- #Hindalco's stock is under pressure on account of #Novelis' earnings
- What's next for shareholders?
Get all your stock-related queries answered by our technical and fundamental guests with Smriti Chaudhary on Ask Profit. #NDTVProfitLive
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TVTranscript
00:00 That's down 3 percent after this.
00:03 There's Adani Enterprise and Divis Lab that's losing less than 1 percent in trade today.
00:09 If you look at the broader markets, Nifty Mid Cap is kind of trailing the index right
00:16 now.
00:17 It's up only two-tenth of a percent, but Nifty Small Cap is in red today.
00:21 It's down four-tenth of a percent.
00:24 If you look at the sectors now, we have Nifty IT that's on the losing end today.
00:30 We saw some gains in the Nifty index yesterday, but that is all lost today.
00:37 Other than that, we have Nifty Metal that's down over 2.5 percent in trade, some pressure
00:42 there.
00:43 We have Nifty Realty also down about eight-tenth of a percent.
00:47 And if you look at the sectors that are gaining in trade, we have the Nifty PSU Bank that
00:54 saw some – it saw in the last couple of days, but is up in green today, a tenth of
00:59 a percent.
01:00 Other than that, we have Oil and Gas Index that up six-tenth of a percent in trade.
01:05 So that's – and Nifty Energy as well, up about eight-tenth of a percent in trade.
01:11 That's where we currently stand on the markets.
01:14 But the focus for today will be Hindalco.
01:18 But before that, let me introduce you to the guests for today.
01:20 We have Rohan Mehta of Total Wealth and Nirav Chheda of Nirmal Bank Securities joining us
01:26 on the show today.
01:27 Welcome, Rohan and Nirav, and thank you for taking the time out.
01:31 Now before I get into the questions, let's talk a little bit about Hindalco.
01:35 Now, we are yet to see the results.
01:38 It's due today.
01:40 But yesterday, its subsidiary, Novelist, came out with its results.
01:43 Now, the results were fairly okay, not a bad set of results.
01:48 However, there was a CAPEX increase.
01:52 That was by 64 percent.
01:55 If you look at the specific numbers, there is a CAPEX in BayMinet project, which was
02:01 budgeted for $2.5 billion.
02:03 However, the company said it's going to increase to now $4.1 billion.
02:08 So that's a substantial increase, which is why we're seeing brokerages also coming
02:12 out and saying that they are changing the guidance.
02:16 Now, one of them, Kotec, if I'm not wrong, downgraded the return guidance from project
02:21 to double digits from mid-teens.
02:24 So that's where we currently stand.
02:26 Now, Rohan, I'd like to come to you first on Hindalco.
02:29 We're going to see some impact in the results today as well.
02:34 But on what we have right now, what kind of impact do you see?
02:38 And do you think this is going to hurt the company in the longer term?
02:42 You see, I believe that we have seen Hindalco from last eight, nine years.
02:48 Every time we have been bullish on the company and something or another comes to us, maybe
02:54 the international company, the subsidiary, and then maybe the Indian Arm, something other
02:58 than that comes on with the margin now to be a single digit margin and the things which
03:03 are happening around.
03:04 There are certain things which are beyond our control.
03:07 Maybe Hindalco, somewhere along, it needs a rebalance onto the management side and new
03:12 strategy to do the business.
03:13 That's what we can expect because it was at good profit with 13,000 crores and again,
03:18 you know, diminishing profit to now 8,400 crores BTM profit.
03:22 And then, you know, whatever the, you know, new buying is happening, new capex has happened.
03:26 So all things look very clumsy.
03:28 So that point from last 2022, we've been out of this, you know, stock because nothing new.
03:35 So we will wait for some management changes and then we come forward for that.
03:39 We believe that the strategy of the company is somewhere hitting onto the, you know, into
03:44 the margins of the company.
03:46 So yeah, for the time being, we would be out.
03:49 All right.
03:50 Let's take a quick technical view from Nirav as well.
03:56 We have some viewers who have already bought into Hindalco and specifically we have a viewer,
04:02 Rajesh Maheshwari, who's bought the stock at 458 levels.
04:06 The stock is down 14% in trade today.
04:08 What kind of strategy would you suggest Nirav from a short to medium term perspective?
04:13 Yeah, so see on Hindalco, you know, looking at the overall chart, there was a breakout
04:21 around the 500 odd levels, which it has come to retest now.
04:27 It was on the verge of a long term breakout above the 625, 650 levels, which it couldn't
04:33 get.
04:34 But now, you know, the previous breakout has been retested.
