-#NBCC shares surge — board set to consider bonus issue
-#Nifty hovers around 25,000; #Sensex trades flat
Get all your stock-related queries answered by our technical and fundamental guests with Hersh Sayta and Anushi Vakharia on Ask Profit.
-#Nifty hovers around 25,000; #Sensex trades flat
Get all your stock-related queries answered by our technical and fundamental guests with Hersh Sayta and Anushi Vakharia on Ask Profit.
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TVTranscript
00:00So, they have slated a meeting on August 31 to consider the bonus issue of shares that
00:04we are looking at.
00:06Last bonus issue was in the ratio of 1 is to 2 which happened back in 2017.
00:10So, that was on the bonus part why the stock is buzzing, but let us also go to the fundamentals
00:14as to why the stock is buzzing.
00:16So, if we look at the recent orders in focus, its arm HSEC got orders worth about 528 crore.
00:23Now, this was for the biomedical equipment as well as hospital furniture in Haryana.
00:29Along with this also they had received another 720 crore of orders, this was about 710 crore
00:35for development of two land parcels in Jhansi and again 10 crore for the institute of company
00:41secretaries of India.
00:42Now, if you take the consolidated order book in picture that stands at about 81,000 crore
00:47as of June 24.
00:49But let us look at the earnings as well.
00:51So, revenue was up around 11 percent at 2144 crore in Q1, EBITDA also strong growth 60.3
00:58percent of growth and the margins have inched upwards to 4.27 percent as compared to 2.96
01:04percent.
01:05Net profit seeing about a 38.5 percent growth.
01:07But on to the outlook going forward, management targets a 13,000 crore of top line which shows
01:12about a 25 percent of a growth.
01:15Margins slated at 5.5 percent to 6 percent for FY25 and PAT margins at 4.5 to 5 percent
01:21for FY25.
01:23The management also anticipates this 80,000 crore order book that we are looking at to
01:27go to the 1 lakh crore by the year end.
01:29So, strong performance even if you look at the year forward in terms of stock performance,
01:35in one year it has seen about a 270 percent of a gain, 6 months 42 percent and in one
01:39month 0.4 percent of a gain for NBCC India that we are looking at.
01:44Sure, absolutely.
01:45Let us bring on our guests on board Anushi after that very comprehensive breakdown of
01:50NBCC.
01:51We have Rajesh Agarwal, head of research at OM Capital and we have Vaishali Parekh, vice
01:56president technical research at Prabhudas Leeladhar, both of you all welcome on the
02:00show.
02:01Rajesh, let me take it to you first, bonus announcement technically does not signal any
02:07positivity per se except the fact that you get additional shares and there is a larger
02:12free float.
02:13What is your sense, 10 percent move on NBCC, how do you view the stock as well as the announcement
02:20itself?
02:21Good morning, Harsh.
02:22Good morning, Rajesh.
02:23Good morning, Vaishali.
02:24You said it right, a bonus or a split does not add any value to the company fundamental
02:34itself, just it increases the liquidity and the charm on the retail investors I would
02:40say when they go on hunting for lower priced stock, otherwise fundamentally that does not
02:47make any changes in the fundamentals of the company.
02:50But as far as NBCC is concerned, Arushi did a very comprehensive detailed analysis of
02:58the data and all.
03:00So I won't add anything to that because it already has been done.
03:04But what I would like to add is NBCC basically is into three segments I would say, project
03:10management, real estate and EPC and all three divisions are doing very well.
03:15While other real estate or a construction company, you find a lot of debt.
03:20This is a company which is debt free, I would say, and almost 70 percent, I said almost
03:26because 61 percent is with the government of India, 5.96 with LIC and 2.3 with CPSC.
03:34That makes a 70 percent government holding.
03:37So float is also low.
03:41Fundamentals are very strong.
03:42It has been languishing since a very long period of time in the last four or five years
03:45because of various reasons like Amrapali going to expel and all those things.
03:50Otherwise, it's a very strong company, debt free company, having a good order book of
03:55almost 84,000 odd crores, which the management has clearly indicated that it would move to
04:01around one lakh crores.
04:02I think some bit of consolidation after this kind of up move today would be a very good
04:08price point for long term investors to make an investment.
04:11Maybe 175, 180 odd levels would be a very good levels to enter come bonus.
04:17Okay.
04:18So strong fundamentals on NBCC over here.
04:21But let me take it across to you, Vaishali.
04:23The stock has been flat for this month.
04:25It has been one of the strongest performers in the first part of the year.
04:28How is it looking on to you for charts like a company for NBCC?
04:33Very good morning all of you.
04:36It has opened with a gap up and volume also is exceptionally high.
04:41So I think this has the short fader and strength in the stock.
04:46And I think this time it's very likely it can move past the previous high of 198, 199.
04:52I think this target of 210 cannot be ruled out.
04:56Okay.
04:57Let's start with our queries because we have quite a few.
05:00We have Ramu from Tirupati.
05:02He holds 320 shares of HAL.
05:06And I'm going to come to you on this one, Rajesh.
05:08Just look at that profit number.
05:11Nearly 8 lakh rupees of profit.
05:13320 shares of HAL bought at 2,257 rupees a piece.
05:17Wants to understand where to from here.
05:20Classic case of retail investor making long term wealth.
05:27You said it right.
05:29Gentleman needs to be congratulated for such kind of patience of holding the stock
05:34because retail investors generally tend to book out at 5-10% of profit.
05:39But yes, it's a good company, no doubt, with good order book.
05:43Government's focus on indigenization of defense is another feature
05:48which is helping the entire defense piece as such.
05:51And this particular company is sitting on a good order book.
05:55In the short term, there might be some long period of consideration.
05:58But for a longer term horizon, it's a good hold.
06:01So what I would suggest is if you are not in a hurry to book out profit
06:07or not in need of some money, stay put with the stock.
06:12Okay, so stay put on HAL for this one.
06:15Rajesh, I'll stick to you for the next query as well.
06:17Now this is from Mohit from Ludhiana.
06:19And he wants a view on Campus Active where he's bought it at a price of 284.
06:25Currently, he's sitting at a loss of about 494.
