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00:00 housing stocks in hot money. But for now, we are looking at quiet moves as far as the
00:06 benchmarks are concerned. Flat at the moment, not too much to speak for when it comes to
00:11 the Nifty, marginally in the red. The Sensex, it is the same. The Bank Nifty is under a
00:17 tad bit of green looking at for now. And they're all trending largely over not as high volumes
00:26 as one might expect. Now, as far as the benchmarks are concerned, you know, to take a look at
00:31 all those which are advancing, we have Adani Enterprises, which is right at the top of
00:35 the Nifty 50 gainers list. HCL Tech is the other one. HCL Tech will announce earnings
00:41 on Friday. It's up around 2.3 percent. We have Adani Ports as well among the top five
00:46 gainers. That's up around 1.2 percent. And then we have Cipla. Cipla is gaining around
00:51 1.3 percent. In terms of stocks which are under pressure, we have weakness in NTPC.
00:57 This is to the tune of 3 percent. ONGC, BPCL from the oil and gas space are also under
01:04 a tad bit of pressure today, down around 2.4 to 2.7 percent. So we're keeping an eye on
01:09 that one. When it comes to the broader markets, we certainly have a lot more traction with
01:13 respect to price movements. Among the gainers, we have something like a Delivery. That's
01:19 up around 3.8 percent as we speak. And Yes Bank is the other one where we are seeing
01:25 an advance of around 3.8 percent. Z Entertainment, after we understand that, well, Sony has confirmed
01:31 that they are still in fact in talks over the merger with Z. And that also gives us
01:38 a little bit of a confirmation that the deal is not completely off, which is why we're
01:43 seeing advances to the tune of 2.5 percent for Z Entertainment. And of course, in terms
01:48 of those stocks which are looking at declines, Trident is under pressure down 5.3 percent.
01:54 Indraprastha Gas is the other one which is down 3 percent. And NMDC is losing out around
02:01 3 percent. All in all, here are a quiet day of trade when it comes to the benchmarks.
02:05 Perhaps it's a day where stock specific action will be a little more in the spotlight.
02:10 Absolutely. And that's what we are looking at as well. And I think, you know, there are
02:14 some bit of jitters amongst investors as well. And clearly, they are trying to play in that
02:19 broad range of 21.500 to 21.800. There is that consolidation that we are seeing as well.
02:25 But let's look at the Purvankara in trade. Interesting moves coming in with regards to
02:30 real estate as well on the back of the updates that we've seen in the last couple of trading
02:34 sessions with, you know, on Q3. Now, in today's session, you did see Purvankara hit a high
02:39 of almost 11.5 percent. Currently, we are seeing gains of almost 6 to 6.5 percent coming
02:45 in there. My colleague Anushi joins us with more details in terms of how have the numbers
02:50 panned out so far and what does that actually tell you about the third quarter. Anushi,
02:56 over to you. Right. So, another remarkable quarter for Purvankara as we see. The company
03:02 did report about a sales growth of about 56 percent in Q3 of FY24, while its sales volume
03:08 also saw about a 60 percent uptick to 1.63 million square feet. However, it was the realization
03:16 which was down by about 2 percent due to an adverse product mix across it. But this was
03:21 the Q3 FY24 highlights. But when it comes to the nine-month FY24 highlights, the sales
03:27 value was about 89 percent up at Rs. 3,967 crore, which was its highest ever again, while
03:35 the collections saw about a 57 percent uptick to Rs. 2,515 crores. The company also did
03:41 see about two new projects launching in the third quarter. So, a strong update over here
03:47 and we did, as you mentioned, the stock is like 11.5 percent intraday high and just 130
03:53 percent up in this past six months itself. So, that was all of Purvankara. Right. Thanks,
04:00 Anushi, for getting us the details and that's with regards to Purvankara. Another stock
04:04 that has been in focus, Agam, today is a Delta Corp as well. If you can just quickly pull
04:09 that up on the screens and see what's happening because it's absolutely interesting. We've
04:13 already spoken about the GST demands that have come in, but obviously, they've not really
04:17 made any provisions so far for the GST demand. So, that is something that we need to watch
04:22 out for from an earnings perspective. But clearly, the kind of weakness that we've seen
04:27 in the earnings and that's because of the major two businesses, which is the online
04:32 gaming and the casino, that is where a dip in terms of revenues have come in. Right.
