Business houses must anticipate, prepare for disruptions: Marico’s Harsh Mariwala

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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All business houses must anticipate and prepare for disruptions, said Harsh Mariwala, chairman of Marico, in an interview with CNBC-TV18. He talked about how entrepreneurship has evolved and the biggest risks for emerging unicorns and traditional businesses and investors in them.

“It’s keeping (new-age businesses) the corporate on its toes and we have seen so many companies which were doing exceedingly well at some stage are struggling now because they didn’t look at all these disruptions proactively. It’s going to happen to each and every category of business. The impact may be different for different types of businesses but wherever there are technological differences, the impact is likely to be much higher,” Mariwala said.

Also Read: Marico Q2FY22: Foods, digital brands, premiumisation of hair care key drivers for growth, says CEO

According to him, new founders are leveraging technology.

“I am very happy that new-age businesses have become so successful that they have been unicorns and I am sure that the emergence of individuals who have made this happen, will be a stellar example to many youngsters,” said Mariwala.

For the entire interview, watch the video

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

As D-Street awaits Paytm IPO listing, what Zerodha’s Nikhil Kamath thinks of new-age businesses

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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New-age companies are the talk of the town as more startups eye Dalal Street for their capital needs. Batting for the often high valuations commanded by new-age businesses, Nikhil Kamath, Co-Founder and CFO of Zerodha, believes the real question to be asked is whether a company will grow for a long time, and not whether the premium that investors pay for it today is justifiable.

The remarks from the CFO of the country’s largest brokerage by client base come at a time when Indian equities have broken a chain of records this year, though experts have warned against excessive valuations.

Market participants often find it hard to value startups, many of which are yet to achieve profitability.

“Maybe the way to value these (new-age) companies is not a multiple of profit like we have valued companies historically because these businesses are different. There is a precedent in America, for example, of companies which were not profitable for a long period of time… companies like Amazon, which have turned it around and are continuing to grow even today. I don’t think we can look at these companies from one lens,” Kamath told CNBC-TV18.

“What we question often is not whether the company will grow and do sustainably well for a long time, but if the premium that we are paying is justified,” he said.

Citing the example of cosmetics-to-fashion platform Nykaa, whose parent made a bumper debut in the secondary market recently, Kamath said the company is expected to perform well, citing its “great management” and “brilliant business model”. In many ways, Nykaa has done exceedingly well, he said.

“Though I might contest the valuation it receives today, the fact that it is a good company that will do well in the next decade, I think that’s not something I’m questioning at all,” he said. Yet, he advises against betting all the chips on new-age businesses.

Kamath suggests doing thorough research before buying into any stock “just because 100 other people around you are buying”.

ALSO READ: Alchemy Capital prefers Nykaa among new-age stocks

Nykaa shares debuted on stock exchanges at a premium of up to 79 percent, making entry among the top 10 debutants of 2021 so far, outshining the likes of Indigo Paints (75 percent), Devyani International (57 percent) and Zomato (51 percent). The company’s primary market offering saw a subscription of 82 times the equity on offer.

ALSO READ: Should you chase IPOs now?

FSN E-Commerce Ventures reported a net profit of Rs 1.2 crore for the September quarter, as against Rs 27 crore for the corresponding period a year ago. That despite a 47 percent year-on-year increase in revenue to Rs 885.3 crore.

“When one enters the stock market, especially companies where valuations are not easily understood, it is important for retail investors to remain extremely cautious,” he said. Speaking on the overall market, Kamath warned of “plenty of turmoil ahead”.

One97 Communications, owner of the Paytm digital platform, is set to hit the secondary market on November 18.

Kamath said he wouldn’t ask investors to stay away from Paytm. “I haven’t researched Paytm to the extent that I could give you an expert opinion on it. Some very smart investors, like SoftBank, have bet the bank on it and they seem optimistic about the future of Paytm and what it could do and what it could pivot into in a way,” he said.