06:28Time horizon for about two years.
06:30Can you guide him on what's the outlook on Campus Active where?
06:35It's a strong company with a strong brand
06:37and corrected a whole lot of market cap from the recent highs.
06:42But still, it's trading at a premium to its peers, I would say.
06:48It's better because still at these levels,
06:54I think the valuations are on a stretch because of fees and all.
06:58The numbers were not that great in the last quarter too.
07:01So it's better to book out on upticks.
07:04All right, Vaishali, I'm going to quickly come to you on a couple of queries.
07:08We have Chandra here.
07:09And he holds Ujjain Small Finance Bank at Rs.42 apiece.
07:14Rs.200 is the quantity he holds.
07:17Your quick view with regard to this one, Ujjain Small Finance, Rs.42 apiece, Rs.200 quantity.
07:25This stock has really corrected right from the recent highs of 53.
07:29Currently, it's making an attempt to give a bounce from the oversold zones.
07:35So unless and until this stock moves past 45-46 levels decisively and sustains,
07:41I think it should be in a range bound.
07:43So I would say wait it out because above 46, he may test the levels of 55-56 to start with.
07:49And then from there on, we can have a re-look.
07:52And same querist also has another query, Ease My Trip.
07:56He's purchased 300 shares at Rs.41 per share.
08:00Your view on that one, on Ease My Trip, Vaishali.
08:05So this too also is in a similar pattern as Ujjain Small Finance, the previous one that you mentioned.
08:12But today, right now what we are seeing, it's showing some strength over here.
08:17Can be a good buying opportunity or could average out over here.
08:21Expect a bounce up to 45-46.
08:24Okay, so next query is from Rajesh Maheshwari from Indore.
08:28And he wants a medium-term outlook on GMM Fodler.
08:32He has purchased about 75 shares and this is at a price of about Rs.1,600.
08:36Rajesh, I'll come to you on this one.
08:38How does GMM Fodler look to you on a fundamental basis?
08:43See, fundamentals are very strong and today the volumes have been very high, I would say.
08:48I think one should continue to hold with their stock.
08:52The numbers have been good.
08:53The only problem with their stock is the low liquidity.
08:56But for a long-term investor, I don't think liquidity would be a concern.
08:59Continue to hold.
09:02I want to, you know, really applaud a couple of viewers here
09:07because the next stock that I'm asking for and you'll know why.
09:1125,000 shares is what Bhaskar has bought at Rs.25 apiece of NHPC.
09:18I mean, four bagger from there.
09:21Clearly, a long-term compounder playing out.
09:25Rajesh, let me come to you on this one.
09:28Rs.18 lakhs of profit is what this gentleman is sitting on.
09:31Firstly, many congratulations.
09:32But Rajesh, what's your view now at this point, NHPC?
09:37Do you believe that the run-up has been strong and maybe over the next two to three years,
09:41what do you believe the stock has in terms of potential?
09:45See, potentially for the next two, three years, yes, it can do well.
09:48But one should not expect the kind of performance it has seen in the recent past.
09:56Because that way, what will happen is your capital will be back to you
10:00and what you will be holding will be the profit part.
10:03Otherwise, the company is doing very well.
10:05It has been giving good dividends to good capital.
10:13All right.
10:14So we've reached the 25, 100 mark as we are speaking.
10:18You know, we are now a third of a percent.
10:20Let's pull up the Nifty 50 itself.
10:22Of course, just to cap off that point, Rajesh continues to be bullish on NHPC.
10:27But look at some of the real movers in trade today.
10:30You're seeing LTI, Mindtree, of course, but Wipro three and a half percent.
10:33Infi has moved up fairly sharply as well.
10:36Two and a half percent higher.
10:37IndusInd Bank chipping in as well.
10:39Bajaj auto up a percent and a half as well.
10:42In terms of the losers, you have to look at the Nifty 50 itself.
10:46Bajaj auto up a percent and a half as well.
10:48In terms of the losers, you have Hiro Moto lying at the bottom of the pile.
10:52But outside of that, everything at least lesser than a percent lower.
10:57So we're seeing 20 stocks in the decline
11:00with some heavyweights being largely flat and not participating.
11:04Something like an HDFC Bank not participating at all.
11:07Kotak Bank as well, completely flat.
11:09The Nifty IT now going from strength to strength, 2.3 percent higher on the Nifty IT.
11:15You're seeing largely pressure come in from the Nifty FMCG.
11:19But if you look at the intraday graph of the Nifty FMCG,
11:22you'll see that we're currently sitting better than what we were
11:27at the start of trade or at any point of time in the trade today.
11:30So essentially, we're getting better as the day is progressing.
11:36Let's pull up the Nifty 50 itself and let's pull up the graph for the Nifty 50
11:41and see where we are at.
11:42We're sitting very pretty right up at the top of the day.
11:45Third of a percent higher.
11:47We've breached 25100 and we've come just about back off.
11:52We've pulled back off from that 25100.
11:56Rajesh, let me come to you.
11:58Where next when it comes to the Nifty?
12:00Do you believe that valuations now starting to look slightly more expensive
12:06or do you believe that earnings are catching up, keeping pace?
12:10See, I don't think valuations are expensive because at this point of time,
12:15to 25100, I would say Nifty valuation is around 10 years average.
12:20And when you talk about averages,
12:23then you have to look at things that are on the same platform.
12:27But a lot of things have changed in the last 10 years.
12:30GST, PLI, digitization, a lot of things have changed.
12:35So I don't think that same kind of averages should be taken into consideration
12:39going forward.
12:40And not to forget, earnings are catching up.
12:43With interest rates likely to go down from here onwards,
12:47I think we have still a lot of way to go ahead.
12:51Even if Nifty doesn't perform, maybe mid-cap, small-cap,
12:54the entire space is buzzing.
12:56So yes, there are some pockets where valuations are spread.
13:00There are some mid-cap, small-cap pockets where the fundamentals are not supporting.
13:04But you have to be very selective and be good stock selection.
13:10Do good stock selection.
13:12And if the management has got the company projections are good,
13:15I think it's no point being in panic.