04:36 Though the hospitality business has done really well, but that's a minuscule portion in terms
04:41 of the contribution it gives to its revenues. So, clearly, there has been an issue with
04:47 Delta Corp on that front, but how that progresses and what is the kind of provisioning that
04:51 they will have to do with regards to the GST demand is going to be crucial. So, two things,
04:55 Zaheerul, I wanted to mention in case of Delta Corp is that the quarter gone by is potentially
05:00 the biggest quarter when it comes to the gaming business because that's when tourism is also
05:04 at its highest in terms of its peak. And secondly, the kind of numbers that the tax provision
05:13 has been asked for is something that the size of the Delta Corp may not be able to provide.
05:20 But of course, we know that the case at the moment is sub judice and well, at least, prima
05:26 facie, the numbers that have been asked for from in terms of GST from the company, they
05:31 seem substantially larger than one might expect because it's been on a gross number as compared
05:38 to a net revenue number and that perhaps, of course, way down on Delta Corp. But that
05:45 weakness as far as your operational metrics are concerned as well is also something which
05:50 is not boding very well with respect to, well, you know, Delta Corp. But we in fact do have
05:55 Mahima who can perhaps give us some more details with respect to, well, not Delta Corp but
06:02 Starbucks India and the kind of journey that has been jotted with losses. Mahima, good
06:08 afternoon. What do you have for us?
06:09 Right, Agam. So as you rightly mentioned, Starbucks journey has not been quite impressive.
06:17 If you see the Starbucks, overall if you see Starbucks is a JV between Tata and Starbucks
06:25 and the current stores in India are operating at 390 stores. But however, they're targeting
06:30 1000 stores by 2028, which means they'll be adding 150 stores every year, which means
06:36 that every three days they'll be adding one store in a year. So but if you see the financial
06:42 performance in 11 years, they've added an operational revenue of only up to 1000 crores.
06:49 And if you see FY23, Starbucks reported a loss of 25 crores. So overall, if you see
06:55 even if the stores are expanding, we can see that it will be pushing the profitability
07:00 further under pressure and it will double the requirement of the equity inflows by both
07:05 Tata as well as Starbucks. And if we check the coffee prices also, Agam, it's interesting
07:12 that Starbucks is in India at present, sells the highest coffee, has the highest coffee
07:17 prices. If you see CC they has around 140 average price of coffee, Barista around 200,
07:22 where Tim Hortons and Costa coffee around 230, 270. Starbucks coffee is priced at an
07:27 average of rupees 300. So I mean, this is one of the factors why probably people are
07:33 not consuming Starbucks as much as you know, they are consuming other coffees from other
07:38 chains. Right, fair enough. Thanks so much for that, Mahima. Of course, Starbucks, while
07:46 it has had a relatively volatile period, there is no doubt about the fact that it has certainly
07:52 been accepted as a premium, a go to coffee brand as far as India is concerned. The question
07:58 really is where can that lead to when it comes to consolidated numbers for Tata consumers
08:04 is something that is going to eventually evolve down the line. But on that note, we shift
08:10 focus towards what we have in store coming up with Kenneth Indrade, the CIO of Old Bridge
08:17 Capital Mutual Fund and founder and director of Old Bridge Capital, who is joining us on
08:24 the show right now. Kenneth, good afternoon. Thank you so much for joining us. Kenneth,
08:27 right at the top, we want you to take us through the new NFO that you have in store for us.