Financial markets are cyclical by nature, as they have always been, and the current irrational optimism in many ways will not continue forever, he said. “One has to remember that to while in a multi-cycle stock market people have to have some amount of caution and practice increased discipline,” Kamath said.

ALSO READ: Zerodha’s Nithin Kamath not keen to jump on IPO train

He also warned retail investors against chasing shares of expensive companies.

“A lot of paper coming in today seems to be though offered for sale (OFS). It is a lot of smart money is exiting to retail… I don’t think that is good for the stock market financial ecosystem in India overall,” Kamath added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BEL expects big-ticket projects to materialise; maintains revenue growth target at 15-17%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Aerospace and defence electronics major Bharat Electronics posted a strong set of Q2 numbers, it was operationally better than estimates. CNBC-TV18’s Agam Vakil spoke to Dinesh Kumar Batra, Director-Finance & CFO of the company to decode their second-quarter performance and business outlook.

The company’s current order book is approximately a healthy Rs 54,000 crore.

“While we are growing at the rate of 15 to 17 percent which guidance we have given for this year, and I am quite hopeful this trend will maintain in next three to four years based on our very strong the order book,” said Batra.

“Rs 16,000 to 17,000 order inflows is in pipeline this year and the trend is very visible on the big-ticket projects materializing. In the next two to three years the same trend will be maintained in the growth in the top line as well as inflows of the orders,” he added.

Read Here: Defence Ministry gives nod to acquisition of arms, military equipment worth Rs 7,965 crore

Bharat Electronics posted a good performance in the second quarter and this helped it compensate for the disruptions in the first quarter.

“Now taking this momentum forward, I maintain that we will be growing at the rate of 15 to 17 percent. We will be able to maintain our EBITDA margin from 20 to 22 percent,” said Batra.

There have been disruptions on account of delays in the field of semiconductors.

“They are delaying some of the projects, but as we had planned to take those things into account, more or less, we will be able to maintain the targets which we have set for ourselves,” he said.

For full management commentary, watch the video.

Also Read: Rakesh Jhunjhunwala-backed Akasa Air orders 72 Boeing 737 Max aircraft

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The Data Management Imperative

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Inflation conditions challenging in some businesses, rewarding in others, says Nadir Godrej

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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From the sidelines of the SBI Banking & Economics Conclave, CNBC-TV18’s Shilpa Ranipeta spoke to Nadir Godrej, Chairman of Godrej Industries. It was his first interview since he took over as chairman and he talked about the potential split in the Godrej group.

He said discussions are going on, nothing has been finally decided yet.

On inflation, Godrej said, “For companies like Godrej Consumer and many of their competitors, like you heard the HUL also speaking today, it is challenging as the raw material prices increases. But as we go along, I think it will be easier to take those price increases and businesses will be able to do better.”

Read Here: Godrej Consumer to take 10-11% price hike for remaining FY22

He added that inflation conditions are challenging in some businesses and rewarding in some.

He added, “It is challenging in some businesses, but it’s very rewarding in other businesses like oil palm, where we had the beneficiaries of these high prices, and oil palm businesses really firing extremely well. The government has announced new policies to promote the oil palm business, we are very enthused by these policies, and shocking that India has to import a huge amount of edible oil. We hope that with this new policy in 10 years or 15 years India will be self-sufficient in edible oil and certainly, we will strive to expand our oil plan business to help this endeavour.”

“In other businesses, for instance, soya meal prices shot up very high, extremely high, then the government allowed the imports. But here our innovation has helped us because we have technology whereby we can use cheaper meals which were hard to use earlier but we have developed technology to use those meals and they are excellent substitutes for soya meal. So innovation is also a way to tackle inflation”

On the oleochemicals business, Godrej said, “Oleochemicals business has benefited extremely from both the inflation as well as the shortage of containers. Imports have slowed down and we have been able to increase our production to fill in the gap.”

