• 10 months ago
India Market Close | NDTV Profit

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00:00:00 while 46 counters on the Nifty 50 were trading weak. Like I said, the breadth improved substantially
00:00:06 with a very clear bias now in favor of advancing stocks. Well, that's the picture and what
00:00:11 a beautiful turnaround in terms of what we saw. I'll start with the losers first because
00:00:15 we'll get those out of the way. Tech is in a weak spot today largely because of the fact
00:00:21 that the US has seen a delayed rate cut. It also means slower spending picking up from
00:00:25 that part of the world. And that is one reason why you're seeing IT sulk in trade. Tech Mahindra
00:00:30 Info says LTIM are all trading with a negative bias. In fact, cuts anywhere in the range
00:00:36 of 2 to 3 percent each. Supply is looking weak. So is Dr. Reddy and so is Sun Pharma.
00:00:42 Bank as well has a mixed trade. But I'll take you to that in a minute. OMCs are seeing a
00:00:47 very smart up move. In fact, BPCL was one of the few gainers in the first few minutes
00:00:51 of trade this morning. It's only built on to those gains as we've seen the day go long.
00:00:56 BPCL is up 6.5%. So upstream and downstream, both spaces in the oil and gas pack are having
00:01:02 a good day. ONGC is up 3.5%. BPCL trades with a gain of 6.5%. Coal India also looks good.
00:01:09 Ariel is up about a percent. Stock of the day from the Nifty 50 could also be SBI. Very,
00:01:15 very sharp up move coming in there and that could be one reason why you've seen Bank Nifty
00:01:20 as well perform quite well as we see it. Kotak Manju Bank also looks good. ITC consolidating
00:01:25 after seeing some weakness all through last week. Adani Group companies were in focus
00:01:30 on back of those upgrades that came in between yesterday and this morning from Moody's and
00:01:34 Jeffery's. Those counters, that news point clearly holding some of those counters higher.
00:01:40 But Harsh, it's a very interesting day. We started off below 21,600. We've recovered
00:01:46 well. The broader markets are performing, but it is upstream and downstream companies
00:01:51 that are gaining. So I don't know whether this is a fruit play anymore. Well, yes, absolutely.
00:01:54 You covered a key piece that I wanted to cover, Samina, but in covering upstream and downstream,
00:01:59 so some of those companies in focus, they're doing well in trade today. But outside of
00:02:03 that, let me quickly take it to some other newsmakers. One is you have the likes of Paytm,
00:02:08 HDFC Bank, both of those in focus. Paytm down 10%, HDFC Bank, you had a Bernstein not come
00:02:15 through. No change in target price, but they have suggested that there were certain pressing
00:02:20 questions that they had to ask and that stock is 1% lower in trade, continues to tumble
00:02:26 a bit. In terms of M&M as well, you're looking at the numbers which have come out and not
00:02:32 much of a reaction on the stock price, though. We're looking at Z as well. You know, a soft
00:02:38 set of numbers, commentary being strong, you know, and the market really giving it a thumbs
00:02:43 up of sorts, 6% higher on Z as we speak. In some of the broader market names that we have,
00:02:50 you have the likes of an Eris Life, which is down around 5.5% on the back of one number
00:02:57 second the acquisition that they've announced. 6.5 thousand crore odd acquisition is the
00:03:02 cost of the acquisition, quite a large one at around four times sales. Quickly moving
00:03:07 on, you have also got PSU names, NALCO, NBCC, both of those in focus up and away in trade,
00:03:15 both of those on the back of numbers. You have within the private space, MTAR Tech,
00:03:20 if we can pull up a Nuvama and Aluvalia contracts, all of those also churning away. MTAR, of
00:03:26 course, 11% down, but Nuvama and Aluvalia are doing very, very well in what has otherwise
00:03:33 been a tough day of trade at least till now, Samina. Yes, Harsh. It's been an interesting
00:03:38 day of trade. A couple of more to add to those gainers list. Reliance Infra, if we can quickly
00:03:43 pull that one up on the screen, you will see what the stock is getting up to as we see
00:03:48 it very sharp up move coming in, not Reliance Industries, Reliance Infra is what I would
00:03:54 like to see. I think it's up about 12% when I last checked. Well, Dilip Bilkon, that's
00:04:00 the other one, reported earnings. The markets want to please initially, but now what we
00:04:05 are seeing on Dilip Bilkon is up about 15% odd. Walcott has reported earnings. They have
00:04:10 reported a net loss of 86 crores. But very quickly, let's cut across to the M&M press
00:04:15 conference. It has been an exceptionally good quarter for M&M. Anish Das, CEO of M&M is
00:04:22 addressing the press. Uptick in the sustenance overall price based
00:04:27 on OTPP's investment, offset by the impairment that we have taken by trucks and buses. So
00:04:33 those two numbers offset each other. On a net basis, it was a 693 crore benefit last
00:04:39 year. So without that, profits up 34%, revenues up 15%. On a year-to-date basis, the corresponding
00:04:46 numbers are 33% from a consolidated profit standpoint and 17% from a revenue standpoint.
00:04:54 So as we think about a strategy that we had outlined, there were three main parts to it.
00:05:06 And here is an overview of how we have done on each of those three parts. Auto and farm,
00:05:11 we talked about capitalising on market leadership. And what you see there is a significant growth
00:05:19 in profits of 49% despite the challenges in farm. And this is based on market share gain,
00:05:26 on margin performance, on brand investments, on launch of new products. And more than these
00:05:32 numbers, both businesses are positioned extremely well with the product cycle that they have
00:05:37 and the products that have been launched and that are going to be launched.
00:05:43 Tech Mahindra and Mahindra Finance, you do see the negative number. I talked about the
00:05:48 Tech Mahindra challenges and the turnaround that has been initiated. Mahindra Finance
00:05:53 saw some significant gains last year from right backs as the GS3 numbers came down significantly
00:05:58 last year. This year we see some improvement in the GS3 number, but at 4% now, they will
00:06:04 be more or less flattish over time. You are not going to see as much of an improvement
00:06:08 down from 4% to 2% or 1%, as you would have seen from 6% to 4% or 10% to 6% in the years
00:06:14 prior to that. And therefore, that is a year-over-year impact which does impact performance, but
00:06:20 the business is on a very solid track right now and you have seen that in the numbers.
00:06:25 Sequential NIM is up, credit costs are on track and a number of other activities we
00:06:31 talked about from a technology standpoint, data standpoint are moving very well. So it
00:06:35 is a business that is very well poised on the turnaround path that we had set it for
00:06:39 a year and a half ago.
00:06:41 And growth gems, again we see a good number in terms of the profit growth, 3.3x, but to
00:06:47 be frank that is not a number I am worried about too much. Growth gems is about creating
00:06:51 significant value on a longer term basis and by longer term I mean three to five years.
00:06:56 We have set a target initially for growth gems to get close to a billion dollars of
00:07:00 market cap and then grow 5x in the next five to seven years. So that is what we are looking
00:07:06 for from the growth gems and we are seeing a number of positive movements there and we
00:07:12 will see more of that over the next quarters to come.
00:07:18 So I would finally say consistent delivery on our commitments. We have talked about delivering
00:07:24 18% ROE. Year-to-date we are at 19% right now. We have talked about 15% to 20% EPS growth.
00:07:32 If you look at the last two years, CAGR is 40%. I am ignoring F21 because that was a
00:07:37 low number. The CAGR obviously would be a lot higher if you take that into account,
00:07:41 but if you just look at the last two years it is a solid 40% CAGR. Therefore, businesses
00:07:46 on a soundtrack, I would invite Rajesh to take you through details on performance in
00:07:52 the auto and farm sectors and Munroj will then close it with a brief overview on the
00:07:57 financials in addition to what I just covered.
00:07:59 Rajesh, over to you.
00:08:00 Thank you, Mr. Nisha. It's been a spectacular quarter for M&M. Of course, we will be connecting
00:08:09 with the management shortly and they can talk to us about the way ahead for the company.
00:08:13 Well, M&M in terms of the stock reaction is fairly muted, not doing too much as we see
00:08:18 it. But let's go across to Ajit Mishra, SPP Research, Relic Air, Broking and Vineet Bulinkar
00:08:25 of Ventura Securities. Thank you, gentlemen. Thank you very much for joining us. Ajit,
00:08:29 I'm going to come to you first on the index. I mean, what a smart recovery. We started
00:08:33 off sub 21,600 and have recovered so smartly. 21,756.60 is what it trades at. How are you
00:08:42 positioned on the Nifty at this stage?
00:08:44 Yeah, good afternoon, Samina. So, Samina, honestly, after seeing the crack in the US
00:08:51 market last night, I'm sure the participants must be like praying for a decent close or
00:08:57 a gap damage in the markets. But the way we have rebounded, especially through the banking
00:09:04 heavyweights, is something that indicates that both are like trying to hold this short-term
00:09:11 average 20 EMA somehow. The good part is banking, which is the main culprit in this entire underperformance,
00:09:22 is also participating and witnessing decent recovery. So, we feel that as long as we are
00:09:28 holding on this mark 21,600 on a closing basis, the stone is likely to remain sideways, but
00:09:34 with a positive bias. And the same holds true in case if the banking also holds this 45
00:09:41 EMA. So, we are largely focusing on stock-specific approach instead of focusing on the index
00:09:48 because it's very difficult to trade in a market like this, especially when we are seeing
00:09:53 swings on both sides of the market two, three times during the day. So, among the sectors,
00:09:59 we feel IT, if we exclude today's session, rest of the time we have seen strong performance
00:10:09 from the IT majors. And auto, pharma, selectively, yes, one can look at these names also. So,
00:10:17 index I feel, yes, the close is positive, but we need to see whether we manage to sustain
00:10:22 these moves or not.
00:10:24 Right. Vineet, coming on this, this morning it seemed, or rather not just this morning,
00:10:29 the last couple of weeks it seems like lack of local triggers have led the markets to
00:10:35 be very sideways. We have seen stock-specific reaction coming to earnings, but it's not
00:10:39 lasted too long or extended it to the broader markets in that sense. Also, this morning
00:10:44 when we woke up to news of inflation coming in higher than expected in the US, a Fed rate
00:10:50 cut being pushed down the road, there was a negative reaction in the street. How do
00:10:54 you feel about the markets? Do you think it still is a buy on dip or a sell on rally trade
00:10:59 has set in? I mean, some sort of a price and time correction is currently underway.
00:11:05 So I definitely agree with you that it's a price and time correction. We talk of price
00:11:10 correction because the markets have extended on the valuation front very aggressively and
00:11:16 a time correction because the market is going to take profits before the end of March and
00:11:22 you know, sans any government reform continuing because now we are entering the period where
00:11:30 the entire process becomes silent. So keeping these two things in mind, I think, and if
00:11:37 you play out the broader global outlook, you know, this expectation that interest rates
00:11:43 are going to come off is I think not placed right. The reason is that, you know, there
00:11:50 is going to be a very difficult environment for the US to get a hold of its inflation
00:11:56 and hence interest rates have to remain firm. There are two reasons. One is obviously the
00:12:01 CPI coming aggressive. And second is the fact that, you know, if they want to retain dollar
00:12:07 flows, then they have to keep interest rates high and combine this with the fact that,
00:12:12 you know, they're going to go into a very accelerated infrastructure spend. The inflation
00:12:18 is going to remain high because they moved away from China and all the inflationary forces
00:12:23 are in flow. Given that, you know, what we are seeing is a gradual shift happening due
00:12:30 to de-dollarization and, you know, the interest rate decoupling is slowly going to happen
00:12:36 where, you know, we do not rally as much as the US does, but, you know, the interest rates
00:12:43 will remain buoyant because we have to protect our export sensitivities. So keeping this
00:12:49 in mind, I think the market is factoring in all these negative business comments against
00:12:56 the fact that, you know, there is a melodramatic meltdown happening of the opposition parties
00:13:01 and a very, very strong third term for the Modi government is emerging. So I think the
00:13:07 index will be range bound between 20 to 200 on the higher side and 21,500 on the lower
00:13:15 side.
00:13:16 Right. That's Vineet expecting a range bound market, but let's slip into a very short break
00:13:22 as markets are at the day's high. So that's one positive. But on the other side, we'll
00:13:28 dive deeper into some specific stocks as well as take views from our guests.
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00:17:29 Welcome back. You're watching India Market Close here on NDTV Profit. You know, we have
00:17:34 one stock which has done phenomenally well, at least in trade today. The recovery on SBI
00:17:40 has been really solid. Now currently sitting pretty four and a half percent higher in trade
00:17:46 and probably the main piece of the chessboard that's carrying the Nifty Bank higher because
00:17:52 it's the top gainer on the Nifty Bank as well. I have with me Ashutosh Mishra, who's the
00:17:57 head of research and institutional equity at Ashika Broking. Ashutosh, give us some perspective
00:18:05 here. You know, SBI has been a laggard in terms of valuations versus some of the other
00:18:13 PSU banks, but the run up in some of the PSU banks overdone versus SBI, is this a bit of
00:18:19 a catch up that's happening? What's your sense?
00:18:22 So if you look at the FY25 estimate of SBI, it looks very promising compared to many other
00:18:29 public sector banks. The simple reason is that in the P&L of the SBI there was some
00:18:34 one-off included and which will be not there in the FY25. So the earning growth for the
00:18:39 next year will be very good for SBI and overall also its last two quarters, if you look quarter
00:18:45 and quarter growth of SBI is much better than many of the public sector banks. So given
00:18:50 current scenario, it's seen that SBI was not participating earlier, but now market is starting
00:18:56 to recognise its value out there and subsidies will continue to do quite well.
00:19:01 Sure. Ashutosh, still trading around that 1.5 times price to book, if I'm not wrong,
00:19:07 ballpark. Where do you think it can re-rate to? It's a benign credit cost environment,
00:19:13 it's a high growth environment, it's one of the banks with good loan to deposit ratio
00:19:19 and it's been able to somewhere maintain that 1% ROA. So does it have more legs from here?
00:19:31 I think there is more left for us. We also have currently our target price at Rs. 810
00:19:36 for the SBI. We clearly see that if you adjusted for subsidies, it's still trading at 1.24,
00:19:44 1.25 times roughly adjusted for subsidy valuations. So still there is good room available for
00:19:49 it. The question is whether there can be more improvement in the ROA profile going forward
00:19:57 from here. I think there is a chance, just now we discussed that the earnings for the
00:20:02 next year FY25 earnings for the SBI is going to be quite strong, mainly led by the lower
00:20:08 of OPEX and within OPEX, mainly led by the lower employee related cost, which is more
00:20:15 of a one-off at this point of time. So these things clearly point out that earning momentum
00:20:22 as well as business growth momentum, both are very comfortable for the SBI at this point
00:20:25 of time. Convolution also looks reasonable. Ashutosh, we get your point. But just moving
00:20:31 a little ahead of SBI, you've also seen a pretty smart move coming in on Bank of Baroda.
00:20:39 You also had PNB that are rallying quite sharply. In fact, in the last one month there have
00:20:45 been a slew of brokerages with eight banks that have got upgraded from the likes of an
00:20:50 SBI and an Axis Bank. So beyond SBI, what else do you like in the banking pack? At this
00:20:58 point of time, public sector banks are getting a lot of attention, mainly led by their strong
00:21:03 forte on the deposit front and the lower LCR, which they are – the better LCR issues they
00:21:12 are having at this point of time, the lower CD ratio. So I think this puts them in a very
00:21:20 important position and if you look, corporate capital growth is also returning back, whereas
00:21:25 the public sector banks have a relatively better market share gain compared to the private
00:21:31 players out there. So these things quite point out that public sector banks' momentum will
00:21:37 be quite strong and in this space we clearly like Canada, Bank of India, Indian Bank, SBI.
00:21:43 These are some of the preferred picks from our side.
00:21:47 Sure. Thank you so much for that perspective, Ashutosh. And thank you for giving us all
00:21:54 of those views with regard to SBI. Let me also take it to both of our guests, if we
00:22:05 can. Ajit, how does SBI look on charts, if you can give us a view there?
00:22:13 So it's a clear uptrend in the PSU basket and the good part is in the recent decline
00:22:19 we didn't see much participation from the PSU majors like SBI, Bank of India, Canada
00:22:25 Bank in this recent dip. And now in today's session also that though the average volume
00:22:32 is still trading below the average volume of around 3.5 lakh crores, it has surpassed
00:22:40 the previous swing high. So now the momentum is in the favour and plus the banking index
00:22:45 has also surpassed the hurdle that we were closely eyeing 45.8 mark. So this indicates
00:22:49 there could be further move since the stock is in unjaded territory, one should not restrict
00:22:54 the move. So if somebody is holding from the short to medium term perspective, they can
00:22:59 continue to hold and for the trader the stop should be at now at 7.30 and the next psychological
00:23:05 target may be close to around 810 is something that one should target.
00:23:10 Just a word coming in on SBI. I want to do a little bit of, actually let's stay with
00:23:15 banking before I talk to Vineet and Anjeet about Zee as well. Vineet, what's up with
00:23:21 HDFC Bank? I mean everyone is continuing to maintain a bullish call on this one, the stock
00:23:27 is diffusing to budge. Even today it's down about a percent or at least sort of keeping
00:23:34 the backdrop of earnings, merger, everything together and the fact that it's done 30% returns
00:23:40 in the last five years. Would you recommend a buy call on HDFC?
00:23:46 I think it's a classical value trap currently because we would like to see better numbers
00:23:53 coming from HDFC Bank in terms of their performance stabilizing somewhere. So until that does
00:23:59 not happen, I think this stock is not going anywhere, number one. Number two, we are seeing
00:24:05 SBI do as much ROE, plus or minus 1% as HDFC Bank and that stock is available to you at
00:24:14 1.2, 1.3 times the sum of parts valuation. And with these kind of very, very appealing
00:24:22 valuations, I think SBI is the most preferred bet of the market and SBI will continue to
00:24:30 outperform. One more thing about SBI is that it underperformed the entire PSU Bank rally
00:24:35 also and now it's playing very fierce catch up and with all negatives priced in the stock,
00:24:42 I think it should move towards 900-950 over the next one year.
00:24:50 Understood, thanks for that Vineet. Now we're going to try and shift focus to some of the
00:24:55 smaller names, MTA Tech, Nuwama, Aluwalia all three came out with their Q3 numbers.
00:25:00 Varsha joining us to give us more perspective because all those stocks are up and away in
00:25:04 trade. Varsha. Hi, so if you see, let's start with MTA Technologies
00:25:09 where the stock is down almost 11% on the back of weak earnings posted by the company.
00:25:14 So revenue was down 26%, EBITDA was down 47%. If you see margins, margins have narrowed
00:25:19 down to almost 798 basis point. This is on the back of increase of employee cost with
00:25:24 respect to revenue. And if you see net profit is down 66%, but FY24 revenue will marginally
00:25:30 be higher as compared to FY23 due to deferment of export shipments in clean energy sector
00:25:35 in next fiscal and growth outlook for FY25 to be almost 45% to 50%. Then we have Nuwama
00:25:42 Wealth Management where revenue almost doubled, net profit was 30 crore versus loss of almost
00:25:49 5 crore last year. And if you see them, wealth management grew almost 18%, asset management
00:25:54 grew almost 29% and capital markets grew almost 79%. If you see the net profit drivers, so
00:25:59 traction in asset servicing, then they have also sustained traction in wealth management
00:26:04 business to revenues up almost 9% quarter on quarter. And lastly, we have Aluvalia Contracts
00:26:10 where earnings have beat, earnings did beat estimates, revenue was up 38% and EBITDA was
00:26:16 up 56% margins were 10% versus 9% last year. If you see the guidance, so revenue, they
00:26:23 are expecting growth of 20% over FY23. But seeing the three quarters number, it is likely
00:26:30 that the company may surpass its revenue guidance and order book, if you see total unexecuted
00:26:35 order stands at almost 11,246 crore wherein government comprises 70% of those orders.
00:26:43 That's Aluvalia 11% higher, you've got Nuwama that is seeing a smart move. You've also KPI
00:26:49 green, that reported numbers just a few minutes ago, very strong reaction to on that stock,
00:26:55 it rates the gain of 5%. So the movement is there, earnings that are being, good earnings
00:26:59 are being rewarded and of course, disappointing ones are being beaten down. Vinay, I'll come
00:27:05 to you. How do you, I mean, what are your top trades? We didn't get a chance to talk
00:27:09 to you about that, but two to three stocks that you like right now? Ajit, that question
00:27:13 was for you actually. Right, Samina. So, in the market like this, still we feel that it's
00:27:21 too early to say that we are out of both. So the maintain position both side of the
00:27:25 market and defensive is something that we prefer for the long side. So Colgate in this
00:27:30 entire distribution decline didn't participate much. It's continued to hold short term average.
00:27:37 Now we are seeing a breakout and the stock moving to the unchartered territory. So one
00:27:42 can definitely look at Colgate for 2630 being the immediate target with stop at 2540. And
00:27:48 on the short side, Bajaj Twinserv is one candidate means both Bajaj Twins, they are struggling,
00:27:53 they are trading below their long-term averages. It's a clear cut pattern breakdown also from
00:27:59 the distribution pattern. So all this indicates that even if we see some recovery in the market,
00:28:04 their participation might not be there or it will be negligible. So 1590 should be the
00:28:10 stop for Bajaj Twinserv if one creates a short position in 1530, 1520 something one should
00:28:16 maintain as a target. Got it, Ajit. Time for a quick breather actually. More on the other
00:28:23 side. Stay tuned to India Market Closed. We'll get you the top buy, today sell, tomorrow
00:28:27 picks as well along with other things we'll discuss.
00:28:42 Thank you.
00:29:11 Thank you.
00:29:37 Thank you.
00:30:06 Thank you.
00:30:34 Thank you.
00:31:00 Welcome back. You're watching India Closing, the last half an hour of trade. This afternoon
00:31:23 we have with us a very special guest, Shiv Sehgal, President and Head of Newama. Captain
00:31:28 Mark is joining, joins in. Shiv, before I jump in to talk to you about what's happening
00:31:32 with the markets, a quick sort of tell us about how the conference has been that's underway.
00:31:39 It's of course regarded as a prestigious conference in that sense. But give me a sense of the
00:31:44 attendees, what are management's feeling, how is India doing post third quarter earnings?
00:31:50 Firstly, thanks a lot for having me on the show. I think it's really good to see what's
00:31:58 transpired over the last three days at the Newama conference. We've been hosting it for
00:32:02 20 years. And I must say that the entire investment thesis from both global and domestic that
00:32:10 we continue to see being written in the press, whether it is Japan, whether it is India,
00:32:16 the two darlings from investor perspective, I think the exuberance that the FIIs have
00:32:21 shown in the last three days and corporate India coming out and echoing the sentiments
00:32:27 that you guys have been talking about the show as well in terms of positivity, growth
00:32:31 happening, profitability happening. It was a confluence of a lot of factors kind of showcasing
00:32:38 again the fact that India has got both cyclical and structural tailwinds behind them. And
00:32:43 it's been a phenomenal attendance as well. We had almost north of 1000 investors over
00:32:50 the last three days, meeting more than 200 companies. And as I said, companies echoing
00:32:55 the positive sentiment that we've been talking about from India growth story.
00:32:59 Shiv, where is the excitement? Because if you look at stock performance and street euphoria,
00:33:05 everything that is government focus has got a leg up over the last couple of years. Sectors
00:33:10 like defense, infra, railway is where a whole lot of money has been flowing in recently.
00:33:17 There's also hope and expectation that private capex should start seeing a leg up as well.
00:33:22 Is that what you picked up when you spoke to investors, spoke to companies, any early
00:33:26 signs of private capex in a pickup? And also, would you think that private capex in the
00:33:34 government focus sector could actually be the next play?