13:18Vaishali, I'll come to you on the same one.
13:21Where to from now when can we see this Nifty at an all-time high?
13:25How is it looking for you?
13:27So technically, yes, we were expecting a target of 25300.
13:32So that is the near-term target resistance that we would be looking at in Nifty.
13:37Alright, I'll move on to the next query now.
13:41RVNL, one stock which has been in correction in the last month as we speak,
13:45but has been a strong multi-bagger in the last one year period as well.
13:49Vaishali, I'll come to you for this one as well.
13:52RVNL, Susheela Bailary has bought about 378 shares at a price of 154.
13:59Whether she should continue to hold this or exit,
14:01currently sitting at about 1600 of a profit figure?
14:05So I would say, well, right now there is no damage to the trend and continue holding
14:09because since two days we have seen that there is some pickup coming in all the real stocks.
14:15And RVNL to talk about, I would say keep a stop-loss of 560.
14:19And if this follow-on buying continues, we can see a level of 600 to 630.
14:26So stop-loss is a must because if market corrects,
14:29then we may see some profit booking, but for now, it's a hold.
14:33Okay, a hold on RVNL, but let's quickly switch focus.
14:37Tata Chemicals, we have a viewer here, Vishaka Patil from Mumbai.
14:43She holds 1000 shares of Tata Chemicals at an average price of 1060 rupees a share.
14:50Her holding period is 10 years.
14:53Rajesh, from a fundamental standpoint, can she continue to hold Tata Chemicals to eternity?
14:59Because my sense is she wants to hold it for the next 10 years, which is commendable.
15:04See, holding for 10 years, a company like Tata Chemicals is a good theory.
15:11But what I would suggest is keep on tracking the quarterly numbers, other corporate actions and all.
15:18Otherwise, fundamentally, it's a very strong company and a strong caustic soda chemical is doing very well.
15:25They have some holdings in different companies, which are also doing well.
15:29I think for a long-term horizon, it's a good company.
15:32But for 10 years, you need to keep track on fundamentals every quarter.
15:35They come out with numbers and all.
15:37So keep a track on the performance and continue to hold.
15:40Any alternative to this one that you may recommend for a 10-year hold?
15:46For a 10-year hold at this point of time, I would suggest in the large cap space,
15:50we have recommended our clients for Reliance, HDFC Bank, ITC, and Larsen.
15:57Rajesh, I'll stay for you for the next query as well.
16:00And this is from Karthik from Palakkad.
16:02He has about 100 shares of Dream Forks and bought it at a price of 440.
16:07What is your view on this one for the next one to two years?
16:13It's for me?
16:14Yeah, for you, Rajesh.
16:15View on Dream Forks for the next one to two years.
16:18See, this company has underperformed quite massively from its highs of almost Rs.900
16:25to trading at Rs.450 when Nifty is trading at all-time highs.
16:29The numbers have been not that good.
16:31Last two, three quarters, the performance has been bad.
16:34And with the number of credit card users being denied lounge access services,
16:39I think there is pressure on the bottom line too.
16:43So it's better to book short-term profits in this stock
16:47rather than going for a long-term story unless some new corporate action
16:50or new announcements come in.
16:53Okay, Vaishali, let me come to you.
16:55We have Vinay here who holds Shipping Corporation of India,
16:582,000 shares at Rs.329 apiece.
17:02Your views, if any, on this one?
17:07So I think overall, Shipping Corporation and all the other stocks have done very well.
17:12But right now, we have seen that, yes, it is in the consolidation
17:15after making the recent dive.
17:17So I guess, continue holding but maintain a stop-loss
17:21because below Rs.245, it would negate the view.
17:24And the stock needs to pick up, I mean, about Rs.296 to Rs.300.
17:29He may retest the previous highs.
17:31So I would say you hold with a stop-loss.
17:33Okay, and let me stick with you, Vaishali.
17:36Same viewer also holds 2,000 shares in Hardco at Rs.335.
17:40Your views on that one as well?
17:41Because it's making a loss for him.
17:44Okay, so Hardco also has got into a consolidation phase.
17:47But however, the long-term trend is still intact.
17:50So I would say just hold with a stop-loss of Rs.270
17:54because this stock also can get into a new round of momentum right now
17:58because it's already in the oversold.
18:00So we can see some pullback coming in.
18:02Okay, so that was the view on Hardco as well as Shipping Corporation.
18:06Now for the next query, this is from Jayakrishnan from Calicut.
18:09He has about Dixon shares at a price for a medium-term holding.
18:14Vaishali, I'll come to you on this one.
18:16What is your view on Dixon Technologies?
18:18How does it look in charts?
18:20Well, the stock has really run up.
18:21But I think still there is some more steam.
18:23So continue holding.
18:24This can go towards Rs.14,000 levels as well.
18:28Vaishali, plenty of viewers now coming in with regard to short-term views.
18:32Zomato, average price Rs.262 is what a viewer has.
18:37Vinod Sharma from Delhi specifically.
18:40Now he has bought 237 shares of Zomato at this price.
18:45Your view from a short-term perspective?
18:48So from a short-term perspective, Rs.240 is the support range
18:51and Rs.280 is the resistance range.
18:54So either of the levels, if it breaches, need to act accordingly.
18:59Okay, Rajesh, let me come to you.
19:01We have a viewer, Tejas from Nashik, holds 200 shares of DLF.
19:06Now this entire pack with regard to real estate,
19:10it's seen a sharp run-up when you're zooming out over the two-year time frame.
19:15But how does DLF now look over the next two years, if you can give us your views?
19:22See, for the next two years, it can be a good story.
19:26But in the short-term, as you said, it has shown a sharp run-up.
19:29There might be some phases of consolidation or correction.
19:32But for two years, it's a good story.
19:33The company has gone for debt reduction.
19:35Some of the major premium projects have been sold out very swiftly, I would say.
19:41And the number of new projects coming up is also great.
19:44The demand from HNI and Ultra HNI investors has been great in DLF.
19:52For the real estate pack, I would say, not the stocks.
19:55And one can continue to hold.
19:57And I also want to club this with another query.
20:00We have Kapil from Ajmer, who holds Macrotech Developers.