Also Read:Godrej Consumer Products Q2 Results: Net profit rises 5% to Rs 479 crore, misses Street estimates

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Govt aims to privatise 5-6 state-owned companies in FY22

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s government is aiming to complete the privatisation of five to six state-owned companies, including Bharat Petroleum Corp Ltd, in the current fiscal year, the secretary of the Department of Investment and Public Asset Management said.

Tuhin Kanta Pandey said the government is aiming to close the privatisation of BEML and Shipping Corp of India and to list state-owned Life Insurance Corp on local bourses in the year to March 2022.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Sensex falls 314 points but holds 60,000 mark as market extends losses to 2nd day

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmarks failed to hold on to intraday gains in a choppy session on Wednesday, extending losses to a second straight day. Losses in financial, oil & gas and IT shares pulled the headline indices lower, though gains in consumer and automobile shares limited the downside.

The 30-scrip Sensex index ended 314 points or 0.5 percent lower at 60,008.3 and the broader Nifty50 benchmark settled at 17,898.7, down 100.6 points or 0.6 percent from its previous close.

UPL, Reliance Industries, Cipla, Britannia, Axis Bank, Indian Oil and Coal India — ending between 1.9 percent and 3.2 percent lower — were the worst hit among the 35 laggards in the Nifty50 pack.

On the other hand, Asian Paints, Maruti Suzuki, SBI Life, Tata Motors, NTPC and ITC — ending with gains of 1.6 percent and 2.4 percent — were among the gainers. Maruti Suzuki and Tata Motors were among the top performers in the 50-member pack for a second straight day.

“The surge in fresh COVID cases is keeping global investors on the edge fanning fears of an economic slowdown. On the domestic front, the auto sector was in focus as reports suggested relief in chip and semiconductor shortages,” said Vinod Nair, Head of Research at Geojit Financial Services.

Asian Paints ended 2.5 percent higher after brokerages maintained a positive stance on the paintmaker following its decision to take a price hike.

Apollo Hospitals closed with a gain of 12.5 percent, gaining momentum after its quarterly numbers beat Street estimates. The stock rose for the seventh session in a row.

Broader markets were mixed. The Nifty Midcap 100 index tumbled 0.7 percent, though its smallcap counterpart rose 0.1 percent.

Technical view

“Feeble global cues are weighing on sentiment and there is nothing much to cheer on the domestic front. Indications are in the favour of a further slide but the pace would be gradual,” said Ajit Mishra, VP-Research at Religare Broking.

“The Nifty has next support around 17,800-17,700 levels. In case of a rebound, 18,000 would act as a hurdle,” he said.

Global market

European stocks saw yet another day of record highs, rising for a sixth straight session, riding on the back of positive quarterly results. The pan-European Stoxx 600 index was up 0.2 percent at the last count.

S&P 500 futures were down 0.1 percent.

Catch highlights of the November 17 session here

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Moneycontrol Pro: Hikal stock in focus, here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a few ideas for profit from Moneycontrol Pro, Anubhav Sahu of Moneycontrol.Com spoke about a stock that he is tracking closely, Hikal.

Hikal is one of the few businesses having exposure to both pharma and crop protection chemicals markets.

In the last quarterly results, the company did reasonably well, led by crop protection business, which had offset the impact of shutdown at the Mahad facility in Maharashtra.

Pharma business was flat due to raw material shortages and international logistics issues. While most of the headwinds are transitory, Hikal is enthused by recent opportunities arising from global supply chain destruction and which has strengthened the China Plus theme.

This has led to a higher conviction for capex programme, currently, the company is executing a nearly 600 crore-plus capex programme with asset turns of 1.5 times. A major part of the benefit is expected to come in FY24.

The company has also culminated a 10-year contract, the emerging vertical of the animal health business. These triggers add to the medium-term revenue guidance of 15 to 20 percent compound annual growth rate (CAGR) and with the margin improvement of 50-100 basis points per year.