04:37 I believe it can probably take another three, four days around the same area, but this is
04:42 a very good support area.
04:44 So you know, in between 500, 490 is where you look to average out, even though you bought
04:49 at 450 odd, I think this would be a good area to buy again.
04:55 So keep a stop loss of around 475 for your loans.
05:00 Believe that again, you know, the 600, 620 scale will be regained and this stock can
05:06 pretty much reverse from current levels in the next five, six days, the process should
05:12 start.
05:13 Right, so you're suggesting that this is a buying opportunity, Nirav.
05:18 So okay, let's move on to the queries now.
05:22 Now we have a specific query on vintage coffee.
05:24 I'm going to come to you.
05:26 Rohan, would you have coverage on this stock?
05:29 Vintage coffee.
05:30 All right.
05:31 Nirav, I'll take this one to you.
05:34 This one's from Omnil Sawant from Karwar.
05:38 They have already bought in.
05:40 No, they're asking if this is a good time to buy the stock.
05:43 So based on the charts, would you suggest entering the stock right now?
05:46 This is for a shorter duration.
05:49 Yeah, so I'll just take a minute or so to find the stock.
05:54 I cannot even find the stock at this point of time.
05:57 Just a second.
05:59 Okay, so it's only in BSE and this is one stock, you know, I think it has a 5% circuit
06:06 limit, in fact, a 2% circuit limit.
06:09 Very difficult to really judge on the technicals for this stock.
06:13 So, no, I would not like to give any view at this point.
06:17 Okay, all right.
06:19 Next one is from Muralidhar Kalidasu from Hyderabad and they're talking about Tandla.
06:25 Now, Rohan, this, I think this is for the longer term.
06:29 They are in a loss.
06:30 They bought the shares at 1179.
06:34 The currently the stock is below that around 978.
06:38 Would you suggest, we're talking about Tandla and would you suggest holding on to this one
06:44 for the longer term or is it better to get out of the stock?
06:47 We have been into Tandla, understanding Tandla with the technology we have and they have
06:55 and they have done decent enough in last, you know, 4 to 6 months with profit at near
07:01 to all time high, that is 538 crores and this quarter also was at all time high, near to
07:07 all time high profit with this quarter.
07:09 I would suggest to hold on to the company.
07:11 I think so still there is a value left out in the company at 13,000 crore of market cap.
07:17 Nothing much to lose in this.
07:18 All right, fair point.
07:21 We have another question from Rajesh D. We have already talked about Hindalco, but he's
07:27 talking about two other counters which is REC and HPCL.
07:31 Now, this is for the short to medium term outlook.
07:34 Nirav, we've seen some pressure in the likes of REC, HPCL, PSU, PAC on the whole, but what's
07:42 the short to medium term outlook for these?
07:45 Would you suggest holding on to these two?
07:47 Definitely, you can hold on to HPCL.
07:51 A long term breakout has come in this stock and this stock is only going to head higher.
07:56 This is just a short term correction that is taken shape.
07:59 It's a good support around 480 odd levels, which it has retested.
08:04 So definitely believe HPCL can now bounce back up above the 550 odd levels.
08:09 Your first target would be around 550 from a near term perspective.
08:13 You can continue to hold with a stop loss of 480.
08:17 For REC, it can take a little longer.
08:19 So I would just suggest, if it comes up towards your cost, you can probably exit this counter
08:26 because it has seen a very huge run up from some 120 odd levels up to those 500 odd levels.
08:35 So definitely some consolidation should go on.
08:38 So I'm not very sure about REC.
08:41 Probably in the near term, it will not do much.
08:43 It is better to move on from this one to another oil and gas stock named ONGC, which I believe
08:51 can do very well.
08:53 All right.
08:54 Next up, we're talking about India Bulls Housing Finance.
08:56 The question is coming from Raja.
08:59 And they want to know if this is a good time to enter the stock.
09:03 Rohan, from a long term perspective, now India Bulls Housing Finance, what's your view on
09:08 the sector as a whole?
09:09 And do you think the stock or the company aligns with that sort of growth within the
09:15 sector?
09:16 First of all, there has been a lot of issues in this NBFC.
09:22 Now, there are two perspectives to this.
09:25 One is that if an investor feels that, you know, I want to buy something, you know, thrash
09:29 town company and then that is the reason I want to go forward for India Bulls and that
09:33 can be a turnaround story.
09:35 I don't find any turnaround story as of now.
09:38 But you know, this could be a story to buy out.