08:36 Can you tell us a little more about that? Surely, we're launching on the 17th of January,
08:46 which is essentially next week. The NFO is going to be open for three working days. The
08:52 category that we've chosen is the focus category. So it's going to be an old bridge focused
08:58 equity fund. And it will be open for subscription on an ongoing basis from the following Monday.
09:05 So this is the product that is there. I think the strategy that encompasses this entire
09:11 product is that we're going to have under 30 companies in this product, which is a regulatory
09:20 definition of number of companies in the focus product. From a structure and strategy point
09:26 of view, I think our USP or our unique selling point is we're going out to create a portfolio
09:37 of companies and businesses, which we think are going to be relevant into the next couple
09:41 of years or to the end, next couple of years to the end of the decade. But most significantly,
09:47 we will also eliminate large parts of industries or big industries that are there, which we
09:53 think are reasonably priced, are in a consolidation zone and will not be able to participate in
10:01 the same momentum as it is going forward. So we're doing the best we're trying to do
10:07 optimize the best of both worlds. So it won't be a very diversified pool of companies that
10:15 we will hold. It will be very selective in a couple of industries that are there with
10:20 notable exclusions. Right. Kenneth, you know, when we speak to you as well, it's always
10:26 whether we will yet see a deja vu coming in from you taking the old fund performances
10:32 into consideration that you've been associated with. But clearly from the breakup between
10:37 mid, small and large cap, what would that divide look like? From a portfolio construct
10:49 basis, we've gone in with a format of a multi cap fund, which gives us the flexibility to
10:55 use use the current market environment to construct a portfolio. While saying this,
11:01 I think our outlook is more is significantly longer than the next year or two years. Investment
11:08 style structure and strategy has always always we've always maintained that we hold companies
11:13 through a life cycle of their existence, a life cycle of their existence. And in some
11:18 cases in my career, I've held them over 10 year periods. Now, to to to capture all of
11:24 that, I think our preferences and and my experience has always been in in mid markets. Now, by
11:34 category, these companies could be mid markets or mid caps. But they but I've always or we've
11:41 always from an investment process bought the largest company in an industry. So when you
11:46 buy a largest company in an industry which is not doing well, they usually at mid market
11:50 valuations. So that's why and that's a sweet spot that we we try to optimize. So the way
11:57 I define a multi cap product, which is the focused equity product, at periods of time,
12:03 we will have reasonably large biases towards mid markets or companies that are evolving
12:08 or companies at the bottom end of their of their industry life cycle.
12:13 Kenneth, you also address how you would manage risk in this particular fund. Can you take
12:21 us through the parameters that you do in fact consider here?
12:29 So being a consolidated portfolio, obviously at points in time, and this is also with my
12:33 experience, the portfolio could go through a reasonable amount of volatility, because
12:39 it tends to be slightly, slightly away from the benchmarks in the sense that we the BSC
12:48 500 has got 500 companies, and we are allocating just about 30 companies to do the entire portfolio.
12:55 So it's about optimizing the entire it is about optimizing the entire 500 companies
13:00 that are out there, which is where I direct ourselves towards I direct the entire structure
13:09 towards it could have a reasonable amount of volatility. But in the past, stock selection
13:14 is very important. And with stock selection, and if you buy them with their financially
13:19 solvent and they are at reasonable valuations, I think that takes care of a large part of
13:24 the volatility risk. Now, if we are able to execute all of that, I think the portfolio
13:28 construct should help in managing that volatility. The risk and that's coming from from from
13:38 from what I have managed in the past is essentially on liquidity risk, because it is a reasonably
13:44 consolidated portfolio and at points in time, we would we would have challenges if markets
13:50 are not in our favor or companies are not going through the right cycle, that some part
13:56 of the portfolio could have a liquidity risk, which is what we are, which we are always
14:01 on top of. Right. Kenneth, I would want to talk to you
14:04 about the valuation and the timing of the launch as well taking the potential valuations
14:11 into consideration. But before that, we'll quickly slip into a short break and be back
14:15 with our conversation with Kenneth Andrade, CIO at Old Bridge Mutual Fund. Please stay
14:20 tuned to NDTV Profit.
14:21 [END]
14:22 Kenneth Andrade, CIO at Old Bridge Mutual Fund.
14:29 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
14:36 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
14:43 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
14:50 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
14:57 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
15:04 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
15:11 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
15:18 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
15:25 [END] Kenneth Andrade, CIO at Old Bridge Mutual Fund.
15:45 [END]
16:03 Kenneth Andrade, CIO at Old Bridge Mutual Fund.
16:23 [END]
16:52 Welcome back. You are watching Hot Money and we are speaking to Kenneth Andrade with
17:07 regards to the timing of the fund now. You know earlier as well when we have spoken to
17:14 you clearly indicated that after 2023, the coming year which is 2024, there is a potential
17:20 market downturn that could be anticipated. Valuations are something which you have said
17:26 are a risk and that is a risk that could be prolonged for quite some time. Now, the timing
17:33 of the fund and the way valuations are panning out, how are you timing it?
17:38 Okay. Again, I go back to my experience. You can never time the market right. And even
17:47 in terms of a fund launch, I have to do it sometime. So, as an organization, we got to
17:53 get this is probably the time that we need to put a fund out in the marketplace and this
17:57 is the reason why we are there. But I think the mood question is how do you manage the
18:02 risk that looks like the market is overvalued at this point in time. And if you look at
18:07 the marketplace today and if you look at the marketplace in 2019, the category leaders
18:15 in 2018 and 2019 were very different from the category leaders which taken the market
18:19 to its all-time high today. It was banks, FMCGs, consumer businesses that were very
18:25 buoyant in 2019. And that bull market was the formation of the bull market that you
18:29 have today. Because the companies that were at the bottom end of the entire spectrum,
18:34 both in terms of valuations and in terms of growth, were essentially the infrastructure,
18:39 energy businesses and anything that had to do with brick and mortar on the ground. I
18:43 think that's how the transition took place between 2019 and 2023. And what's led to
18:48 2020 optimism in the environment right now is also causing some bearishness in some part
18:55 of the entire business metrics that are there in some of the industries that are there.
18:59 Chief among them, we think the commodities are going through a down cycle. You're getting
19:04 reasonable amount of consolidation coming out in some of the erstwhile favorite sectors.
19:09 You think some businesses, a few handful of businesses just taking on their all-time highs
19:16 in market capitalizations. One of the large industries made its all-time high in 2008.
19:26 And some of the companies are just taking out the all-time highs from there. Another
19:29 large industry, which is pharmaceuticals, 2015 was a buoyant period. They're just taking
19:34 out the all-time high periods. So you get a consolidation on industries which are now
19:42 getting buoyant, sizable amount of profitability and cash flows and no financial risk. So I've
19:50 got to control, like the previous question, the risk on the portfolio. And the way to
19:55 control the risk on the portfolio and look at valuations, make sure your companies are
19:59 financially solvent. If they're financially solvent, and even if there is a downturn in
20:04 the environment and ecosystem, they can ride it through and consolidate the market there.
20:09 So I'd look beyond 2024. What I saw in 2023 and what's happening in 2024 probably played
20:17 out the way we thought it would. But we have to look beyond 2024 because I don't think
20:24 we're putting a portfolio together for just one year. The valuation challenges exist.
20:28 I don't deny that. But there is also an opportunity at the other spectrum of the market, which
20:33 is where companies are not doing well. And that will be our focus area.
20:36 Right. Kenneth, we wish you the best for your new fund launch. On that note, we thank you
20:42 as well for taking us through what the fund is all about. And with that, we wrap this
20:49 edition of Hot Money. But there's lots more lined up on the other side. Stay tuned to
20:53 NDTV Profit.
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