Coming to valuations, multiples are reasonable and at discount to its peers in the CDMO business, and hence we believe long-term investors can keep a tab on this.

Watch the accompanying video for more.

Catch all market updates here.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Kartarpur Sahib Corridor reopens ahead of Guru Purab: All you need to know 

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Kartarpur Sahib Corridor between India and Pakistan was reopened on Wednesday, two days before Guru Purab, the birth anniversary of Guru Nanak Dev. The corridor was closed in March 2020 as the COVID-19 pandemic called for restrictions on international movement.

Home Minister Amit Shah announced the government’s decision over Twitter. “In a major decision, that will benefit large numbers of Sikh pilgrims, PM Narendra Modi government has decided to re-open the Kartarpur Sahib Corridor from tomorrow, November 17. This decision reflects the immense reverence of the Modi government towards Shri Guru Nanak Dev Ji and our Sikh community,” Shah had tweeted on Tuesday.

In a major decision, that will benefit large numbers of Sikh pilgrims, PM @Narendramodi govt has decided to re-open the Kartarpur Sahib Corridor from tomorrow, Nov 17.
This decision reflects the immense reverence of Modi govt towards Shri Guru Nanak Dev Ji and our Sikh community.

— Amit Shah (@AmitShah) November 16, 2021

Sikh leaders had been calling for the opening of the corridor since last year as the pandemic receded. Punjab Chief Minister Charanjit Singh Channi, Punjab Congress chief Navjot Singh Sidhu, former Punjab CM Amarinder Singh, BJP national general secretary Tarun Chugh and Shiromani Akali Dal chief Sukhbir Singh Badal lauded the government’s move.

Navjot Sidhu called the move a “welcome step” and an “invaluable gift” in a tweet.

“My profound gratitude to Prime Minister Narendra Modi and Home Minister Amit Shah for the timely opening of the Kartarpur Sahib Corridor. It will provide a chance to thousands of devotees to pay obeisance at the holy shrine on the occasion of Guru Purab of Guru Nanak Dev Ji,” added former Punjab Chief Minister Captain Amarinder Singh.

The Kartarpur Corridor 

The 4.4 km corridor connects Gurdwara Darbar Sahib in Pakistan to the India-Pakistan border. The border allows visa-free travel for Indian Sikhs to the Pakistani side and back, though Pakistani Sikhs cannot use the corridor without an Indian visa if they are not employed in India.

Gurdwara Darbar Sahib Kartarpur is an important place of worship for the Sikh community and is one of the three holiest sites in the religion. The other two are the Golden Temple in Amritsar and the Gurdwara Janam Asthan in Nankana Sahib, in Pakistan. The shrine is visible from the Indian side, as a raised platform has been constructed for pilgrims who want to offer prayers.

Guru Nanak Dev, the founder of Sikhism, settled at the site of the modern gurdwara in 1515 after his udasis (missionary travels) to Haridwar, Mecca-Medina, Lanka, Baghdad, Kashmir and Nepal. Guru Nanak spent the last 18 years of his life at Kartarpur Sahib, spending his time farming, running a community kitchen and assembling the first Sikh communities. The shrine is among the largest gurudwaras in the world and some claim it houses the last original copy of the Guru Granth Sahib.

Visa-free corridor 

The Kartarpur corridor was opened in November 2019, after a year of work. While talks about a visa-free corridor had first initiated in 1999 between then Prime Minister Atal Bihari Vajpayee and Pakistani Prime Minister Nawaz Sharif and later President General Pervez Musharraf, tensions sparked by the Kargil War destroyed any chances of the corridor being constructed.

In 2017, the parliamentary standing committee on external affairs had ruled out cooperation with Pakistan to construct a corridor to Kartarpur Sahib. In 2018, then Punjab Tourism Minister Navjot Singh Sidhu had attended the oath-taking ceremony of friend and former competitor, the newly elected Prime Minister of Pakistan, Imran Khan, where General Qamar Javed Bajwa, Chief of the Pakistan Army, assured Sidhu of Pakistan’s intention to open the corridor between the two nations.