20:04Your views, Rajesh, between Macrotech, DLF, some of the real estate players.
20:10What's the best way to play this?
20:12See, the best way to play real estate as a whole for retail investors would be to go for ancillary industries.
20:18Because real estate as a play has a whole lot of problems like inventory, corporate governance, and all those things.
20:26It's better to play from the housing finance sector or PVC pipe sector, ceramic tiles, paints.
20:33That would be a better play for retail investors to play real estate.
20:36But if somebody wants to go directly into real estate stocks,
20:40I think Soba Developers, Oberoi Realty, or Godrej Properties are better bet than the others.
20:47Okay, Soba, Godrej, the preferred picks for Rajesh over here.
20:49Rajesh, I'll stay with you for the next query as well.
20:52Shekhar from Tamil Nadu, who owns about 300 shares of Mannapuram Finance.
20:56And this is at a price of 160 each, currently at a profit figure of 1.6.
21:01He's earned a profit of about 16,000 on this one.
21:04What's your outlook on this for the next 5 to 10 years?
21:08See, we are not very positive on this stock or any gold finance company for the next 5 to 10 years.
21:14Because a lot of things depend on the gold prices, that commodity cycle goes up, goes down.
21:19So it's better to be in a larger NBFC sphere for a longer term horizon,
21:24maybe a Bajaj FinSev or a Jio Financials are better bets in the entire NBFC space.
21:30For a short term, yes, Mannapuram can be held for a target of 225 to 230 odd rupees.
21:35But for a longer term, as you said, 5 to 10 years, I think Bajaj FinSev or Jio is a better bet.
21:41Okay, Jio, Bajaj FinSev on Rajesh's radar.
21:44But completely out of time on this edition of the Ask Profit show.
21:48From myself, Anushi, thank you, actually, Rajesh as well as Vaishali.
21:53We'll let you go on that one.
21:55From Anushi, myself, everyone who puts the show together, thanks so much for watching.
21:59Stay tuned, more on the other side.
22:01And of course, do tune in for those who haven't got their queries answered.
22:06We'll try to take your queries tomorrow.
22:44Transcribed by ESO, translated by —
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25:22Hello, and welcome. You're watching NDTV Profit.
25:24I am Agam Vaquil.
25:25Well, in the light of the launch of his new book, What Went Wrong with Capitalism,
25:30Richir Sharma spoke to market veteran Ramesh Damani in an NDTV Profit exclusive.
25:36Listen in as he explains why the United States
25:40is slowly moving away from its capitalist roots and why strong domestic investing
25:46endeavor may aid India going forward.
25:49Well, in terms of, this is not my view in a way, which is the fact that, or not just my view,
25:56why did I write this book, right, in terms of what went wrong with capitalism.
26:00It's despite this incredible wealth creation that's happened at the top.
26:04If you look at the average person, especially in the Western countries,
26:09in places like even America, that has been such a standout economy for so long now,
26:14most Americans today feel that the economy or their country is moving in the wrong direction.
26:20In fact, two-thirds of Americans feel that the country and economy are moving in the wrong direction.
26:25Most young Americans today, which are not, in terms of, especially if they're Democrats,
26:31they feel they would rather have socialism than have capitalism. So, there's a huge angst in America,
26:38in the Western countries about what really went wrong with capitalism and often the solution that is coming up.
26:46And we're seeing this even in the presidential campaign. If you hear people like Kamala Harris,
26:51even parts of Donald Trump's campaign out there, it calls for more and more government intervention.
26:56More populism. But I'd say more than just populism, it's about government intervention,
27:01that the government's the answer. Whether they talk about price controls, whether they talk about
27:06greater spending, greater subsidies and even people like Trump about greater tariffs.
27:12These are all anti-market solutions is what they're talking about. So, there's clearly somewhere a greater,
27:19sort of, I mean, there's a distrust of what's happened in terms of like the results that have come,
27:25that capitalism has worked for a few. It's led to this creation of incredible companies, oligopolies,
27:32and lots of billionaires, as you point out. But why is the average person in so many of these countries,
27:38and the situation's even more dire in the Western nations of France or UK, why is so many people feeling so disaffected?
27:46So, the book is really an examination of that. And the conclusion that I reach in the book is, in fact, an ode to capitalism.
27:54It says that capitalism did not fail. It was ruined. And it was ruined by the series of government intervention
28:00that we have already seen from greater bailouts that take place that help the rich from the…
28:05That's 2008.
28:06Yeah. No, in general, I chart the history of bailouts, which is that I say that in America,
28:12it was not the culture of the American government to bail out private sector companies.
28:16Correct.
28:17So, for instance, for the first time in 1984, you had a bailout of a major financial institution.
28:23Savings and Loans Bank.
28:24No, that time was Continental Illinois. And then you had Savings and Loans in the late 1980s.
28:29And then you had LTCM in 1998. And you had a series of actions after that,
28:34where the bailouts have gotten bigger and bigger each time. And that leaves the average person feeling very disaffected
28:40that, okay, these great bailouts are happening for the rich and the almighty.
28:44And they are getting more and more entrenched. What about me? And then, like also,
28:49what's happened to capitalism in America? The beacon of capitalism is now instituting
28:543000 new regulations a year. And the total number of regulations that they have withdrawn
28:59over the last 20 years has been 20 in total.
29:02It's not really free. Is that what you are saying?
29:04Yeah. So, what is capitalism at its core? I begin the book, you know, with my journey in India,
29:10with my growing up in India.
29:11As a socialist.
29:12As a socialist country. And then for me, the value of capitalism, even when I was at a young age,
29:17was always that capitalism is about giving people economic freedom.
29:21You give people economic freedom and you let their individual initiative flower.
29:27That for me is the core of capitalism. And that economic freedom I feel has been
29:33increasingly taken away by bigger and bigger government over time.
29:36And that's distorting capitalism.
29:38I mean, it's a fair point. But as you yourself pointed out in the book,
29:41one in ten CEOs in American tech company happens to be Indian. And Indian has risen to the
29:47heights of pinnacle power by being the presidential nominee for a major party in America.
29:52So, opportunity is still there. Freedom is still there. Are you a capitalist at heart or a socialist at heart?
29:58No, no. I am a complete firm believer in capitalism. But for me, the definition of capitalism
30:04and what capitalism is today has been severely distorted.
30:07I still feel America is a great place to be. It's a place, you know, like there is a little
30:13slogan in the book, in fact, which I use, which I had seen, in fact,
30:16somewhere using it like on a placard, which is that someone was protesting against American occupation.
30:22Yankee, go home, but take me with you. But take me with you. So, it's still a great place to be.
30:27But I at heart have prospered as well from capitalist system. There is a lot of good that America has to offer.
30:34But when the beacon of capitalism, the so-called land of the free today has become a
30:40place where capitalism has been or is increasingly distorted
30:44and you feel so many young Americans are saying they would rather have socialism than capitalism,
30:49I wanted to write a book to examine what's happened, why have they lost faith in the current
30:55economic system and possibly what can be done about it and then what are the lessons for people like us in India.
31:00Because at the end of the day, we are still moving in a capitalist direction. But we are still
31:06far away from being a truly capitalist country.
31:09I'll get to that, Richard. But I wanted to ask you, you said you are capitalist at heart and you have prospered.
31:13But you are not on the billionaire's list. Does that bother you? Of course, in terms of that, who wouldn't want to be a billionaire?
31:18Yeah, but why, the opportunity was not there or you felt you were short of that opportunity?
31:23No, in terms of, listen, there are only 3000 billionaires in the world and it's a very…
31:27You saw markets and you saw economies way ahead of other people. So, really the opportunity was there for you.
31:32I am very grateful for what I have been able to achieve. There is no end to it. I can look at the
31:383000 people and say, why am I not there? Or I can look at the 7 billion people
31:41in terms of in the rest of the world who possibly sort of are still struggling, you know, to make enough
31:49to even have one decent vacation a year and much poorer in places like India.
31:54The glass is half full for you. For me, in terms of that, I am very happy with what I have been able to get.
31:59But there is no end to this creative dissatisfaction. And I guess, I sort of have two careers in a way.
32:05I am an investor, but I am also a writer. And I am very happy at being able to do both.
32:11And I guess, rather than focusing my attention on just one. So, I think that's…
32:17You are magnifying the world through your writing. So, let me ask you to magnify.
32:21Interest rates have a huge bearing on financial markets as you know. In fact, more than even precedents have sometimes.
32:27There have been two benchmark chairmen of the Fed who had different strategies.
32:33Paul Volcker in the 1980s and Alan Greenspan later on. Critique them for me. Who did what and who was right?
32:41Well, Volcker will, I think, in the pantheon of central bankers go down as possibly the greatest central banker.
32:48Why? – Because he squashed inflation. And remember, nothing is worse for the poor and for the average person than inflation.
32:55We know that in India as well. In fact, in India also, as I say, that we don't know whether economic growth wins you election or not.
33:01But high inflation definitely loses you elections. – Take out the bums. – Yeah, throw the bums out.
33:06If you have high inflation, that's the sentiment which comes. But now, in terms of, you asked me specifically on Volcker's Greenspan.
33:12Volcker fought this huge battle to squash inflation, generally through having tighter money.
33:17You know, right? In terms of, and he also cut interest rates when he had to cut interest rates after inflation was vanquished in a way.
33:24And in the mid-1980s, he was cutting interest rates. Greenspan, as you know, was fitted.
33:31In fact, in our investing years, when in India and in the early years, the biggest hero used to be Alan Greenspan.
33:37And then he got thoroughly discredited. And I think when we look back, and I capture that in the book as well,
33:42that one of the big turning points in capitalism, possibly for the worse, was in 1987.
33:47He had just taken over as the Fed chairman. – And the Dow crashed. – The stock market crashed by 20% on that black Monday in October.
33:54And as a reaction to that, for the first time, a Fed chairman decided that he is going to explicitly prop up the stock market
34:03by cutting interest rates and pumping more liquidity in the system. And so, that changed the risk behavior, I think, for investors too,
34:10which is that they knew that Greenspan was there. – The Greenspan put, as it's called. – That's right.
34:17So, you know, like, you are well versed with these terms. So, that the fact that Greenspan is there to protect us on the downside.
34:24Backstop the market, yeah. – But on the upside, it's all free. Right? So, it became a sort of system now,
34:30where it was capitalism on the upside. You can capitalize your profits, but your risks will be socialized,
34:36because at the slightest hint of any trouble, the Fed's there. And the reaction function has continued now.
34:43As you know, that earlier this month, there was a one-day big fall in global stock markets.
34:47And what happened after that? Everybody was rushing out to say the Fed needs to come and cut interest rates right away.
34:53And the Fed seems all set to cut interest rates in September. So, that's the reaction function.
34:58But when markets are going up, no one talks about raising interest rates. No, no.
35:03But when markets are going down at the slightest hint of any trouble, oh, we got to do something to rescue markets from falling.
35:09It's this asymmetry and risk is what I focus on the book, that this entire thing that no wonder you have the
35:15critiques of capitalism saying today that this is socialism for the rich.
35:19Because when you are behaving in this way, who are you benefiting? Right? You are benefiting the entrenched.
35:24You are benefiting the existing people who have a big stake in the system.
35:27You are benefiting the asset owners who tend to be rich people. The poor people don't own assets.
35:32And hence the rise of zombie companies as you call it, right?
35:35Yeah. So, zombie companies is the other side of it. So, on one end, if you have so much easy money being poured into the system,
35:41it allows the rich, the entrenched to become richer because they have access to that easy money.
35:46At the other end of the spectrum, I call this zombification of capitalism that when you have a lot of the
35:52deadwood in the system is kept alive, that is also what leads to inefficiencies and explains, as I say in the book,
35:59the productivity paradox that why do we have a decline in global productivity growth taking place
36:04when you have such a proliferation of new technologies out there. And as I say about the zombie companies,
36:10one of the most fascinating, I think, aspects in the book is that, you know, in the 1980s and 1990s, this term became popular in Japan.
36:17Yeah. Right? Because why? Because in Japan, the economy was going bust and they decided back then that we got to prop up these
36:24companies by easy money and stuff and they came to be known as zombie companies.
36:28These were companies that did not earn enough profits to even cover their interest payments for three years in a row.
36:33The American media back then, including the very liberal left-wing media such as the New York Times and stuff,
36:39would in fact mock these companies saying that this is America, we don't do this, you know,
36:45keeping alive zombie companies. At that point in time, the number of zombie companies in America was about 2%
36:51of the total number of companies listed in America. Today, by some measures, that number is as high as 20%.
36:57Of zombie companies in America? Yeah. The 20% of companies listed in America today can, by some definitions,
37:05be classified as zombie companies. And even by conservative definition is about 10%.
37:10So, I am just trying to just see how capitalism has changed. And there are consequences of this.
37:15Because the question some people ask me, okay, so what? That you have all these zombie
37:20companies and the government is rescuing, but the economy is, you know,
37:23like still doing okay and stuff. No, there are two major consequences of what's going on.
37:27Yeah. One is that productivity growth has declined. Because when you are interfering with the
37:33creative dynamism of an economy, you are interfering with the productivity mechanism in the economy.
37:38You are not allowing the deadwood to be cleared. And by keeping the deadwood there,
37:42you are discouraging new people from coming in at the pace that they should be coming in.
37:46And so, that's the second consequence out there, which is that you are helping the entrenched, you are helping the incumbents.
37:52And so, therefore, even in America, right up until the pandemic, the number of new startups was declining.
37:57And now you have a situation where the big companies, you know, like are there and for longer at the top end.
38:05And you have at the bottom these zombie companies floating and everything else in the middle is getting squeezed out.
38:11So, if you look at even America today, the economy seems to be okay at the surface.
38:15But confidence among mid to small size businesses is plummeting. So, I think that is the dichotomy.
38:22And the large firms are doing well. Right. Interesting conversations there between
38:27Richie Sharma and Ramesh Damani. But we should focus back to the markets which are in fact,
38:31which have in fact made new life highs. And I'm talking about the Nifty specifically.
38:35And joining us now, we have Avinash Kaurakshakar of Profit Now Securities.
38:39Avinash, well, good afternoon. Thanks for joining in. Avinash, before I come to you, as usual,
38:44let's take up the first company on our radar. And that is Reliance Industries,
38:48which will present another annual general meeting soon.
38:52We have Mihika who is joining us to give us what we can expect. Mihika, over to you.
38:57The Reliance Industries 47th Annual General Meeting is set for tomorrow, August 29th.
39:02And this will start at 2 p.m. But when we talk about what the street is expecting,
39:06well, there's not much cheer as the key listings that the company has announced over the years
39:10may get extended and no major announcements are expected. In terms of unlocking shareholder value,
39:15the company may give information on three potential listings of geo-platforms,
39:19Reliance Retail Ventures, as well as Reliance New Energy. However, according to both our securities,
39:25it doesn't expect any major unlocking of value. For the retail segment,
39:30well, the street is likely to see any future launch formats, the possible investment into quick commerce segment.
39:36And the company has also been foraying into beauty and apparel segment.
39:39And the street is looking, you may see an announcement with Global Manufacture Sheen.
39:43As for the digital business, well, the Disney-Wirecom Combined Entertainment business has made headlines,
39:49so further details on the same. In terms of the new energy business, well,
39:53the company has planned out $10 billion of investments. However, the progress has been slow.
39:57Only $2 billion has been utilized. The clear timeline of the fully integrated solar module ecosystem is expected,
40:04was going to come on stream in 2025. They're also going to confirm timelines for battery gigafactories by 2026.
40:12And the company is also expected to foray into the manufacturing of big wind blades.
40:16As for the oil to chemical segment, which is the cash on a business for the company,
40:20unlikely to see any major investment announcements. The company could talk about supply chain routes as well as their crude supply decisions.
40:28And lastly, in terms of oil and gas, the company could give an update on their new Krishna Godavari Basin wells.
40:34And the street already has discounted the FY26 earnings on multiple headwinds,
40:39especially the ban of single-use plastics in the medium term. In terms of how the shares have performed,
40:45well, data shows that reliance has have declined on most annual general meeting days.
40:49Stocks have fallen in the last seven out of the last 10 days.
40:53This counter declined as much as 6.2 percent in 2020.
40:57And during the 2023 annual general meeting shares saw loss about 1.5 percent on an intraday basis.
41:02Lastly, there was only one outlier, which was the 2019 annual general meeting where there was markets were not open that day.
41:09And the shares did rise 12 percent the day after due to a key deal announcement with Saudi Arabia's Aramco.
41:17All right, Mehika, thank you so much for getting us all that we can expect from Reliance Industries AGM tomorrow.
41:23But, Avinash, coming on Reliance in general, your view here, what's the way forward?
41:29I think, Agam, my sense is one should not expect major fireworks or big announcements.
41:35But I think, yes, some indication the market is building in that whether the retail business is getting ready for some sort of value unblocking.
41:43So I think, you know, any commentary on that would definitely be something sentimentally positive for the stock.
41:49But I think broadly, you know, I think the markets would obviously like to know on the digital side, especially on the geofinance kind of business.
41:57What is the commentary of the management? Because this business is now got listed.
42:01A major disruption is expected in the next one to two years.
42:05So what kind of growth plans this company has got and how it's going to scale up its business is something the market should be looking forward.
42:11The existing business like the telecom business, the oil and gas business, I don't think there are going to be any major announcements.
42:17But, yes, I think markets would obviously like to know what is the kind of tailwind there.
42:21So I think the geofinance business is going to be critically important this time.
42:25Now that the business is listed, I think most probably markets are expecting some big announcements to be announced from this division,
42:32which I think would be, you know, obviously be highlighted by the management tomorrow in the annual general meeting.
42:37Of course, we need to keep an eye on that one. But let's move on to talk about the infrastructure.
42:42Now, there are a lot of relatively smaller names with a lot of updates with respect to order wins, as well as raising of funds and many others.
42:51Let's get in Anushi to give us a roundup of all these infra and power companies which have been focused on the back of news updates.
42:59Anushi, over to you.
43:00Hey, Agam. So as you speak, there have been a handful of names and which have been in focus as for the fund raise and the project wins which have happened.
43:08I'll start off with Asian Energy first. Now, Asian Energy is planning to raise up to 160 crores.
43:13Now, this is via warrants. And the purpose to utilize these net proceeds will be for exploring more growth opportunities.
43:20For enhancing their working capital requirements and also for other general corporate users for the business.
43:26Moving on to SPL Infra now. Now, the company is raising up to 331 crore on a preferential basis.
43:32And this is at a price of 215, which if you take at the current market price is about an 11.6% discount figure that we are looking at.
43:41So this is on the bit of Asian Energy and SPML Infra. Third one also is Indigrid Trust.
43:47Now, here Alberta Investment and HDFC Investment Corporation and HDFC Life will invest up to 567 crore and 100 crore respectively, which adds up to 667 crore.
43:59The company had earlier stated that it plans to raise up to 695 crore through this fund raise.
44:04And this is after it already had a follow up from its successful OFS which took which is the offer for sale which happened earlier.
44:12Now, coming to this order win part, PNC Infra is in focus. Now, here they have won highway projects of up to rupees 380 crore in UP and Bihar.
44:21It emerged as the lowest bidder in these and the project value as we speak is 380 crore. Project is to be executed in the next 910 days.
44:30And if you look at the consolidated order book for PNC Infra, that stands at about 14,100 crore.
44:36So, 4 companies in the Infra space and the power space which are in focus ahead of the fund raise and the order wins which have taken place.
44:43Okay Anushi, thank you for getting us that round up of all the Infra and power companies in focus.
44:48Avinash, wanted to talk about the Infra sector with you in general.
44:52With your firm, are you spotting opportunities in the infrastructure space? Any names that look interesting to you at the moment?
45:01I think, Agam, the kind of contracts and the orders which are coming to Infra companies is quite encouraging.
45:08In fact, one of the names PNC Infra Tech as well as PSP projects and KNR constructions.
45:14These are companies where we believe that a lot of EPC work has come in in the last 3 to 6 months.
45:19Now that elections are over, the project momentum of awarding these new orders has started gaining a lot of traction.
45:27And we believe that FY25 should be significantly better for these companies considering the fact that now top line and order book is going to be significantly better than last year.
45:36So, I think it's a pick and choose in this market. I would say that wherever the order book is very strong, the execution is pretty solid.
45:43I think these are companies which possibly could see a lot of traction in the second half of FY24-25.
45:49So, I think we are continually positive on these companies.
45:52Maybe in the first half, you could see a little bit of sluggishness.
45:55But the second half typically is supposed to be a very strong period for these companies where execution is going to be significantly higher than the first half.
46:02Okay. Well, Avinash, hold that thought. Let's also get in Mihir Vohra.
46:08He's a CIO at Trust Mutual Fund who's joining us on the show right now.
46:13Mihir, good afternoon. Thanks for taking the time out.
46:17Your quick view on how the benchmarks have behaved and performed right now.
46:22While some may argue that we are at expensive valuations, there is another pocket in the market which suggests that there's a lot more to come.
46:31Now, let's just stick with the Nifty 50 and perhaps the large cap stocks because I want to take up the broader markets as well.
46:38But for now, what is your own assessment on the large cap valuations?
46:45Hi. First of all, congratulations to all of us.
46:52I never complained when the markets are in a new high.
46:55So, the point is that Nifty earnings this quarter have been muted, but that's at the aggregate level.
47:03In fact, if you look at the broader market of private stocks, the earnings are single digit compared to what they were a few quarters ago.
47:13So, obviously, the margin scale is no longer there and now we are back to normalized margins and normal growth.
47:20So, if you look at the valuations of the large cap in aggregate, I would say they are a little expensive,
47:26but not really so expensive that one needs to be worried about.
47:30And there is enough scope for stock fitting within the segments also.
47:34For example, financials is the largest segment.
47:38But within financials, the lenders have underperformed banks and NBFCs for quite a few quarters.
47:43So, there is pocket of value emerging in some quarters like that.
47:47Probably, we can also say that some of the other segments like consumer discretionary,
47:52even some of the large cap names in cap goods and infra have not done as well as some of the mid and small caps.
47:59So, there is relative value to be found in the market across market caps, I would say.
48:04Sure. So, I was actually taking a look at the kind of returns that we have seen for the mid cap
48:08and the small cap indices advancing by around 28-29% year to date.
48:13In comparison, we have seen the Nifty advance by around 16-17%.
48:17So, that's clear outperformance when it comes to the broader markets.
48:22Now, your assessment of whether or not there is froth in mid caps and small caps largely at the moment.
48:30Certainly. So, there is froth and there is obviously shock, frankly speaking.
48:37And I would say that it's time to be a little bit more choosy compared to before
48:43and not really go down and compromise on the quality of the companies that you are investing in.
48:47So, the rally is quite broad-based.
48:50As you rightly mentioned, the small caps, the micro caps are seeing a lot of retail action.
48:56And obviously, when retail is there, not everybody is so discerning in terms of quality
49:01unlike the HNIs or the institutions, so to say.
49:05So, I think as retail investors, one needs to be careful about really getting trapped into something
49:11that you regret later, so to say.
49:13But having said that, the economic activity recovery itself is quite broad-based.
49:19You are seeing nascent signs of rural consumption coming back.
49:23You are seeing some nascent signs of even the mid cap and the private sector
49:28starting to invest in manufacturing capacity creation.
49:31So, I think we are in for a decent cyclical run.
49:35And probably, we are at the beginning of that run and this can last for a while.
49:38So, I would not be too worried at the aggregate level, both in terms of growth prospect as well as valuation.
49:47All right.
49:48Of course, to a certain extent, the extension in the market rally at the moment is a function of liquidity.
49:55Now, off late, what we are seeing is that FPIs have turned buyers.
50:00I know it is not for a very long period, but domestic institutions, on the other hand,
50:05have continued to buy new Indian equities.
50:07And I suppose that is largely because retail participation has had plenty of flows come through as well.