00:33:41 So very well rightly said. So I think that was a theme that was discussed multiple times
00:33:44 over that there has been a little bit of disappointment on the private capital expenditure side. But
00:33:51 the confidence that corporate India is showing today, and I would like to tell the audience
00:33:56 that if you look at just in terms of profitability, profitability is for corporate India is up
00:34:01 almost 50% since pre-COVID levels. Also, free cash flows are up almost 3 to 4x at corporate
00:34:06 India levels. So it is and it's not just the bulge bracket. Historically, we have seen
00:34:11 the large one or two companies in every sector doing well. But here we have also seen the
00:34:16 mid and small cap space in India, both quality and quality in terms of the breadth of the
00:34:23 market seeing a lot of interest. And I think post these elections or the May event, as
00:34:29 you may call it, I think you will see a very large impetus from the corporate India coming
00:34:34 back into the private space as well. And I'm pretty sure that private capital expenditure
00:34:39 will happen. There was a lot of talk about it at our conference as well. I think there
00:34:43 is we can see the confidence that companies are seeing in the economy. And I think it's
00:34:47 just a matter of time in the next two or three quarters that we will we start seeing in different
00:34:52 sectors coming up as well.
00:34:54 Shashiv, Harsh also joining in. I also want to try and get your take. You know, we've
00:35:00 seen, especially within the mid cap and small cap space, a decentish, no more than decent,
00:35:07 a very strong rally that we've seen. How has that been viewed? You know, and how are valuations
00:35:14 now looking given that kind of rally? How should one approach companies in this market?
00:35:21 What sectors should one look for?
00:35:26 So Harsh, very valid point. I think everyone is aware of, you know, the performance that
00:35:31 the small and mid cap space saw in the last nine months. And I've been saying that, you
00:35:35 know, there will be some consolidation given the run up and out performance that happened
00:35:39 from, you know, March of 2023 till December. But the reality is, if you look at, you know,
00:35:44 the earnings and the growth stories and the gems that are being found within that space,
00:35:50 we continue to remain that. And, you know, so was the investment community. A lot of
00:35:57 historical large asset allocators that have only looked at the large liquid names in India,
00:36:02 you know, the MSCI India names. Even those investors coming out and asking questions
00:36:06 that where can we find the next multi-bagger and willing to come down the curve in terms
00:36:11 of liquidity to pick up, you know, alpha or outsize returns, also lends credence to the
00:36:17 fact that I think, you know, this rally is not just euphoria about the last 12 months.
00:36:23 Post some time consolidation, you know, everybody's been kind of waiting for a pullback to put
00:36:27 further allocations and put further money in. I think a healthy consolidation for India,
00:36:34 corporate India would be much more welcome from the investor community. I don't think
00:36:39 it's happening. I don't think it's about to, you know, transpire that way. I think investors
00:36:44 will continue to chase at a higher level. And as a result of which, I think as long
00:36:50 as earnings and cash flow and profitability continues on the uptrend, valuations don't
00:36:54 remain a concern just yet. We are too early in the bull cycle for that in my mind.
00:36:58 Sure. Take your point. Shiv, you know, I want to switch over to macros also a little bit
00:37:03 because I'm sure lots would have been discussed over the last two to three days. Now, with
00:37:08 regard to the most recent numbers, as well as some amount of skepticism as to whether
00:37:13 the Fed will cut by 75 bps, by 125 bps. What's the sense like for 2024? Because I think at
00:37:23 the end of 2023, markets were leaning on a 100 plus basis point rate cut. Maybe not so
00:37:29 anymore. So, Harsh rightly pointed out. So, I think,
00:37:37 you know, that by and large, the markets are a forward looking mechanism. Investors, yes,
00:37:42 I think there was an element in December that everyone was expecting a March rate cut. I
00:37:47 think that's been priced out. But again, at the same time, I think most are very cognizant
00:37:52 of the fact that it is not a matter of if the Fed cuts, it's a matter of when. And if
00:37:59 I look at the most recent probabilities happening post the CPI event overnight, I think the
00:38:06 March rate cut is a 10% probability in my mind. The May rate cut is a 40% probability.
00:38:10 But the June rate cut, the market is pricing a 100% probability event that by June, we
00:38:15 would definitely have had one rate cut. And if you look at the Fed sensitivities, I think
00:38:20 we are, the market by and large, and the market participants are still factoring in 90 bps
00:38:24 points of cuts over the next 9 to 12 months. So, as I said, I think, you know, yes, there
00:38:29 was a little bit of euphoria that the Fed is about to, you know, the pivot in the monetary
00:38:34 policy is about to happen. The dovish pivot is about to happen. And, you know, I think
00:38:38 the global markets by and large were getting help by that. But in India, you know, as I
00:38:42 said, the structural tailwinds and the cyclical story is so intact that it is that in my mind,
00:38:50 you know, the Fed will cut rates in a matter of one quarter or two quarters. That will
00:38:54 provide a further impetus to the growth story that's happening in India. So, in my mind,
00:38:59 as I said, I've been continuing to say that, you know, India remains a buy on dip market
00:39:04 for the foreseeable future. And I think everyone will be amazed at the kind of performance
00:39:08 that will happen from a macro standpoint in India.
00:39:12 Right. Shiv, I'll talk to you about your nifty returns in a minute. But just before that,
00:39:18 because Harsh referred to the global setup, what does that mean for tech companies? Still
00:39:23 a week ago, there was chatter on the street that, you know, maybe the worst is behind
00:39:29 tech companies, valuations are attractive. But the fact remains, the US goes into election
00:39:33 next year. No one has been committed or indicated of any green shoots. At least most managements
00:39:39 haven't at these earnings, at the earnings season that we saw. How do you approach tech?
00:39:45 Now, today, of course, they're selling off on back of a delayed rate cut expectation.
00:39:49 Would you play tech? If yes, where is the action? Is it the ER and the space? Is it
00:39:54 sectors that are, you know, creating tech for maybe defense, aviation, railways? So,
00:40:00 that sort of gives you a play between AI and sectors that are more domestic facing and
00:40:05 future looking. So, I would definitely, first of all, that's
00:40:12 a very valid question as well. I think you're spot on. The most interest rate sensitive
00:40:18 sector in terms of market participation is, of course, the tech sector and, you know,
00:40:21 Fed pushing it out, you know, you will see some consolidation or some profit taking given
00:40:25 that run up that we also had. But I remain extremely bullish on the tech sector. We've
00:40:29 been calling it a, it's an overweight at Nuvama as well. We've been saying that irrespective
00:40:34 how the politics plays out in the US, I think it's no doubt that the large conglomerates
00:40:40 are still French shoring rather than offshoring. India remains, because of the demographic
00:40:46 and the skilling that is happening in the tech sector, a very, very favorable play for
00:40:50 most large companies and MNCs, not just in the US, but even in Europe for that matter.
00:40:55 I think we will see a lot many order wins. Most of the commentary coming out from the
00:41:01 large companies is still very conservative. You're absolutely right. But I do feel that
00:41:05 as we get closer to the second half of this year, the order wins will continue and you
00:41:10 will see performance. As I said, market is a forward looking mechanism. I think the tech
00:41:14 sector will start pricing in a much better economic environment for these companies,
00:41:20 both in terms of profitability in the next coming few quarters. So, we are very bullish
00:41:24 on tech and I personally remain very bullish on tech sector in India, especially on the
00:41:28 services and there's no doubt from the domestic side as well. But even from the export sector
00:41:33 coming, especially coming from Europe and US.
00:41:36 How do you feel about chemicals then in that case, Shiv? Do you feel like we're turning
00:41:40 the corner here, even though we haven't seen too much positivity with regard to earnings,
00:41:45 but they've been down and out for too long now?
00:41:51 So I think in India, we always see these sectors. I mean, real estate was kind of in the doldrums
00:41:56 for almost a decade. And then the last three years, we've been talking about the PSUs and
00:42:01 the real estate transactions in terms of GST going up on a month to month basis. I think
00:42:07 the chemical sector had a phenomenal two years during COVID. And given the run up in the
00:42:12 prices in terms of stock performances, it's bound to see some consolidation that we've
00:42:17 been seeing over the last, I would say two or three quarters. We think that the chemical
00:42:23 sector is about to see a turnaround. Maybe we are a bit early in terms of calling it
00:42:29 a turnaround just yet, maybe it takes another quarter or two. But I think the correction
00:42:34 that has happened and the consolidation that's happened, I would be dipping my toe in right
00:42:37 now in the chemical space.
00:42:38 Got it, Shiv. Shiv, I want to, you know, kind of again, try and understand your views with
00:42:45 regard to the market as a whole. Now, it's going to be a year of unknowns 2024. You've
00:42:52 got elections in a record number of countries, rate cuts on the anvil, again, a lot of unknowns
00:43:00 there as well. And therefore, how do you view Indian markets given the fact that every dip
00:43:09 is being bought into by a very solid set of DIIs? Even at any point of time, we've seen
00:43:17 FII selling, it's been bought up by DIIs. How do you view this shift, if I can call
00:43:23 it in trend? And therefore, will this be a flattish kind of consolidation or do you expect
00:43:30 that from here there is more room for upside in the near term in 2024 than downside?
00:43:37 Harsh, again, great observations. Let me just kind of give you the big picture here, how
00:43:44 I see things playing out. One, I think everyone should know that 2023 was the first year in
00:43:50 almost two decades that the Indian markets, every subsector that we track, we track 23
00:43:55 subsectors, every subsector closed in the green. So yes, there was an outperformance,
00:43:59 which was very broad and there was a lot of breadth to it.
00:44:03 Second point, which I want to highlight is that last year was a low wall, high return
00:44:07 market. By and large, what we have seen in markets, low wall, high returns tend to lead
00:44:14 to high wall, low returns. I don't think that this year will transpire that easily. I think
00:44:20 yes, you will see a lot more volatility as in when that is derived through events like
00:44:25 Fed moving out the rate curve or geopolitical for that matter that have been transpiring
00:44:30 as well.
00:44:31 Having said that, I think what India is seeing at the moment is that there is a lot of rotational
00:44:37 money moving from one sector to the other and that has historically always been the
00:44:40 case in India. I think you need to stick to your high conviction, good quality, great
00:44:46 balance sheets, growing companies. By and large, I still feel India will see double
00:44:49 digit returns for sure. I do feel as well, I think I may be a contrary here, that you
00:44:57 will see some rotation back into the large caps as well. I think the large names, especially
00:45:02 the private sector banks, have been consolidating for a while. I think you will see some rotational
00:45:07 shift from, especially from new money coming in from FBIs. And we have been meeting a lot
00:45:12 of new foreign allocators that have been looking at India but have not pulled the trigger.
00:45:18 I probably met 10 funds in our conference itself who have been coming to India but have
00:45:22 not pulled the trigger and are about to pull the trigger very soon. So there is not only
00:45:27 just about one FII or FPI selling to the other, but it's also the fact that there is new money
00:45:32 coming into India. That added to the fact that we are seeing about 3 billion of domestic
00:45:38 SIP money that you guys keep talking about and we all know the stats now. I think if
00:45:43 I'm buying large, you will probably see 60 to 70 billion worth of total flow of money
00:45:49 coming into the Indian markets. And as a result of which I think, I am a firm believer that
00:45:54 liquidity and momentum drive everything. And we also have the fundamental and the whole
00:46:00 macroeconomic drawback, which is helping the Indian growth story. All combined, I think
00:46:06 there'll be rotation among sectors, but the trend is up. And that is not going to get
00:46:12 delayed. I think we all know that May is probably an on event in terms of the investor probability
00:46:19 event that people are putting in terms of elections. I think we all know what the powers
00:46:23 that are going to come and win. I think what is more interesting is the policies and the
00:46:30 next 10-15 year growth plan that our Honorable Prime Minister has talked about that he will
00:46:35 be unveiling in the next three or four weeks. I think that will be the next impetus to this
00:46:39 market going up again.
00:46:40 Shiv, we'd have loved to chat with you longer. We hopefully will see you soon and have a
00:46:45 more detailed conversation on this. We're out of time as we are running into closing.
00:46:50 But thanks for joining us and good luck. In the meantime, we've got Vineet and Ajit also
00:46:55 waiting by. Vineet, I don't know whether you've been tracking this, but what is going on in
00:47:00 the oil and gas pack? And does it look like a good tactical play or it's because there's
00:47:05 no real rationale for this, it's best avoided for now?
00:47:10 So we are quite bullish on the oil and gas space. We've been bullish on BP sales since
00:47:15 about 400 levels, HP sales around 330. And we believe that the valuations for India's
00:47:22 largest energy plays is that cheap. Second thing is their business models are slowly
00:47:28 transforming into green energy. They're looking at new areas of energy procurement, especially
00:47:37 if you see ONGC. So we like all these stocks and we think that there is still a lot of
00:47:44 upside room out here and this should play out really well for investors.