Just a month later, Pakistan unilaterally announced that it would be opening a corridor between the two countries to allow visa-free travel to the shrine. A year later, the Kartarpur corridor was finally opened in a rare show of cooperation between the regional rivals.

“The inauguration of Kartarpur Corridor is a manifestation of the fact that our hearts are always open for the followers of different religions as enjoined by our great religion and envisioned by our Father of the Nation. Today we are not only opening borders but also our hearts for the Sikh community,” PM Khan had said.

“I would like to thank the Prime Minister of Pakistan, Imran Khan, for respecting the sentiments of India. I thank him for his cooperation,” PM Modi had responded.

 COVID-19 rules

All pilgrims will have to carry a negative RT-PCR report, not older than 72 hours prior to arrival, and Covid-19 vaccination certificates. They will also have to take a Rapid Antigen Test (RAT) upon their arrival in Pakistan and anyone with COVID-19 symptoms will be moved to isolation, India Today reported.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Health tech: Epharma penetration to move up 15-17%, see high growth in diagnostics, says Sanford Bernstein

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With new-age companies being the flavour of the Dalal Street and IPO-bound PharmEasy filing draft red herring prospectus (DRHP), it is a good time to check what is happening with the health technology market in India.

The global health technology market as of 2019 was estimated at growing at nearly $96 billion and expected to grow to more than $140 billion, aided by COVID-19 and is expected to probably reach $400 billion in the next couple of years. While the COVID-19 has accelerated technology adoption, the size of the market is relatively small compared to peers in India. As per Bernstein, the health technology penetration is less than 2 percent.

To discuss this in detail, CNBC-TV18 spoke to Prashant Tandon, CEO & co-founder of Tata 1mg; Nithya Balasubramanian, Director, Sanford Bernstein; and Ashutosh Raghuvanshi, MD & CEO of Fortis Healthcare.

Throwing more light on the growth in this space, Balasubramaniam said, “In the epharma space, we do expect that the penetration should move up to 15 to 17 percent and that is where the growth is going to come from.”

Also Read: eHealth goes mainstream; sector set to grow 10-fold by next 4 years

“Similarly, in diagnostics, as well we are expecting very high growth rates. If anything, the growth in the diagnostic segment is likely to be higher than the epharma segments, though the segment size is likely to be larger in epharma.”

“So, if you look at $7 billion as a lion’s share then about $4 billion we are expecting to come from the epharma segment,” said Balasubramanian.

Talking about how Fortis is planning to capitalise on this opportunity, Raghuvanshi said there is no doubt in his mind that digital is going to be one of the major ways people will access healthcare.

Also Read: Fauci says US can reach COVID endemic level

Players who have not focused on digital earlier will have no choice but to move in that direction either by collaborating with the new-age companies or they will have to have their own strategy, said Raghuvanshi.

“As far as Fortis are concerned, we understand that this is a component which we have to focus on and we are creating our digital strategy which would involve certain elements not all, for example, we are not looking at pharmacy, but we are looking at diagnostic and all other areas which we can do like homecare, remote monitoring, wellness programmes, etc.,” said Raghuvanshi.

When asked how these companies make money, Tandon said, “We are looking at a very large value pool, we are looking at a very large market opportunity. The early-stage is where a lot of investment is going to drive a behaviour change, COVID played a big role and going forward, we will see more of these businesses. But healthcare as a line of business or a segment definitely has very high-quality profitable value pools. It’s about the business models figuring themselves out.

“There has been a very competitive initial rush into digital health but like same as the situation in beauty maybe 5-10 years back and once the behaviour changes happened, once the consumers are moving on, I think the businesses then come around to figure out the economic model to continue,” said Tandon.

For the full discussion, watch the video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow