:57 Right. Krishan, in terms of the various segments in the clientele that you do cater to, where is it that you are seeing most amount of traction?
45:06 Now, I understand that banking, financial services, at least for the industry, it's been a challenging environment.
45:14 But how are things panning out out there and how are things panning out when it comes to your airline segment for that matter, communications and energy and utilities?
45:23 Can you talk us through this?
45:25 Yeah, absolutely. Fine. So if you look at banking, finance and insurance, as a sector, if you look through very clearly that when the sector has been shaky,
45:35 I think we are trying to be we are trying to position ourselves very clearly with respect to few of the banks trying to be very clearly with them in terms of as an integrated partner.
45:45 So with that being the case, basically, we have not seen challenges because we have not gone out and all and sundry to pick up the entire business,
45:53 which is coming through the segment. We have been selective. We have been careful.
45:57 We are trying to get through using our tools to be a strategic partners with respect to these large banks and a few of the insurance companies.
46:05 I think it's a very measured thought process, which we are doing. The traction, what we've seen, though, on the though there have been toughness in the market,
46:13 probably is on the retail and retail as a segment. Basically, I think we are trying to we are contemplating with the idea as to how do we give a thrust to that?
46:26 Basically, because there's a lot of traction, which we have seen that as a segment.
46:29 And then we expect a few positive surprises to come through in that segment, which will come out at the right time.
46:36 If the kind of negotiations what we're trying to do and that that sector could yield us a sizable chunk of revenue.
46:43 When it comes to travel and hospitality, I think the sector has bounced back.
46:47 There is a principal travel, which is taking place as we have measured clearly the segment, which is which took a hit during the corona and post corona.
46:56 But I think it has bounced back clearly on that segment in Maydaybury.
47:00 If you look at for us as a segment, I'll come back to the energy sector.
47:04 But I think the energy sector contributes about close to 12 percent of the revenue while the BFSI retail and the health care segments all put together contribute about close to 70 percent of the revenue.
47:18 We see a huge traction in the health care as a sector because we work with medical tech companies and we are massive out of trying to do the quality engineering on the medtech devices.
47:31 And then that is one thing which is leading to a cross selling of business for us.
47:36 So I think we are optimistic on that as a segment.
47:39 Having said that, probably we are trying to focus on a couple of segments, especially to lead it as a driver to contribute about close to 60 percent of the business.
47:47 And which is what could be the strategy coming through in the current year.
47:50 And one could be one is positively on the retail side.
47:53 And the other one is that we are trying to get through to BFSI as a specialization to contribute about 60 percent and then focus on the rest at 40 percent.
48:03 Coming back to the energy and utility sector, there has been a lot of consolidation in the energy and utility sector.
48:08 We did feel the pressure while the business has been contributing to about 12 percent or so.
48:17 But I think the pressure on these sectors basically and their consolidations definitely has stagnated growth while there is potential.
48:26 But I think there is a stagnation.
48:28 Right. I think these are a few segments that one will be watching out for as well pretty closely in trade.
48:34 Thank you, Krishna, so much for joining us on the show.
48:36 Completely out of time. But clearly, overall, if you see in terms of the stock performance as well, last one year, around 70 percent is the kind of returns that we've seen on this counter.
48:46 Let's quickly slip into a short break. Up next, we'll be joined by the management of Ajmera Realty.
48:50 Yesterday, post earnings as well, the stock was seeing double digit gains today as well.
48:54 If you go to see in terms of Ajmera Realty, positive momentum is what is expected to continue.
49:00 Please stay tuned.
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50:51 Welcome back to Earnings Edge.
51:03 And we now take stock of Ajmera Realty. Well, we have Dhaval Ajmera of the company who's joining us on the show right now.
51:12 Dhaval, thanks for joining in. It doesn't certainly look like a very, very strong quarter for you.
51:18 And we've seen good volumes, not just for the company, but also for the industry in general across.
51:24 Can you tell us about the current business environment, the kind of inventory that you hold at the moment if all of it is gone?
51:32 And well, what sort of projects are we looking for and forward towards going in to this, not only this quarter, but also in the next financial year?
51:41 So, you know, we've we've had a great run through this quarter with this was being our best quarter in the last decade.
51:49 Overall, the company has been doing pretty well.
51:53 We are working for a target of 5x growth in our company.