00:47:51 Right. Thanks for that, Vineet. Ajit, let me go across to you. What's the sense with
00:47:57 regard to OMCs on charts?
00:47:59 Can you please come again?
00:48:04 On the OMC pack, we've seen some of the players really buzzing today. We've seen the OMCs
00:48:10 go up by 3 plus percent, Nifty Energy is up roughly 3 percent plus. What's your sense
00:48:16 on charts? What should one do?
00:48:20 So if you notice that last four months, it's almost like a 90 degree kind of move that
00:48:26 we are seeing in OMCs and all the dips, you know, restricted to the short term averages
00:48:34 and then they've rebounded. This time around, it didn't even come closer to that mark and
00:48:39 you know, witnessing this sharp move. So this indicates that, you know, this particular
00:48:44 sector barring the other PSU pack, especially the railways and the other names wherein we
00:48:50 were seeing sharp cuts during this corrective move. Other one which one should be focusing
00:48:56 on in case the markets, you know, resume the uptrend and you know, witnesses a further
00:49:00 up loop. And within this space, IOC is something that one can look at because BPCL, HPCL, they
00:49:07 have already done well. They are trading at record highs. We are still have a catch up
00:49:11 move possible in IOC. So as a trader, your stock should be at 170 and 195, 200. The risk
00:49:19 reward is still payable. One can look at IOC within the OMC space.
00:49:23 Ajit, any buy today, sell tomorrow calls? We still have another few minutes to go to
00:49:27 execute those trades.
00:49:28 Yeah, so TBS Moto is something that we like because if you notice that auto is one of
00:49:34 the sectors which have performed exceptionally well in this, you know, entire correction
00:49:39 and TBS is the one which didn't participate altogether. It was more of like consolidation
00:49:45 that we've been seeing in the stock for almost two months now. And now it seems like that
00:49:51 consolidation will likely to end with a breakout soon. So 2200, 2250 is something that we are
00:49:57 eyeing. So with stop at 2040, one can definitely look at TBS as a short term bet or as a BTSD
00:50:02 candidate also.
00:50:03 So, thanks for that, Ajit. Vineet, if I can come to you on Zee, that stock has flown away
00:50:08 in trade today. Of course, it's seen a bit of a tumble as well over the two to three
00:50:16 month period. But what's your sense now with regard to it fundamentally?
00:50:22 So you know, the uncertainty around the stock is through and now I expect the stock will
00:50:29 move in momentum, though we don't track it very actively. But the momentum seems to suggest
00:50:35 that there is some more upside remaining in the stock.
00:50:39 On the charts, does Zee look like a good trade on the long side? Ajit, on Zee, we can't hear
00:50:48 you.
00:50:49 Am I audible now?
00:50:50 Yes, you are.
00:50:51 Right. So Zee, I would recommend to refrain from any trade right now, considering the
00:51:00 kind of swings that we have seen in the stock in the last one month. We have better counters
00:51:04 to look at. But in case if you are stuck, if you have an existing position, 185 should
00:51:09 be the new base now and that should be the stop. We have a strong gap to fill, maybe
00:51:15 close to around 210 to 228 is broadly this gap is. So any debound towards 225 levels,
00:51:23 one should look for exiting opportunity if you are stuck. But avoid any fresh trade if
00:51:27 you are planning any now.
00:51:29 Got it, Ajit. Vinit, any bottom up ideas from your side as we go into market close?
00:51:36 We like BCBL, Philips Carbon Black Limited. I think it's a stealth play on the EV and
00:51:44 the semiconductor space and even water story going ahead. So over the next couple of years,
00:51:50 I think this stock looks very, very good. Apart from this, I think RallyGar is a very
00:51:55 underrated play in the financial sectors. We are strong believers in the platform and
00:52:00 expect that once this bravado along the merger and takeover is settled, this stock has substantial
00:52:12 upside triggers for the stock to play out.
00:52:16 Right. Vinit, Adani Group Companies, a couple of big upgrades came in between last evening
00:52:22 and this morning. Any of those Adani stocks that you would be adding to your portfolio?
00:52:29 Actually, you know, I'm a big buyer across all the stocks. The reason being that they're
00:52:34 a perfect play on India's infrastructure story. And all of them have got their sectoral advantages.
00:52:46 And so we think that this will play out very well. Adani Ports, which is considered a laggard,
00:52:51 is the outperforming the sector followed by Adani Green. And Adani Enterprises has got
00:52:57 a very, very long growth path ahead of it over the next few years. So that will become
00:53:06 a very strong long term play for us.
00:53:10 Sure. Ajit, if I can come to you, I mean, we did take Vinit's views on something like
00:53:17 an HDFC bank. Your views with regard to charts, do they look weak or is it a good time?
00:53:25 So honestly, everybody's waiting for a rebound in HDFC because every passing day we were
00:53:31 seeing that the other private banking majors, some or the other, are witnessing traction.
00:53:35 So XSIC, ICI, they won, which are consistently playing well. And we have names like Innocent
00:53:40 and Kotak and HDFC, which is still keeping the market guessing which next direction move
00:53:46 that they're going to take. Technically, we feel that this zone 1390 was the immediate
00:53:53 support and next comes around 1360. So we are almost close to that mark. In case if
00:53:58 we fail to hold, then maybe 4-5% kind of like, you know, further decline is something that
00:54:03 it might see and maybe 1240-1250 could be the zone. So if somebody is holding from the
00:54:09 short term in a perspective, I feel that one should look at XS and ICICI, they're the better
00:54:14 candidates to look at. But if you have made any reversal trade or contrarian trade, 1360
00:54:21 should be your strict stop.
00:54:23 Thanks for that, Ajit. Vineet, if I can come to you with some, you know, if you can give
00:54:30 us some ideas on the classic Capex plays, anything that you would think of, because
00:54:36 we are at the anvil of possibly a private Capex cycle. What should one look for if we
00:54:43 are to stay ahead?