50:15At what point in time do you think that there could be a challenge when it comes to the liquidity at the moment?
50:21And any other factor that you could potentially see when it comes to, which could pose a risk in the current environment?
50:31So, right now, things look hunky-dory because we are talking about the Fed beginning to ease the cycle,
50:40start interest rates as soon as next month.
50:42RBI probably will do it after three or four months after the Fed.
50:47So, as far as the peak tightness or the peak interest rates are concerned, I think they are pretty much there.
50:55So, things can only go better from here.
50:58There can be headwinds if there are commodity shocks like oil because of problems in the Middle East.
51:05Or if the U.S. really slows down much faster than expected, much worse than expected,
51:09those could create headwinds to the overall growth story.
51:14The flip side is that we are not that dependent on exports, though we should be exporting much more,
51:21but in general, we have a trade deficit.
51:24So, we should be relatively less impacted by a U.S. drop.
51:28But that is something definitely to keep in mind.
51:30There could be global headwinds.
51:32And a final question then, Mihir, on how markets are being seen globally,
51:37how Indian markets are being seen globally.
51:40Now, there is a chance that the Federal Reserve could potentially cut rates
51:44or start the cycle of cutting rates come September.
51:48What sort of an impact could it potentially have for emerging markets like India going forward?
51:55That could potentially have a positive impact, as I said.
52:00One is that liquidity conditions will ease.
52:03That's one good thing.
52:04Second is that dollar strength will no longer be a concern.
52:08Typically, when the dollar strengthens, it tends to pull money away from all markets,
52:12back towards the U.S.
52:14And when it gets cut, we should see the dollar weakening.
52:19In fact, in the last few days, we've already seen the DXY index,
52:23which is the dollar index against the market of global currency, is already beginning to weaken.
52:28So that should ease the pressures on emerging markets,
52:30and if the dollar continues to weaken because of rate cuts,
52:33then you can actually see good flows to emerging markets recharge.
52:37So I think that could have a positive impact on flows.
52:40Okay, Mihir, we'll leave it at that.
52:42Thank you so much for joining us and taking some time out
52:45and talking to us on the occasion of Nifty making yet another new life high.
52:50But with that, it's all that we have on this edition of Hot Money,
52:55but lots more lined up on the other side.
52:57Stay tuned to NDTV Profit, and we'll keep getting you more.
54:57Hello and welcome.
55:18You're watching the IPO show.
55:21We have with us a special guest who joins us
55:24and who's been tracking the primary markets for decades now.
55:28Aastha Jain, Senior Research Analyst of HEM Securities joins in.
55:31Aastha, you've obviously had it extremely busy all of 2024.
55:35It's the time and the season of listings.
55:37I'm going to start with Orient Tech.
55:40This one, of course, listed on the exchanges today,
55:43was subscribed 152 times, got a debut with a 46% gap up.
55:49Now over to you for questions.
55:52What does an existing investor who managed to get lucky and get subscribed to Orient Tech do?
56:00Should they take some profits off the table today?
56:03B, if they weren't lucky enough to get an allocation to Orient Tech,
56:07should they consider buying it today?
56:10Hi. Good morning, Samina.
56:12First of all, yes, a very busy month, very busy week.
56:15And from last two years, we are seeing the trend that usually August and September
56:19are usually very hot months for the IPO.
56:22And the number of the IPOs are quite high in these two months.
56:25So, yes. Now talking about Orient Technologies,
56:27first of all, they have already recommended subscribe for this IPO.
56:30And we really congratulate to all the allottees who got this allotment.
56:36So what should they do?
56:37I think they should book partial profit because now when the IPO came,
56:41it was at the price to earn a multiple of somewhere around 2021.
56:45But now at this high price,
56:46because now we are seeing that it is already quoting at 44-45% premium.
56:50So I think the valuations have become a little more expensive
56:54and we are not seeing a much upside from here.
56:57Maybe one can see the upside of around 10-15% more from here.
57:02But now the upside, there is not more upside left from here.
57:06And that's why we are recommending to book partial profit
57:09if anyone has got the allotment in this IPO.
57:12But for those who have not received any sort of allotment,
57:15please don't be in a hurry to enter into this IPO.
57:19The company is already quoting at a high premium multiple of more than,
57:23I think, around 25 at this price of around 302 or 303 at which it is quoting right now.
57:31So just wait for some dip to come and then make entry into the stock
57:35because the upside is now limited from here.
57:38So from the risk reward basis,
57:40I think it is not advisable to put money currently at the price of around 303-304
57:46at which it is quoting right now.
57:48Just wait for some dip.
57:49Let the price fall to the level of around 280 odd levels
57:53and then make entry into the stock.
57:55So those who have got the allotment, they can book partial profit.
57:58But those who want to make a new entry,
58:00as they were unlucky at the time of allotment,
58:02they should wait for some fall and then make entry into the stock.
58:06This is what our recommendation is for ODEON Technologies at present moment of time.
58:10Take your profits off the table.
58:12Don't get caught.
58:13It's a great debut.
58:14But, of course, wait it out because it does look expensive,
58:17especially after the sort of run-up the stock has seen on listing day.
58:21Well, one on top, of course, on top of our minds is Premier Energies.
58:28Premier Energies is the largest solar cell exporter to the U.S. market in FY 2024.
58:35Ahead of its IPO, Premier Energies mobilized 646 crores through anchor investors,
58:41which included the names like Nomura, BlackRock, PGGM,
58:46Government Pension Fund Global, Abu Dhabi Investment Authority,
58:50Morgan Stanley, to name a few.
58:52How does this one look?
58:53I think there's a consensual, aggressive buy call on Premier Energies.
58:58Would you agree, Aastha?
58:59Because even the numbers were phenomenal
59:01and with the government's commitment to green energy,
59:03this cannot be missed, I would imagine.
59:05And, of course, there's marquee clientele as well.
59:08Yes, you are absolutely right because the kind of concept it is into,
59:13that is into the solar cell manufacturing as well as solar module manufacturing.
59:17So, I think the kind of business they are into,
59:20it is really very hot and the government's support is totally there with this sort of business.