09:40 Whether I would really go forward for there are a lot of good companies available at great
09:44 valuation in NBFC coming to companies like Home First or coming to companies like Credit
09:51 Excess, Gramins, which are really very doing good with a very, very good management and
09:55 very lesser NPA ratios.
09:58 So we would focus rather more on the companies that are performing better than the company
10:02 which may or may not.
10:03 All right, fair point.
10:06 These are the alternatives by Rohan within the NBFC space that you should look at.
10:13 Next up, we're talking about South Bank.
10:16 Now Gunasekaran from Tamil Nadu has already bought in the shares at the average price
10:22 of 38 rupees.
10:24 South Bank shares.
10:25 Nirav, from a short to medium term view, how does it look on the charts?
10:30 Yeah, see, most of the PSU banks, you know, I feel they still have a long way to go.
10:40 Even this stock has given a very long term breakout.
10:44 So post 2017, this is the first time this stock moved above that 35 odd levels.
10:51 So on the line chart, definitely believe it is now at a very good support area of around
10:57 32 to 30.
10:58 It can probably remain in this area for the next couple of days or so.
11:03 But then I believe, you know, this stock should pick up pace and should move up towards those
11:08 50 odd levels.
11:09 So definitely hold on.
11:11 You can add more positions at current levels.
11:15 The volume profile of the stock is also very good.
11:16 And it's a rounding formation breakout.
11:18 So that's another very good sign for this particular stock.
11:21 So definitely hold on to it.
11:23 You can keep a stop loss of around 26 for long term, short to medium term perspective.
11:28 All right, fair point.
11:30 Next up, we're talking within the chemical space.
11:33 Now this is Viniti Organics and the questions coming from Krishna Kumar from Kochi.
11:37 Now Rohan, for the three years period, they bought the stock, but they reduced it in September.
11:45 And now they want to know if this is a good time to enter again and accumulate the stock.
11:52 Within the space, we have seen some headwinds in the chemical space in the past.
11:56 But do you think that's where we're past that now?
12:00 See, still, I believe chemical is not into the space of, you know, accumulation.
12:06 Things are yet not the worst which we have encountered because the demand has been sluggish.
12:11 Though we had seen certain companies with the pharma demand has been remounting, because
12:16 nearly about 30-40% of specialty chemicals are with pharmas.
12:21 So I would really suggest to wait for the time and wait for the things to get cool off.
12:27 So I believe still the pain is there.
12:29 Maybe it will take more than a year to go forward for picking up the pharma companies.
12:34 We have seen most of the pharma companies from 2021 till today has been consolidated
12:40 in structural range and the numbers have not been brilliant.
12:43 So yeah, sell from my side, not an accumulation zone at all.
12:48 Fair point.
12:49 The pain may not be over for the chemical space.
12:53 But it's time for a short break now.
12:55 We'll take more questions on the other side.
12:58 Stay tuned.
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17:02 Welcome back.
17:03 You're watching Ask Profit.
17:04 Now without wasting any time, we'll quickly dive into the questions.
17:08 They're boring questions.
17:10 But if you haven't written to us, you should write to us on the WhatsApp number that will be on your screen.
17:16 I'm also tracking the YouTube live chat so you can write to us there as well.
17:20 Now, this one's for you, Nirav.
17:23 We have a question from Hemant Kumar and they're talking about futures, ITC and Britannia futures.
17:28 And they want to know if they're going to recover anytime soon.
17:30 They say they've seen some downturn in the ITC futures.
17:33 What would you suggest to, how would you suggest playing this?
17:38 So ITC has witnessed a breakdown, a very important breakdown at that, around that 430 odd levels.
17:48 And post that, you know, the nearest support that comes in is around 380 to about 360 odd levels.
17:56 So at this point of time, there's still some downturn likely for the stock, another 5-7% downside is likely.
18:04 So, you know, probably if you can hold on, then, you know, you can hold on till those levels or it would be a good idea to exit the counter and then, you know, look to buy around the 360-380 band.
18:17 For Britannia, I feel, you know, the selling seems to be over.
18:22 There is a likelihood of a bounce up to 5,180, 5,200 odd levels.
18:28 Once that bounce comes in, exit the counter.
18:32 Overall, you know, don't see much upside even in this counter.
18:35 It should remain largely in range of about 5,200 and about 4,950 in the next few days.
18:41 So it has hit the lower band. Now, you know, it is time for the upper band to be hit.
18:46 Right. Now, next up, we have a question from Jana Somic and he's written to us on YouTube.
18:52 This one's for you, Rohan.