00:54:44 So I think Deepak Fertilizer's time story looks very promising. We could look at SRF
00:54:50 Finance, which is now a 15,000 crore Capex. That's a huge upside. So these are some of
00:54:56 the very large Capex plays that you can look out for. Obviously, Adani Enterprises figures
00:55:04 there with a 5-7 billion dollar Capex plan over the next 5-6 years. So, you know, these
00:55:11 are some of the stocks that we track and these are some of the Capex cycle stocks to look
00:55:17 at.
00:55:18 All right, Vineet, thank you for joining us. Ajit, great to having both of you today
00:55:23 on the markets. We are wrapping up the last two minutes of today's trade and it's been
00:55:29 such an exciting session. We started with a big gap down and back of weak global cues
00:55:33 and we are actually going home with a pretty sharp up move. The markets closing at the
00:55:38 day's high point on the index, the Nifty closing around levels of 21,800, 21,850,
00:55:45 21,580 remember was today's opening. So at the day's high point is what we have on the
00:55:51 index, 110 points higher is where we have wrapped up today's session. The Sensex also
00:55:56 goes home with gains half a percent high and a lot of those gains, in fact, all those gains
00:56:00 have pretty much come in in the last one hour of trade. The Nifty 50, like I said, half
00:56:04 a percent gains on the Nifty 50. Well, a quick check of how the broader markets played out
00:56:09 because the action really was driven from the broader marketplace, the Mid Cap Index
00:56:14 outperforming the benchmark and the Small Cap Index leading the way up, up about 1.3%,
00:56:19 both for the Mid Cap and the Small Cap Index. Sectorally, PSU was the big, big gainer in
00:56:24 today's trade, so was media. You also had a couple of other sectors that actually did
00:56:28 quite well. So PSU Banks up 3.5%, you had the PSC Index also up 3.5%, media was up 2.5%,
00:56:35 largely on back of Zees move. Energy, which is oil and gas stocks, went home with a gain
00:56:39 of 2.5%. You had metals, auto and real estate all participating in trade. The only sector
00:56:45 that we saw selling off or the only two sectors that we saw selling off were export-oriented
00:56:49 spaces, Nifty IT and Nifty Pharma, both seeing a cut of 0.7% to about 1%. Well, in terms
00:56:56 of the big stock movers, if you can pull up the Nifty 50, you will get a sense of where
00:56:59 the action was. But these are the big contributors in terms of the benchmark close this afternoon.
00:57:05 RIL actually managed to do quite well. You had 26% contribution coming from RIL. The
00:57:11 stock goes home with a gain of 1%. Not far behind was SPI, 5% up move on SPI has contributed
00:57:17 over 26% to today's gains. Access as well. So two out of the five counters that contributed
00:57:22 to Nifty's up move are from the banking pack. Well, this is beautiful to say the least because
00:57:27 when we started the day, we only had four stocks that were in the green and the rest
00:57:31 of the market was actually looking very, very weak. The picture looking very different as
00:57:35 we see it. IT and Pharma were the weak spots, like I said. So Tech Mahindra, Ciplar, Dr.
00:57:40 Reddy's, Infosys and TCS have had it quite rough. LTIM, Sun Pharma also doing quite badly.
00:57:46 HDFC Bank recovered from its day's low point but still gone home with a little bit of weakness.
00:57:51 Hindalco after a 12% cut yesterday trades flat or goes on flat in the session. Not sure
00:57:56 what happened in the oil and gas pack, but BPCL took the cake. It started with a gap
00:58:01 up this morning and only gradually built on to those gains. Finally, going on with the
00:58:05 day's high point, 8% higher on BPCL. SBI not far behind, 4.5% on this one. ONGC up 4%.
00:58:13 Indus and Bank, Power Grid, Bajaj Auto, RIL did really well, like we said, 1% gain on
00:58:18 that one. So it was an interesting day of trade. Baring IT and Pharma, all sectors have
00:58:23 participated. Broader markets also leading in that sense in today's session.
00:58:28 Thanks for watching.
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01:01:19 Well, what a stellar rebound we've seen in markets today, largely led by the PSU banks
01:01:24 and the PSU PAC. Let's start off with the Nifty 50 up 0.5%, very close to the day's
01:01:29 high, 21,840. Little did we expect to close above the 21,800 mark when we started off
01:01:36 today. We would have taken it with both our hands and that's exactly what's happened.
01:01:40 The Nifty Bank also solid 9/10 of a percent higher, 400 plus points of gains, very close
01:01:46 to the 26,000 mark again now on the Nifty Bank. Let's quickly take it to the heat map
01:01:52 itself to try and assess as to where the gains have come from. I did speak about the Nifty
01:01:56 PSU PAC. That's where the gains came from and you can see that 4.2% high on SBI, which
01:02:01 has led both the Nifty PSU as well as the Nifty Bank in trade today. But outside of
01:02:07 that, some of the IT stocks saw some weakness after the kind of macro picture we saw coming
01:02:13 in from the US in terms of the handover. OMC stocks were buzzing up and away, BPCL, ONGC
01:02:19 both higher and higher by quite a bit. BPCL just built on the gains from the start of
01:02:24 the day. You had Coal India as well among the gainers. Axis also took home some gains.
01:02:30 You had Power Grid also taking home some gains. So overall it looks like a very, very good
01:02:36 day, especially the way we had started and the way the day was progressing. We've closed
01:02:40 off quite strong. In terms of sectors, let's quickly look at them and what you'd see is
01:02:45 the top sectoral gainers were the PSU PAC. PSE up 3.3%, the PSU Bank up 3.2%, the Nifty
01:02:54 Bank obviously up just about 9/10 of a percent. So nowhere in sight there at the moment. Nifty
01:02:59 Pharma and Nifty IT were the two laggards. No surprises there given the weak global cues.
01:03:04 In terms of the Nifty PSE, let's delve into that, look at the contributories. And we saw
01:03:11 a sea of green within that PAC. Nalco, strong earnings, but HPCL, BPCL, Oil India, all of
01:03:17 those also doing fairly well within the Nifty PSE PAC. The Nifty PSU Bank as well, if we
01:03:23 can have those names and you'll see again a sea of green across the board. No contributories
01:03:28 in the red. So overall it's a day of gains led by the PSUs. Of course, both OMCs as well
01:03:36 as banks pulling some weight along with metals. Thank you.
01:03:45 Thank you.
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