18:54 They say that they bought NHBC, NBCC, IOCL, but they've sold three of them.
19:00 And now they want to know if they should re-enter these stocks.
19:04 Now, Rohan, I want you to explain to the viewers, especially from the longer term perspective,
19:08 what happens is when you're holding these stocks and there's a bit of a downturn that kind of goes on for a couple of days,
19:14 a bit of panic sets in and even the long term holders also start selling.
19:21 And then when the cycle turns, they think that they should start buying again.
19:26 What would you suggest in these cases and specifically on these three stocks as well?
19:31 Yeah, I'll tell you my 17 years of experience that if you try to be smarter than markets,
19:36 market teaches you that you are not smart enough.
19:38 So you lose your stocks, you know, one, two times you could be smarter.
19:42 And then one fine day the stock rises and you know, you don't have anything in your account.
19:46 Now, I think so, you know, it depends on what are the objectives of an investor.
19:50 If you're a very long term investor, I don't think so.
19:53 It matters because you have to understand that in classic bull market where the stocks are outperforming,
19:59 there will be 15, 20 percent or maybe 30 percent down a dip.
20:02 And then again, the stock rebounds.
20:04 You can see the cycles of next, you know, from last 200, 300 years of financial markets, it would be the same.
20:10 So you have to understand that you will not be able to carry the top and carry the bottom.
20:14 Just focus on the numbers of what orders they are posting and the business they are carrying forward.
20:20 And if you're seeing great growth, then you may see some downtake also.
20:23 So that's the part and parcel.
20:25 And what else if you can't see, there are stocks which are available at a low beta stocks, which can be there.
20:30 So talking to NHPC, IOC and, you know, BPC and whatever the cluster what we are talking,
20:36 I believe still there is a lot of steam available in the companies, available at still at 5 times, 10 times of valuation,
20:42 huge growth perspective, very focused now, government is on to the government companies.
20:48 So on all that aspect, I believe that, you know, the stocks can do much more better than what we have got.
20:53 And if you specifically talk of IOC or BPC, LHPC and maybe OMC companies,
20:57 still they are coming out of 17 years of their, sorry, 7 years of their consolidation and NHPC have come down
21:03 after 15 years of their consolidation.
21:05 So I think there are a lot of value out over here.
21:08 If you're getting a deep out of it, I think so if you're a long term investor, you should go forward.
21:12 All right. Fair point. Thanks for the explanation, Rohan.
21:16 As a long term investor, you should not worry about the downturn and upturn in the markets that are,
21:23 that usually last for a few days. But moving on to the next one, we have a question from Naman Deora.
21:28 They're talking about two stocks here.
21:30 Zensa Technologies that they bought at an average price of 563 and Traction that they bought at an average price of 110.
21:37 Now, Nirav, they say that they bought it from a perspective of six months,
21:41 but they are now willing to hold on a little bit longer.
21:44 So based on the charts, how do these two look and what kind of targets that you can tell us for these two?
21:54 So Zensa Tech, you know, it had witnessed a good breakout around the information breakout,
22:00 but it couldn't sustain the same and it has come below the breakout again.
22:05 So, you know, from a six, eight month perspective, I think, you know,
22:09 it can take good support around that 480 odd levels. It can probably come to that.
22:14 You can average, you know, at those levels.
22:17 And there can be some very good targets that can come in in this stock once that, you know, 550 is broken on the upside again.
22:25 So 800 is what I'm looking at at this point of time from a six month perspective.
22:31 But the first thing near term, it should come down to 480.
22:35 So hold on for that level. From the other stock, I think Traction, right?
22:42 So for Traction, there is a channel kind of a formation breakout and the breakout is being retested again.
22:53 The breakout was around 98 odd levels and that has been retested now.
22:58 So it might take a couple of weeks for this stock in the same area, but I believe this stock is headed higher.
23:05 Volumes have grown as well as the breakout came in.
23:09 So the breakout is being retested. It can now go on towards those 135, 140 odd levels.
23:15 And from a six month perspective, probably 160 plus is what I'm looking at.
23:20 But yeah, definitely you can hold on to both these stocks and average both these stocks at current level and on some dips for Zainzaq.
23:30 And yeah, good 50% upside from it.
23:34 All right. Thank you so much, Nirav and Rohan for joining us. Unfortunately, we are completely out of time.
23:40 And viewers, thanks for tuning in. If we were not able to answer your questions today, we'll be back tomorrow at 1130 a.m.
23:48 And we'll take all of them tomorrow. But lots more coming up on NDTV Profits. Stay tuned.
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